Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Sydney Morning Herald gets it wrong on super

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.

 

  •   3 April 2013
  •      
  •   

 

Leave a Comment:

banner

Most viewed in recent weeks

Indexation implications – key changes to 2026/27 super thresholds

Stay on top of the latest changes to superannuation rates and thresholds for 2026, including increases to transfer balance cap, concessional contributions cap, and non-concessional contributions cap.

The refinery problem: A different kind of energy crisis in 2026

The Strait of Hormuz closure due to US-Iran conflict severely disrupted global energy supply chains. While various emergency measures mitigated the crude impact, the refined product market faces unprecedented stress.

Has Australia wasted the last 30 years?

The 20 years after Peter Costello left Treasury have been deemed wasted...by Peter Costello. The missed opportunities for Australia began long before.  

3 ways to defuse intergenerational anger

With the upcoming budget increasingly likely to include bold proposals to alter the tax code I’ve outlined three incremental steps with fewer unintended consequences.

Navigating the next stage of life in retirement

Retirement planning is more than just saving enough money. Long-term care needs, housing choices, and social networks are just as critical for a happy and enjoyable life.

The missing 30%: how LIC returns are understated, and why it matters

The perceived underperformance of LICs compared to ETFs is due to existing comparison data excluding crucial information, highlighting the need for proper assessment and transparent reporting.

Latest Updates

Superannuation

Do super funds need a massive wake up call?

UK retirement expert, Guy Opperman, believes super funds are failing at supporting members in deaccumulation. Here is what Australia should do about it. 

Retirement

Sequencing risk resurfaces for retirees

A retirement strategy must consider how both the timing of cash flows and the sequence of returns impact the final dollar outcome from which a retirement is funded.

SMSF strategies

Meg on SMSFs: Payday super – why should SMSF members even care?

Not filing your SMSF annual return on time can mean missed contributions under the new Payday super regulation. 

Strategy

There will be no permanent underclass

Worries about AI causing mass job loss are misguided. Far from creating a permanent underclass, Like other technological innovations AI will improve living standards around the world.

Taxation

Reforming the taxation of wealth and wealth transfers

As the budget approaches debate continues about the need and method for addressing wealth inequality. Could reinstating wealth transfer taxes be the answer?

Investment strategies

The biggest oil shock in history. Why isn't the price higher?

While increases in oil prices are dominating media coverage of the turmoil in the Middle-East it is worth exploring why prices haven't gone up more. 

Financial planning

Structured giving's new moment

A big year for philanthropy has seen multiple tax changes impact the approach donors are taking. For those with the intention to give generously there is a third structure available in the structured giving landscape.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.