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Saturday, 9 May 2015

New taxes are a death duty by stealth

Last year around this time the government began a period of humiliating defeat in the Senate that led to its almost losing its leader in February - remember those heady days? - and subsequently a period of deep introspection. The government has apparently learned its lesson through continued refusal of Labor and the Greens to pass their legislation into law. So now we see a compliant government outsourcing its policy development to the Opposition because that's the only way, it thinks, it can get anything through the Senate. It's probably right.

To get to a point where we can clearly look at the current crop of tax policies we have to go back a little way, to the end of the last Labor government and the beginning of the Coalition government. One of the first pieces of law to come into effect back in those days was the change in the regime for calculating aged care fees. That change occurred on 1 July 2014. What it meant was that from that date the fees for aged care facilities would no longer be calculated based on income alone, but would now also be based on assets, because while the elderly don't have much in the way of income they sure do have assets and the government - first Labor, and then equally the Coalition - wanted some of that moolah.

That piece of policy worked so well that now the Coalition government has decided to take another leaf out of Labor's scoresheet and apply the same asset test to pensions. So it doesn't matter now if you worked hard and saved all your life, the government wants you to sell your family home - just as in the case of the aged care assets test - and use that money to live off. You are to downsize. Don't complain, now. And there's no point in your children complaining either because it's bipartisan, which means if there's a change of government the new regime will stay in force.

Slowing growth in China, the end of the mining investment boom, and a sluggish world economy have added urgency to the demographic reality that is the ageing generation of Baby Boomers to conspire against even those workers themselves. And then endless stories about a housing bubble in the Sydney and Melbourne property markets have softened up the electorate, preparing them for an attack on assets. It seems that the Baby Boomers are on the nose with most people. Why, people in the community ask, are we thinking of funding the retirement of these rich bastards when they have all this wealth locked up in the family home?

Not content with making the elderly sell their family home to fund their retirement, it's only a matter of time before the government will attack superannuation, taking away from the first generation that ever had access to this new saving-for-retirement instrument part of their hard-earned wealth. Because it's Labor - the party that introduced super in the first place back in the 80s - that is spruiking for this to happen. It's extraordinary. Once again the savings of the elderly are under attack. Once again the retiree who has worked and paid taxes all his life is being asked to make just one more sacrifice for the country.

We see a government imposing a death duty by stealth. The men in Canberra are telling Australians that they - and not you - are best placed to know how to spend the wealth you have accrued over a lifetime of saving and paying mortgages, a lifetime of worry and struggle. And your children? They can kiss their inheritance goodbye because the party apparatchiks want to control it.

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