Senate crossbench action urged in wake of disappointing committee outcome on tax proposal

SMSF Association Media Release

The SMSF Association is bitterly disappointed that the Senate Economics Legislation Committee has recommended that the Better Targeted Superannuation Concessions Bill be passed without amendment.

Commenting on the release of the Committee’s report on Friday, SMSF Association CEO Peter Burgess says the recommendation to proceed with the Bill without amendment ignores the considerable and unequivocal weight of evidence presented during the inquiry that this new tax will have many unintended consequences.

“The assertion in the Committee’s report that all superannuation trustees have a legislative obligation to keep sufficient liquidity and therefore the taxation of unrealised capital gains should not be a liquidity concern lacks commercial realism.

“It is completely unreasonable to expect trustees, when formulating a long-term investment strategy such as investing in real property, to forecast future tax changes, particularly a change that is such a radical departure from existing tax policy.

“We also note the recommendation in the Australian Green’s dissenting report that the threshold be lowered to $2 million.

“Lowering the threshold will only exacerbate the impact of taxing unrealised capital gains – it will not only widen the tax net but, for many, it would also mean a greater proportion of the unrealised capital gain is subject to this tax.”

The Bill is scheduled to be debated in the Lower House on Wednesday and will most likely be introduced into the Senate in the coming month.

“This is a fundamentally flawed tax on so many levels and we are calling on the Senate crossbench to halt the progress of this Bill and instead continue to engage with stakeholders and the industry to ensure that the resulting policy and legislation delivers the right outcomes.”