New Super Bills introduced
The Government has introduced its superannuation legislation to the Parliament and wants it passed quickly.
On 9 November, the Treasurer introduced a package of superannuation legislation to the House of Representatives.
We expect the legislation will be debated by the House and the Senate in the next 2-week sitting of Parliament from 21 November. The Government says it wants the legislation passed by the end of the sitting. It will take effect from 1 July 2017.
We are currently working through the legislation. At first sight, the major change to the legislation from the exposure drafts are that the 60 days allowed to correct excess contributions to an account is extended to six months.
We intend to write to all Members and Senators expressing the views of SMSF Owners and other like-minded associations.
There are three Bills:
The Superannuation (Objective) Bill 2016 – this states the objective of superannuation is to substitute and supplement the age pension. The Treasurer’s second reading speech on this Bill is here (download pdf)
Treasury Laws Amendment (Fair and Sustainable Measures) Bill 2016 – this introduces a $1.6 million balance cap and other measures. See the Treasurers’ second reading speech is here. (download pdf)
Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016 – this sets the penalties to apply to contributions above the $1.6 million cap. Treasurer’s second reading speech is here. (download pdf)
These three Bills are summarised in an Explanatory Memorandum here: http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fems%2Fr5762_ems_3e13dbab-f4b3-41a3-95c8-204b79c1ed92%22
SMSF Owners’ Chairman lambasts Government over super changes.
We formed the SMSF Owners' Alliance four years ago because we knew that sooner or later governments unable to properly manage their budgets would make a grab for our retirement savings and they would zero in on self-managed funds because we have been so successful.
This year, it came to pass. ....
The Government has released the second tranche of draft legislation on the changes to superannuation it announced in the May budget.
This tranche deals with the new $1.6 million transfer balance cap that will apply from 1 July 2017 and other measures. SMSF Owners is now examining the draft legislation with a view to making a submission by the very tight deadline of 10 October.
The draft legislation can be found here: consult.treasury.gov.au/retirement-income-policy-division/super-reform-package-tranche-2
For an overview of the new draft legislation, see this Heffron SuperNews bulletin: www.heffron.com.au
We’ll keep you updated.
The Treasurer today (15 September) scrapped the $500k non-concessional contribution limit announced in the May budget. This makes sense. The Treasurer also announced there will be a new, lower, annual non-concessional limit of $100,000 (previously $180,000) which can be rolled forward for 3 years. See the Treasurer’s statement here: sjm.ministers.treasury.gov.au/media-release/096-2016/ And our response here: media release
Treasurer's U-Turn On Super
The online superannuation newsletter Cuffelinks has published the Treasurer's response to a question on his about-face on superannuation taxation.
At an industry conference in February this year, the Treasurer said certainty and confidence were important and he would not "change the deal" on superannuation. Three months later, in the May budget, the Treasurer changed the deal.
He was questioned about his U-turn at another industry conference on 25 August by Graham Hand of Cufflinks whose report is here.
The Treasurer justified his new restrictions on super by saying 99% of people were not affected by the $1.6 million cap and fewer than 100,000 have put in more than $500k in after-tax contributions.
The Treasurer was talking about the total superannuation population, most of whom have relatively low account balances. When it comes to self-managed funds, 15% of members have account balances of over $1 million (the ATO stats don't give a breakdown between $1 million and $2 million). That's 150,000 people. Then there's another 500,000 people with account balances between $200k and $1 million who may aspire to reach $1.6 million or more.
Treasurer, regardless of how many people are affected, a bad policy is not made right because it affects only a relative few, pretty much all of them members of self-managed funds who have made the commitment to support themselves in retirement...under the rules. The lasting damage the budget super changes have done is to erode certainty and confidence in superannuation for everyone - the very values you extolled in your February speech.