Baby Boomers launch political party to save their super benefits
Self-funded retirees angry about proposed changes to superannuation and tax will have their own political party to vote for at this year’s federal election.
The SMSF Party has been formed by tax consultant and super specialist Grant Abbott, who claims groundswell support from his Baby-Boomer constituency had been “overwhelming”.
Mr Abbott, who has registered the SMSF Party with the Australian Electoral Office, claims more than 1600 have joined the party since he canvassed the idea among colleagues last week.
Don Hamson says the least wealthy self-funded retirees will bear the most pain of Labor’s proposal. Photo: James Brickwood
“I never believed that what started as a thought bubble would develop so much momentum so quickly,” said Mr Abbott, 62, a father of two daughters aged 16 and 21.
He plans to formally launch the party in Perth later this month and then start campaigning in mainland capitals to build awareness and support.
Mr Abbott said he already had a list of candidates seeking preselection for Senate spots on a platform of protecting existing benefits of self-managed super scheme members and self-funded retirees.
The SMSF Party’s target voters will be among the nation’s estimated 1.1 million SMSF members and 2 million self-funded retirees and small business owners. They are typically aged over 55, with professional or small business backgrounds.
“This party is neither left, nor right wing. It will be seeking support from people disenchanted with the major parties and looking for an alternative,” he said.
Labor’s proposal will abolish cash refunds for excess franking credits, sparking an angry response from self-funded retirees who claim it will rob them of super savings accumulated during their working lives.
Some are being encouraged to splurge up to $400,000 of their super savings on luxuries, holidays and home renovations to avoid the impact of the proposed franking policy on their income.
Advisers claim self-funded retirees owning shares in their own name are already spending to hit the $848,000 asset test maximum for home-owner couples – or $564,000 for individuals – that will enable them to receive a part-government pension and full franking credit refunds.
Don Hamson, managing director of Plato Investment Management, which has about $4.6 billion under management mostly in Australian equities, told a parliamentary committee on Friday that many self-funded retirees were “very concerned”.
“We believe this proposal is regressive, discriminates between superannuation funds based on member age and is unlikely to generate the forecast level of net savings,” Mr Hamson told the committee.
“The wealthy to super wealthy will seek advice to preserve franking value, many battlers will likely spend to keep most of their’s, but the ones in the middle will in many cases have to grin and bear it.”
Shadow treasurer Chris Bowen said retirees unhappy with Labor’s plan to scrap cash payments for excess franking credits were free to take their vote elsewhere because the opposition would not be backing down.
Mr Bowen said the system in which people who pay no or little tax but receive a tax refund was neither fair nor sustainable.
By Duncan Hughes
This article was originally posted on the Australian Financial Review.