Stock markets & Business - Your money

Message to australian mps cut your own superannuation perks first




POLITICIANS are being urged to cut back some of their own superannuation tax breaks before hitting the retirement savings of millions of ordinary Australians.

As MPs argue about restricting how much money people can put into super, a new analysis by financial strategists Marinis Financial Group estimates that more than $1.5 billion a year could be saved if they remove an obscene tax break for retired politicians and other public servants.

Hundreds of thousands of public servants with defined benefit superannuation schemes, which were closed to new members by the mid-2000s, were granted a 10 per cent tax offset on their retirement pension income a decade ago even though members paid no tax on their super contributions or fund earnings during their working years.

Theyre among the most generous schemes in Australia, and probably the world, and they dont need an extra free kick, Marinis Financial Group managing director Theo Marinis said.

The pensions they are getting have never, ever been taxed, anywhere, but politicians want to start clobbering people who have been taxed the whole way.

Defined benefit pensions typically pay a percentage of a persons previous salary for the rest of their life, unlike most Australians super which is a finite amount that drops as it gets spent in retirement.

Politicians and public servants in untaxed schemes receiving defined benefit pensions cannot double dip. They automatically receive their pension each fortnight, usually automatically indexed to CPI, with no exposure to market volatility, said Mr Marinis, a former Treasury official.

Australias Future Fund, now worth $123 billion, was created to pay public servant superannuation pensions, but some say it is not large enough to cover the huge future cost.

Finance commentator Robert Gottliebsen has been campaigning against defined benefit scheme rorts and last week renewed his call for a parliamentary inquiry.

The cost of those defined benefit pensions is rising by $6 billion a year and there is a $400bn to $600bn shortfall. That increase in costs is conveniently buried and not included in budget figures but its a real cost, he said.

Public sector superannuation specialist Laurie Ebert said some senior public servants were avoiding tax from beginning to end and said the system should be changed.

I doubt that it would happen, he said. Theyre not going to give it up easily.

Mr Marinis said politicians made little mention of these schemes because it affects them.

He said the tax concessions could be stopped by a simple change to the Tax Act. You are not supposed to give tax concessions to somebody who hasnt already paid tax on their super.

New paid parking rules force closure of businesses as retailers fume




ANOTHER store in Melbourne has been forced to shut because council parking restrictions have driven away customers.

Bev Aisbett said the installation of parking meters were largely to blame for her closing down her Yarraville shop Piece Gallery, in the citys inner west.

The meters have created this exodus from the village; Im the third business in my pocket to go in the past month because there is no foot traffic, Ms Aisbett said.

I was only making $80 a week if I was lucky and there were days I couldnt be bothered opening.

Im now facing a big debt and it is rather terrifying to have this hanging over my head.

Its the second story this week of lack of parking causing problems for small business owners.

Leader revealed on Tuesday that Steven Patruno, owner of Essendons Brickmakers Arms restaurant, made the upsetting decision to close the business because customers stopped coming after Moonee Valley Council brought in one-hour parking restrictions on Brewster St in December last year.

Tensions have been running high in Yarraville since the council introduced paid parking in August.

They have been vandalised several times and two weeks two councillors were attacked at a Maribyrnong Council meeting.

Angry scenes at Footscray Town Hall after Maribyrnong councillors vote to keep paid parking meters in Yarravillle

Now Councillor Sarah Carter will push for a temporary halt in parking fees in order for the council to reassess the impact of the meters on traders and neighbouring residents before a vote in February to decide the machines fate.

Cr Carter has successfully called for a special council meeting, which will be held at 3pm next Friday, December 4.

She said she was confident the motion would pass.

We need to move on this quickly to give the traders some relief, Cr Carter said.

It is not an olive branch but it is us reaching a middle ground.

We need to give the traders some breathing space over Christmas because there is no doubt in my mind that they are hurting.

Cornershop owner Iain Munro, who is down 20 per cent in trade, said the Christmas period was make or break for small business.

There are businesses here that rely on the bumper times of Christmas shopping to survive, he said.

We have already seen a drastic drop in foot traffic around the village.

Cr Carter said it was also a chance for the council to mend the wedge that had been created among councillors since the meters were flagged 16 months ago.

The standoff cant continue and we need to find a way forward, she said.