tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, March 31st, 8:32AM

Investments

rss
Latest Headlines

Tax treatment of super a disgrace

Economist Susan St John says there is an urgent need to resolve the tax issues around super.

Tuesday, February 26th 2002, 11:24PM

The tax treatment of superannuation is a disgrace and particularly disadvantages women because they tend to be on lower incomes, former deputy chair of the Periodic Report Group, economist Susan St John told a meeting of women superannuation specialists.

"Anyone earning under $38,000 – and women’s incomes by and large are going to place them in this category – is effectively paying a 50% tax penalty on their employer’s contributions to super schemes as well as on dividend earnings in the fund," she told a meeting of Women in Super in Auckland.

"Even in the older age groups, where the last shot at saving for one’s retirement can occur, far fewer women than men will have incomes over $38,000. For these women, some freed at last from family demands and looking to make up for lost time, the tax regime for superannuation is disastrous."

St John said it had been recognised since the tax cuts of 1996 that people paying a 21% tax rate were penalised by the tax regime for superannuation. However, successive governments had put it in the too-hard basket since the options put forward by the Taxation of Life Insurance and Superannuation committee (TOLIS) had failed.

She says New Zealand women were fortunate in having a pension like NZ Superannuation, which did not rely on a contributions record and was not referenced to a partner’s earnings. But women were more vulnerable than men to cost pressures on NZ Superannuation.

"More than 70% of women aged 65 or over receive at least three quarters of their income from NZ Superannuation, compared to just over half of men. Around two in five women have no other income. When you consider that the living alone rate amounts to only $11,700 net a year, it does not require much imagination to see the restricted lifestyle this now affords.

"The rest of the developed world is having a really intense debate about their retirement income systems. As a recent article in The Economist pointed out, the reforms that are proceeding rapidly are largely all emphasising the increased role of private pension provision.

"Our history shows us unilateral imposed decisions do not work. We need a reinstatement of the multi-party process and, once that is convened, women’s voice must be heard with urgent resolution of the tax issue," St John says.

This is a press release from Women In Super

Women in Super (Wahine Whakamoamoa) was set up to promote the specific issues relating to women and superannuation. It also aims to increase the number of women in decision-making positions within the industry and to promote education and training. Women in Super holds regular meetings in both Auckland and Wellington.

« Cullen to level tax playing fieldAMP & Good Returns launch superannuation website »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

News and information about KiwiSaver

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA ▼4.55 ▼3.55 3.89 3.99
AIA Special - ▼3.05 3.39 3.69
ANZ 4.44 3.55 3.85 4.49
ANZ Special - 3.05 3.35 3.99
ASB Bank 4.45 ▼3.55 3.89 3.99
ASB Bank Special - ▼3.05 3.39 3.69
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - 3.09 3.35 3.69
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.75 4.10 4.55
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - ▼3.15 ▼3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland ▼3.95 ▼2.89 ▼2.97 ▼3.39
Heartland Bank - Online - - - -
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 ▼2.95 ▼3.09 ▼3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 3.94 4.08 4.39
Kiwibank 4.40 3.84 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - 3.09 3.39 3.65
Liberty 5.69 - - -
Lender Flt 1yr 2yr 3yr
Napier Building Society - - - -
Nelson Building Society 4.95 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.45 3.89 3.94
RESIMAC Special - - - -
SBS Bank 4.54 4.85 5.05 5.49
SBS Bank Special - ▼3.09 ▼3.39 ▼3.69
The Co-operative Bank - Owner Occ 4.40 ▼3.25 ▼3.45 ▼3.69
The Co-operative Bank - Standard 4.40 ▼3.75 ▼3.85 ▼4.19
Lender Flt 1yr 2yr 3yr
TSB Bank 5.34 ▼3.89 ▼4.15 ▼4.49
TSB Special 4.54 ▼3.09 ▼3.35 ▼3.69
Wairarapa Building Society 4.99 3.95 ▼3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 3.09 3.39 3.69
Median 4.60 3.65 3.89 3.99

Last updated: 27 March 2020 3:09pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com