SMSF Association urges Govt to use 2017 Budget to give super ‘period of stability’

The SMSF Association has used its 2017 Budget submission to urge the Federal Government to commit to stability to the superannuation system and resist further changes to the system.

Association Head of Policy Jordan George says: “Superannuation funds need a period of stability, not only to ensure that they are able to implement any changes required to meet the new superannuation laws, but to foster confidence in the system.

“The Government’s moves to enshrine the objectives of superannuation in law are a welcome step in this direction; however, the objectives must be fit-for-purpose to deliver the stability the system so badly needs. It is also essential to remove superannuation policy from the regular budgetary cycle.”

The Association’s submission, which also raises issues of housing affordability, infrastructure funding, red tape and how to better integrate superannuation with social security policy, says superannuation underwent significant upheaval following the 2016 Budget and the recent passage of the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016.

“Currently, many fund members and their advisors are working through the actions and strategies required to ensure they comply with the new laws from 1 July 2017.

“In addition to the need to revisit strategies and undertake actions to meet the new rules, many SMSFs will be faced with increased reporting compliance obligations under the new transfer balance cap rules after 1 July.

“Consequently, the Association believes it is essential that the Government commits to a period of stability for superannuation free of significant changes, especially concerning tax settings.

“This would allow superannuation funds and their members a period to ensure that they have the correct strategies in place to comply with the new rules and maximise their opportunities to build retirement savings.”

George says having this period of stability would also work to restore “much-needed confidence” in the system.

“After a period of significant change, it is important that stability follows so that fund members can have confidence that their retirement savings will not be at the whim of Budget policy or more tinkering with the superannuation laws.

“Stability for superannuation should extend beyond tax settings and include broader issues such as ensuring that it is not used to fund first home deposits.

“Such proposals should be easily evaluated and assessed against strong and fit-for-purpose objectives for superannuation. On the other hand, sensible changes that improve the system and make it more efficient by reducing red-tape should meet the system’s objectives and be proceeded with.”