Let us tell you about three banking and retirement scams the Australian government is getting ready to inflict on you. Two are already in operation and a third is in the works.
Australian savers, investors and retirees are about to be slapped about by our country’s two biggest institutions. The banks and the Australian government are both going to take a swipe at your savings. And there’s even more swiping to come. Below, you’ll find out exactly how this is going to happen, and what you can do about it.
You expect the government to steal some of your income in income taxes. And you know it takes 10% of your money when you spend it too. When you invest and when your business makes money, the government takes another cut. Heck, even if you leave your money in a savings account, the government will tax the interest.
But you don’t expect the government to simply take all the money out of your bank account just because you haven’t used it recently. Believe it or not, that’s exactly what’s about to happen.
From May 31st, any bank account which has been inactive for three years can be raided by the government. The legislation making this possible was rushed through the parliament and includes all accounts with more than $1 in them. You can keep the change. The raid could take up to $109 million of Australians’ money.
Here’s what one subscriber sent to our feedback inbox:
‘Got a letter from St George today about a bank acc…that has not been operated on for just under 3 years. Will transfer to the gov coffers if I do not operate on it before the three years are up. Gov obviously desperate for money. Imagine the hassles, time wasted, and public teat time and cost in getting your money back.’
It’s time to go digging through your old paperwork for any old accounts you might have forgotten about. If you find any, it’s time to withdraw or deposit a dollar to keep the account active. Also, let your family and friends know.
If you’re sceptical you could be hit, keep in mind that $109 million is going to come from somewhere. Chances are, the big losers of this will be Australians living overseas who kept an account open here. They’ll return to find it empty.
The government isn’t just raiding ordinary bank accounts. It’s also raiding retirement accounts.
Forcing someone to deposit 9% of their income into an account the government later gets to raid is audacious even for politicians. But that didn’t stop them from scheduling their first raid for the 31st of May. Yes, that’s the same day as the bank account raid.
For now, only inactive bank accounts with less than $2000 can be raided. That’s still an impressive $760 million at stake.
The political genius of the retirement system is that it creates a huge pool of money for politicians to play with. They can force you to invest certain amounts in certain ways and siphon off funds as needed. That sounds harsh, but once again, it’s all real.
The latest plan is to increase Super contributions from 12 to 15 percent, and then allocate that money to something other than your retirement pot!
The Australian newspaper reported that, ‘Mr Keating…said the additional money raised by increasing [the] compulsory guarantee from 12 to 15 per cent should be paid into a government “longevity insurance fund” which would be used to help fund the retirements of people over 80.’
If you don’t live past 80, tough. Someone else gets your money.
Not only that, an accounting body recently issued ‘… a warning that the system could collapse if retirees are given too much freedom in how much money they spend’. Yes, the government took your money for safe keeping and now you don’t even get to choose how you spend it.
Here’s what the accountants are worried about: People are so indebted, even by the time they retire, that retirees will take lump sum payouts and use the cash to pay off their debts. That will leave them with no income from their investments, putting a bigger burden on the pension.
If you want to join Kris Sayce’s protest about all this, you can sign his petition here. But you can also fight back in other ways…
It’s frustrating that there isn’t more outrage over these thefts. You should do what you can to protect yourself and your friends and family. But in the end, there’s a different front you can fight on, with much greater consequences. That’s what we want to tell you about later in the week.
You see, the government can only make incremental changes to banking and retirement laws without causing public outrage. But you can pick a fight on the things that really matter. And few financial decisions matter more than your mortgage…
Nickolai Hubble.
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