Palmer pushes govt for investment mandates in super

Written by Miranda Brownlee Monday, 25 January 2016

The Palmer United Party has proposed the government either introduce legislation which forces a portion of superannuation to be invested solely in Australian assets, or remove the tax benefits for investment in overseas assets.

In a statement issued to SMSF Adviser, the Palmer United Party said that Australia holds one of the highest amounts of superannuation funds of any country, currently at $2 trillion.

“This is forecast to exceed $6 trillion over the next 20 years. There is a significant pool of funds that can be used to boost investment and create jobs,” said a Palmer United spokesperson.

The Palmer United Party stated that their position is that a portion of the superannuation collected in Australia “should be spent in Australia to create jobs”.

“This could be achieved through being mandated in the legislation,” said the political party.

“[Alternatively] people can be incentivised to invest in Australian assets by not offering a tax benefit to any money that is invested from superannuation in overseas assets/interests.”

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0 #12 Dr Terry Dwyer, Dwyer Lawyers 2016-02-15 12:25
Dear Monica

Australia credits Australian tax to Australian shareholders. It does not give away Australian tax to foreign shareholders. There is a problem. Foreign tax credits for tax paid by Australian companies operating overseas should be credited to Australian shareholders as imputation credits.

Overseas companies pay low dividends because most countries foolishly double tax dividends. That's why Apple and Google pile up undistributed offshore profits in Ireland, Luxembourg etc.
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0 #11 Monica 2016-02-12 17:38
Reading PUP’s recommendations has prompted me to ask the following questions:-

If the Australian investors earn good dividends from their International Shares don’t they spend most of the money in Australia and contribute to the economy?
Why should Australians who invest in the International Shares be discriminated in the taxation treatment?
If the Overseas Companies can attract more Australian investors and pay better dividends perhaps the Australian companies need to lift their games and present some healthy competition!
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0 #10 Peter matters 2016-01-30 16:40
P'raps we should be considering investing in a few golf course resorts, or a sunken ship replica theme park?
PUP are consistent with its namesake.

Dr Dwyer raises DORC. What a rip off. Build a dam in 1930 for $1. Amortise the cost in water rates for 70 years, then revalue the asset to current replacement cost and amortise the new book value thru' higher water charges.
Only governments could come up with such a scheme.
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+4 #9 Dr Terry Dwyer, Dwyer Lawyers 2016-01-27 13:53
It's not necessary to force people to buy infrastructure bonds. What has destroyed the admirable system of financing public works cheaply have been-

1 the adoption of upfront user pays when beneficiaries are more the landholders than users;

2 abolition of the rating system for independent semi-government authorities to finance buildings and bond repayments. The SydneyWater Board built everything from about 1888 to the 1980s without a penny from State Treasury.

3 dividend stripping by State and Federal governments

4 bogus inflated cost replacement accounting (called DORC) to maximise monopoly sale prices and make consumers and producers pay over and over again for assets they have already paid for.

If industry is fleeing Australia blame jacked up infrastructure costs.

This used to be a cheap energy country and should be.
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-1 #8 Keith 2016-01-27 13:28
Maybe we could have Governments reissue Bonds and mandate that a certain % be required by small funds under $10m. It worked admirably many years ago to build our water, sewerage and electricity infrastructures etc. Better return to Super Funds and cheaper finance for Governments.
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+2 #7 Steve A 2016-01-27 13:10
Perhaps Mr Palmer wants to specify that the funds be used to prop up nickel mining companies while their owners use the business funds to finance their political aspirations??

He may want to start with the Future Fund which - according to its most recent report - had 6.5% of it's assets in Australian equities (as at 31/12/15).
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+3 #6 Michael 2016-01-25 15:34
"How to ensure Australian assets are mispriced" written by Clive Palmer
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+3 #5 Jason 2016-01-25 13:41
Incentive to invest in Australian companies = franking credits

Reduced tax benefit for investing in overseas assets = Cannot claim foreign tax credits when in pension phase

What is his point? To remove diversification from superannuation portfolios?
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+3 #4 Dr Terry Dwyer, Dwyer Lawyers 2016-01-25 11:34
Oh and what about an investment in an Australian company which invests overseas? Say BHP?

And doesn't he know you (wrongly) don't get a flow through of foreign tax credits anyway?

Is he silly or dissembling?
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+3 #3 wondering 2016-01-25 11:32
Obviously Mr Palmer has never ever read anything published about SMSF investments, as everything published to date tells how almost all SMSF investment is held within Australia.
To think these guys are helping make policy for the betterment of all Australians. Just a joke.
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+1 #2 Dan 2016-01-25 11:07
When will politicians learn that super is not a public asset to fund nation building (compulsorily). It's a failsafe to alleviate public pensions.
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+3 #1 David 2016-01-25 09:53
Is there not substantial funds in Australian assets already? According to the ATO statistics released late 2014 alluded to SMSFs having less than 1% in overseas stocks, warning DIY Trustees the dangers of only having Australian stocks, where retail and industry funds had significant exposure to overseas shares.
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