SMSF Association submission on the Tax Expenditures Statement consultation paper

The SMSF Association welcomes the opportunity to make a submission to Treasury’s consultation on the Tax Expenditures Statement (TES). The SMSF Association has been a critic of the TES measurement of the superannuation tax concessions due to the distortionary effect it has on the public debate regarding superannuation policy. We understand that the annual TES is an important exercise in the ongoing evaluation of the Australian tax system. However, due to the shortcomings of the TES measurements, we believe that the TES estimates of the superannuation tax
concessions inappropriately influence the view of superannuation tax concessions in policy debates.

Given the distortionary effect and its consequence for superannuation policy we are pleased that Treasury is reviewing the annual TES publication to improve its presentation and its role in public discourse around tax concessions and their policy efficacy.

We believe that a significant improvement to the TES can be made through the following:

• • Estimating alternative benchmark measurements regularly for large tax expenditures and ones that generate significant public debate.
  • Reducing the focus and effort to estimate smaller tax expenditures to place greater effort on more accurate measurement of large tax expenditures.
  • Improving the visibility and wording of caveats regarding the accuracy and use of the TES.