Letters of the Week

Super dismay, Super and heath care, and Telstra trouble.

Super dismay

I am utterly dismayed by the rumours of potential changes to superannuation on the basis of ‘fairness and equitability.’

I have worked my heart out and led a prudent life for 35 years to provide sufficiently well for my retirement knowing that I cannot nor should not rely on the state for my old age. I have also contributed significantly into superannuation on the basis of the rules as I understood them to be. I could have frittered these funds away on holidays or non-essential spending and had a ball doing it. I am on the cusp of 60 and now face this (possible) change in rules.

I cannot understand why a government would want to convey that providing for your own retirement is to be penalised. I can see how the Labor Government will appeal to the broad mass of people who do not have the same desire to provide for themselves.

The Government quotes $30 billion of ‘lost’ taxes – that is a chimera. If I had frittered away my retirement funds the Government would not have the benefit of taxing those dollars and would also be worse off as it would now have to fork out extra tax dollars to fund / top up my retirement funds.
There must be so many people in my position with the boomer bulge. Why are we not able to lever that critical mass and present a voice to the Government. Is there any way to do this?

I am not convinced that Labor will not hold power due to the woeful choice we have by way of the Opposition, and so this threat of change to superannuation is dire. We have to find a way.

Cheryl Veitch

Super and health care

As an anaesthetist in private practice it seems to me that the vast majority of self-funded pensioners maintain their health insurance. If the proposal to tax self-funded retirees is realised, one of the first 'luxuries' that they will forego is their health insurance. The Government needs to be made aware that this proposal means a significantly higher number of public hospital beds will be required in the coming years and that it will have to fund many more university placements for doctors and nurses due to the increased demand.

Statistics show that costs per procedure in public hospitals are significantly more expensive than the same procedures in private hospital settings.

Surely someone should make the government aware of this before it ruins both the super system and the healthcare system in one simple step.

Name withheld

Telstra trouble?

I cannot argue with your commentary on Telstra and the National Broadband Network (NBN), however on nearly every major financial metric Telstra is not the strong company everyone seems to think it is. Its current ratio (current assets less current liabilities) is $1 billion and has been for several years. Profits do not cover dividends, nor does free cash flow in the last six months when one-off items are excluded.

Dividends are being paid in part from borrowings that have been climbing steadily. The gearing ratio is 122% on a generous net debt-to-equity basis, but escalates to over 140% when cash is excluded (as it should be with a negative current ratio). The franking account was in deficit at 30 June 2012 to the tune of $54 million and the results of the last six months will have accentuated the problem. The board is strangely silent on the dividend beyond July 2013, and instead warns of large capital expenditure commitments arising from the renewal of spectrum licences, let alone the new spectrum being auctioned for 4G. Investors chasing yield might be in for a disappointment if expectations are not met, and it would not be the first time Telstra has been sacrificed on the altar of political expediency from either side of politics. I don’t believe current levels are sustainable in the long term.

Peter de Cuyper

For more letters of the week, click here.

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