POWERED BY MOMENTUM MEDIA
Super on PPL sheds doubts on amendments to $3m super tax
The passing of the motion to allow superannuation to be attached to paid parental leave is a “nail in the coffin” for any major changes to the proposed $3 million super tax, according to an industry expert.
The Greens had previously said that it would use its Senate balance of power to hold up proposed changes to the tax treatment of large superannuation accounts until the government puts superannuation on paid parental leave.
But, now that super on paid parental leave has been announced, Aaron Dunn, chief executive of Smarter SMSF, believes changes to the $3 million super tax are in question.
“There might be some tweaks around the edges, but … I feel it’s somewhat of a nail in the coffin,” he said.
Last week, the Senate announced that additional time has been made available to the Economics Legislation Committee to consider the legislation dealing with the $3 million super tax proposal.
This, according to Dunn, has sparked debate about whether changes are being made to adhere to the suggestion that the proposed $3 million threshold be indexed to avoid a growing tax burden over time.
“There are multiple conversations going on about a number of the issues that as an industry we certainly hold close to our hearts, such as indexing the threshold, so it may not necessarily pass through in the first iteration,” he said.
“We understand that in the House of Representatives, they’re looking at potentially introducing some amendments. The details have indicated that they would look to pass an amendment to the bill to propose indexation, but whether, and how, that transpires we need to wait and see.”
Tim Miller, technical and education manager for Smarter SMSF, said there has also been debate in the Senate regarding the proposed objective of super, which has been branded as unnecessary by many inside and outside the industry.
“There is quite a diversity of opinion when it comes to legislating the objective insofar that you’ve got consumer groups, you’ve got industry bodies, you’ve got some of the more technical aspects and the enforceability of things,” he said.
“There were also trade unions appearing before the inquiry as well, and when you look at it in a far more holistic sense, rather than potentially some of the technical elements that we might do when we discuss Div 296, for example, I think the views were quite different based upon the different parties.
“Most of the submissions tended to focus on what is the point of having this legislation in place or what is the point of having this objective of super because it is not mandatory.”
Dunn said the objective of super is more of a “motherhood statement”. He noted that the reasoning behind the government’s push for the objective is still unclear, with the only plausible explanation being that it intends to usher in other areas of superannuation reform.
“It’s not enforceable in any way, so what is the point?” he said.
“So from that point of view, certainly, we will need to wait and see because I don’t feel like there’s a clear read of the room on how the government might go other than the fact that they have a clearly stated objective that they would like to get locked in, and then move forward as they look to shape superannuation policy into the future.”
Recommended for you
A member body representing some prominent wealth managers is concerned super funds’ dominance is sidelining small companies in capital markets.
Earlier this month, several Australian superannuation funds fell victim to credential stuffing attacks, which saw a small number of members lose more than $500,000.
Small- to medium-sized funds have become collateral damage in an "imperfect" model for super industry levies, a financial institution has said.
Big business has joined the chorus of opposition against the proposed Division 296 tax.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
90.28 3 y p.a(%)
2
GAM LSA Private Shares AU I
37.08 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.44 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.12 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
28.28 3 y p.a(%)
