Superannuation regulations are complex and a thorough knowledge takes time to accumulate, and the details become part of a financial planner's skill that clients can access (and pay for appropriately).
The debate about the cost of super to the Australian budget is often hijacked by incorrect claims, and hundreds of thousands of SMH readers were treated to a ripper on 3 April 2013.
Peter Martin wrote:
"Superannuation is designed backwards. It gives the biggest subsidies to those who need them least. For Australians on truly enormous incomes those subsidies are obscene.
The notion the super-rich wouldn't save for their old age is laughable. The idea that without government support they would fall back on the pension and be a ''drain on the public purse'' is not only wrong but, in the context of what's handed to them, almost sick.
Think about an executive on $1 million a year. Not quite one of Joel Fitzgibbon's ''battlers'', but someone several rungs above.
His or her company pays a legislated $90,000 a year into a super fund of their choice, perhaps a self-managed one. Instead of being taxed at the marginal rate - 45 per cent plus the 1.5 per cent Medicare levy - the payment has until now been taxed at just 15 per cent. So instead of paying $41,850 in tax, the executive pays just $13,500. The gift from the tax system is $28,350."
Oh dear.
There is a cap of $25,000 on concessional contributions for everyone and any employer contributions above that are taxed at an additional 31.5% excess contribution tax. Furthermore, the employer is only obliged to pay 9% on $183,000 ordinary time earnings. Any additional SGC is voluntary. And let's not overlook the fact that an executive on $1 million will pay almost half that in income tax.
By early in the morning, the Herald had corrected its online version amid a barrage of critical comments, but the print version was still sitting in thousands of homes, inflaming the debate.