The absence of any comments regarding the status of the proposed Division 296 tax in the federal budget is confirmation the government plans to proceed with the measure and take it to the upcoming election, the SMSF Association has stated.
Association chief executive Peter Burgess said any indication of change would have been flagged in the budget due to the proposed tax’s link to revenue.
“As a revenue item, tonight’s budget was the last opportunity for the government to either take this tax off the table or make changes to address the significant issues raised by industry and the parliament,” Burgess said.
“Material changes to this tax, which impact the government’s previously budgeted revenue estimate for this proposed measure, would have needed to be reflected in the budget.
“Considering there was no mention of changes, the government is now committed to taking this tax to the next election, warts and all.”
SMSF Association head of policy and advocacy Tracey Scotchbrook told selfmanagedsuper the absence of the Division 296 tax in the budget was a way for the government to avoid a controversial issue going into the election.
“This means the bill that is stalled in the Senate is not going anywhere. It will lapse when the election is called, but clearly they are standing by that highly flawed policy,” Scotchbrook said.
“It is disappointing given that we’ve engaged with government and Treasury to get them back to the drawing board and have a proper consultation to get the right policy settings and they haven’t listened.”
She said the association was watching the Senate, which is sitting this week, but does not expect the Division 296 bill to be addressed before an election is called.
The budget was also silent on the social security legislative instrument to prevent look-back assessments when people restructure and exit a legacy pension, she noted.
Simplification measures also proposed by the association and not included in the budget include reducing the number of total super balance thresholds and simplifying the transfer balance cap regime.
