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04 Oct 2019 Regarding Noel Whittaker’s comments on the downsizer contribution

MEMBER 265 writes: 

I find Noel Whittaker’s comments (TaxVine 37, 27 September) about the merits of the downsizer contribution when compared to eligibility for government pension surprising. 

Super’s purpose is purportedly to relieve the burden on the public purse and give more people the dignity of self-funding their own retirement. 

Here we have a total dismissal of this and an enforcement of the long held, but wrong, view that anyone is “entitled” to a government pension. 

If a couple can extract $700k from home equity as a result of moving to more suitable premises, my advice to them is – you are heading toward freedom and embrace it. The downsizer is tax-free throughout its life – no tax even on the death of the last of the couple but granted, absent any other personal capital, they can probably achieve a tax-free environment outside of super (but will have the burden of annual tax returns, and when the first of the couple passes, then there will be tax to pay on the annual investment income). Super is usually the trump card when you look beyond the immediate. 

Financial planners are undergoing an educational uplift which includes a compulsory ethics subject that is in support of the new Code of Ethics that applies to them from 1 January 2020. Here we have existing professions that have had codes of ethics or codes of conduct since inception and yet, commentary such as seen in TaxVine. As I say, surprising.

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