Your savings:political protection

Kevin Rudd’s once excellent political instincts have deserted him over recent months.

And that could cost you quite a lot of money.

You can protect yourself against these potential losses.

But you must act now, to succeed.

Perhaps, though, we are getting a little ahead of ourselves here.

So let’s take a step or two back, so that we can see the danger.

As you would know, the government is presently involved in a big row with the nation’s miners, over its plans to introduce a super profits tax in the mining industry.

And, whether you like it or not, that will affect you, directly.

The Prime Minister is planning to use the revenue he raises in that way, for several purposes.

These include gradually reducing Australia’s company tax rate from its present 30 per cent to just 28 per cent.

The so-called super  profits tax would also be used to help  gradually raise the present compulsory superannuation levy from 9 to 12 per cent of wages.

The government estimates that  this will put an extra $108,000 into the ultimate superannuation payout of a worker now aged 30.

However it also warns that the higher levy won’t proceed, if the super profits tax is killed.

That could happen.

The government does not have the numbers it would need in the Senate, to guarantee that the proposed measures will become law.

The opposition has declared that it will oppose the new tax.

So that higher levy is very much at risk.

So, too, is that extra $100,000 or so, that you might have expected, on retirement, if you are 30 now.

The miners’  campaign against the government’s plan was entirely predictable.

Kevin Rudd should have seen it coming.

He should have recognised, also, that the government’s position was weak, because it will  be facing a Federal election, very soon.

That is the raw political reality.

Mr Rudd should have seen ithe present trouble coming.  In better times, he probably would have.

But fighting the effects of a global economic crisis can be exhausting.

What, though, can you do to protect yourself, financially, in a situation like this?

Typing out a short note to your pay office, or accountant, perhaps might be a worthwhile step.

Tell the appropriate person that you want to increase your superannuation contributions from the present 9 per cent of your income, to 12 per cent.

Think seriously, too, about putting those payments into a self managed superannuation fund.

That way, you can  also protect yourself against  the expensive effects of stock market crashes later
in your working life.

A self managed fund has other advantages, too.  It can free you from expensive fees, that can also reduce your ultimate payout, when you hit your sixties.

Politicians come and go.  So do their policies and tricks.  Self reliance, though, certainly has its  value, in matters like these.