The Government has released the second tranche of draft legislation on the changes to superannuation it announced in the May budget.
This tranche deals with the new $1.6 million transfer balance cap that will apply from 1 July 2017 and other measures. SMSF Owners is now examining the draft legislation with a view to making a submission by the very tight deadline of 10 October.
The draft legislation can be found here: consult.treasury.gov.au/retirement-income-policy-division/super-reform-package-tranche-2 If members have comments to offer on the draft legislation, please send them to: firstname.lastname@example.org
For an overview of the new draft legislation, see this Heffron SuperNews bulletin: www.heffron.com.au
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SMSF Owners’ chairman Bruce Foy calls for members to rally against retrospective superannuation tax.
What We Are Telling The Government
Tranche 3 of the Government's superannuation legislation adds complexity and is still retrospective. The draft law replaces the Government's earlier plan to apply a $500,000 one-off cap to non-concessional contributions (after income tax has been paid). The current non-concessional limit will be $100,000 (down from $180,000). Members who put in $180,000 this financial year will only be able to make scaled-back non-concessional contributions in future.
What We Are Telling The Media
The Treasurer’s decision to scrap the $500k non-concessional contribution limit makes sense…it was never necessary in the first place.
What We Are Telling Our Members - see latest newsletter
The Government’s draft legislation on the $1.6 million transfer balance cap on pension accounts is very complex. In our latest Member Newsletter we attempt to summarise the key points.
Speaking Up For One Million Australians, just like you
New Super changes explained ...
This link will take you to a very useful summary in Heffron Super News about what the latest round of superannuation policy changes will mean in practice.
Get the SMSFOA Submission to Financial System Inquiry Final Report
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Leading Opinion on SMSF Issues
3 October – Robert Gottliebsen, The Australian Business Review.... The “ten million dollar club” of top Australian public servants has struck again by preserving most of the gold plating in their pension nest while the rest of Australia suffers benefit cut backs and/or extra taxes.
21 September 2016 – Robert Gottliebsen – The Australian…
Around the world public servants in collaboration with their actuarial mates have been misleading politicians about the real cost of the bonanza pension schemes they have been promised. Nowhere has the game been played better than in Australia.
17 September 2016 – Judith Sloan – The Australian…
The biggest take-home message is that the Coalition can never be trusted on superannuation. Its leaders say one thing and do another, trying to out-Labor the ALP when it comes to imposing higher taxes on savers who are seeking to provide for their retirement.
13 September 2016 – Rebecca Weisser – The Australian ...The government’s modelling shows everyone from the third income decile up — that is, 70 per cent of the population — is worse off under its new retirement system.
13 September 2016 – Professor Judith Sloan – The Australian ...Scott Morrison and Kelly O’Dwyer may well regret ever hearing the word superannuation. Having experienced a rush of blood to their heads and working on the basis of misleading and deceptive advice given to them by activist bureaucrats, they now find themselves in a right royal pickle.
12 September 2016 – Professor Henry Ergas – The Australian ...There is a fundamental defect in the government’s superannuation proposals that has been entirely overlooked. Instead of growing in line with average earnings, the $1.6 million “transfer balance” cap is only indexed to consumer prices.
9 Sept 2016 - John Roskam, Australian Financial Review ... Expressing the objective of superannuation in the way the government proposes is to put tax and financial consideration at the centre of superannuation policy. Instead, the starting point should be the inherent dignity of individuals taking personal responsibility for the care of themselves in retirement.
1 Sept 2016 – Noel Whittaker in Cuffelinks…. If we can believe the rumours, Federal Cabinet is busy working on ways to make its proposed superannuation policies more palatable. It may be a challenging task: at first glance, the Budget 2016 policies seem inconsistent and lacking in logic.
27 Aug 2016 - Robert Gottliebsen in The Australian ... Thanks to what Scott Morrison and his feathered public servant advisers have done to people's super, the family home is being turned into a super fund...another strong housing price rise will follow.
27 Aug 2016 - Grace Collier in The Australian ... People who aim to fund their own retirement are not angry about having to pay more tax. These people are well accustomed to paying for everyone else; they have done it all their lives. They are angry because they have been lied to by Morrision...in my opinion the man is dangerous and not fit to be Treasurer.
23 Aug 2016 - Judith Sloan in The Australian ... Scott Morrison has embarked on the unusual task of trying to persuade fellow members of his own party in
parliament to support his superannuation proposals announced at budget time.
20 Aug 2016 - Grace Collier in The Australian ... I am told that before the election, Cabinet simply waved the policy through simply because nobody understood it and time constraints were pressing.
Treasurer's U-Turn On Super
The online superannuation newsletter Cuffelinks has published the Treasurer's response to a question on his about-face on superannuation taxation.
At an industry conference in February this year, the Treasurer said certainty and confidence were important and he would not "change the deal" on superannuation. Three months later, in the May budget, the Treasurer changed the deal.
He was questioned about his U-turn at another industry conference on 25 August by Graham Hand of Cufflinks whose report is here.
The Treasurer justified his new restrictions on super by saying 99% of people were not affected by the $1.6 million cap and fewer than 100,000 have put in more than $500k in after-tax contributions.
The Treasurer was talking about the total superannuation population, most of whom have relatively low account balances. When it comes to self-managed funds, 15% of members have account balances of over $1 million (the ATO stats don't give a breakdown between $1 million and $2 million). That's 150,000 people. Then there's another 500,000 people with account balances between $200k and $1 million who may aspire to reach $1.6 million or more.
Treasurer, regardless of how many people are affected, a bad policy is not made right because it affects only a relative few, pretty much all of them members of self-managed funds who have made the commitment to support themselves in retirement...under the rules.
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