SMSF Association Media Release
SMSF Association has lodged its submission on the Government’s draft legislation for the Better Targeted Super Concessions policy, welcoming recent changes while warning that significant issues remain.
While the Government’s October 2025 announcement improved the methodology for calculating superannuation earnings, the draft bills still fail to strike the right balance between simplicity, equity and workability. It remains the Association’s view that there are more cost-effective and less complex alternatives that should be considered by Government.
SMSF Association’s Peter Burgess said, “We recognise the policy intent to reduce tax concessions for individuals with very large superannuation balances. We also acknowledge the challenge of balancing simplicity with fairness. But right now, Treasury hasn’t got that balance right.”
The submission identifies multiple scenarios, none of which are unusual or unlikely—that could lead to unintended and unfair outcomes under the draft legislation. These include circumstances where individuals may be liable for Division 296 tax despite not being the ultimate beneficiaries of the superannuation benefits that give rise to the tax, as well as cases where inappropriate amounts of earnings are attributed to members who fall within scope.
“These are not theoretical concerns,” Mr Burgess said. “They are practical consequences of the way the legislation is drafted. Without changes, ordinary superannuation events could produce clearly inequitable outcomes.”
The submission calls for targeted amendments to minimise these outcomes and also proposes a simplification of the capital gains tax (CGT) adjustment provisions to reduce unnecessary complexity.
While applauding the Government for enabling capital gains accrued before 1 July 2026 to be excluded from the calculation of Division 296 earnings, we believe a simpler approach would be to calculate the cost base as the greater of the asset’s market value at 30 June 2026 or the asset’s CGT cost base.
This approach would remove the need for an election to be made – reducing the regulatory burden on all participants across the small superannuation fund sector.
Although the Government’s decision impact analysis has not yet been released, it’s clear the October 2025 changes will significantly increase both implementation and ongoing compliance costs for the superannuation industry.
“Ultimately, these costs will be borne by all super fund members, not just those captured by Division 296,” Mr Burgess said. “This raises serious concerns about the long-term sustainability of the policy when weighed against the expected revenue gains.”
We urge the Government to reconsider elements of the draft bills to ensure the policy is fair, targeted and workable,” Mr Burgess concluded.
To view the full submission, click here.