One of the most frequently heard complaints about superannuation is how often the rules are changed. I can identify with that view but it is hardly valid when the change is for the better and when I look back over the changes that have occurred in superannuation legislation since the mid 70s I believe that we now have a much better system than applied then. It is also much less capable of being abused by employers and employees who I believe could not grasp the fundamental purpose of super, namely to provide for retirement.

A few years ago one of the really good changes was the introduction of the rebate (now called an offset) for contributions to super on behalf of a low income earning spouse.

The contribution to super is not taxed in the hands of the super fund, the taxpaying spouse is entitled to a rebate of 18% up to $540 and on retirement the resulting income stream or withdrawal is tax free in the hands of the spouse because the original contribution is an “undeducted” contribution, that is no tax deduction has been claimed.

If I say it often enough the message will prevail…super should be everyone’s preferred investment vehicle to get a tax break. Someone will surely point out that all superannuation funds in Australia with a reasonable exposure to the share market suffered a loss last year.

“There you are, I always said that super was not safe.”

Superannuation is not an investment. It is a very tax friendly “place” where you can invest your money. The types of investment – property, bonds, shares, cash, precious metals, precious stones – all need to be made through an investing vehicle and super just happens to be one of those vehicles.

Most of the Fund managers who offer super funds to their customers offer exactly the same investment options inside super as outside super.

The superannuation field just happens to be much more regulated because it provides by far the most tax breaks to you and to me.