TOM ELLISON
In 2001 I was approached by a prospective client, looking for options for investing his $380,000 retirement package.
This wasn’t your typical working class pokies player. The gentleman concerned was a well-known public figure, who had carved out a successful career working for a charitable organisation. He had a wife, four adult children and an increasing number of grandchildren.
The idea was to create a tax effective income stream to help him enjoy a comfortable retirement, with the flexibility to help his children and grandchildren financially if needed.
Two months later, he withdrew $20,000 for `household expenses.’ Just weeks after that, another $25,000 was needed for a holiday. Then $10,000, another $15,000 and a largish $70,000 to `help his children.’
When he came to my office just one year after his retirement (his wife was waiting in the car), I warned him that with the current rate of withdrawals, he would be broke in another seven months. I was too conservative – the last $7,000 was spent one year and four months after his retirement.
One year and four years after retiring, my client had lost more than $400,000 on `leisure activities’ (he’d won a car playing Keno, which was sold and `reinvested’). I knew where the money had gone. His wife didn’t.
$400,000 is a handy gain for the local gaming venue and Federal Group, but that will be little consolation to his partner, children and grandchildren.
Not to mention the taxpayer, who will now support him for the rest of his life, despite gaining no benefit from his investment in Tasmania’s gaming industry.
I wish I could say this was an isolated case, but it’s not. I’ve seen retirees lose far more in gaming venues than in any stockmarket downturn.
Greg James is absolutely correct. This is a Tasmanian disease, but one our elected representatives not only ignore, but actively facilitate. If it were a medical condition, they would find a cure, or at least tax the shit out of the cause.
As it stands, we have to sit by and watch as people’s lives are destroyed, just to line the pockets of a few.
