Why Super ? Why indeed.
The recent history of superannuation in Australia shows that successive governments over successive budgets have encouraged Australians to step up their super.
There has always been the tax incentive to put money into super, the leave it there then withdraw it.
A common myth is that 'it's taxed on the way in, it's taxed in there then taxed on the way out ! What's the point?'
The point is that yes, it's taxed on the way in at 15% but you receive a tax concession of up to 45%.
It's taxed during in there at 15% but that's better than in your hands and being taxed at up to 45%.
Now here's the tax fact that supercharged the super incentive. In retirement, there is no tax on the way out.
This was a Howard government piece of legislation and stems from their 1996 election campaign.
Although not introduced until much later, it was part of big changes made to the tax landscape.
In fact in that election campaign, John Howard visited Sanctuary Point and spoke at the Sanctuary Point Community Centre.
Amongst other things he promised to remove age pensioners from the tax system and remove taxation from super in retirement.
Although it took awhile, both promises were filled.