The federal government will not consider banning limited recourse borrowing arrangements (LRBA) as part of its negotiations with the Greens to secure their support for the proposed Division 296 tax bill.
Treasurer Jim Chalmers made the declaration during a press conference in Canberra yesterday in response to a question noting that prior to the election the Greens stated they would support passage of the Division 296 legislation in the Senate if LRBAs were banned.
“That’s not something that we’ve been considering. The point that we’ve made on a number of occasions since the election [is] the parliament will return at some point. It won’t be in the next few weeks. No doubt there’ll be discussions in the Senate about the superannuation changes, but those discussions haven’t begun,” Chalmers said.
When it was pointed out banning LRBAs was Labor Party policy until the 2019 election, he distanced himself from that previous stance, as well as return to it in Division 296 negotiations.
“First of all, that’s three elections ago now and so it’s not our intention to resurrect all of the policies from three elections ago,” he stated.
“We took our agenda through the election, including the changes to superannuation tax concessions to make very generous concessions slightly less generous, but still generous.
“We would like to see that legislated in the Senate. We’ve not had any discussions about any of the changes that the other parties would like to see in the Senate.”
These comments follow repeated statements by the Treasurer in press conferences last week that the government would push ahead with “a very modest change to the taxation of very large superannuation balances tax” that would affect about 0.5 per cent of superannuants while making the budget more sustainable.
At that time, he also pushed back on claims the new impost would not apply to defined benefit schemes.
“You read from time to time on social media that somehow politicians on the old scheme before 2004 have somehow been exempted, that’s not the case,” he said on 14 May.
“I think people deliberately have told a different story from time to time, but politicians on defined benefit will be impacted if they’ve got very substantial balances by the changes we’re proposing.”
To find out about the latest developments in relation to the Division 296 tax in the aftermath of the federal election, make sure to attend SMSF Professionals Day 2025. Please visit www.accurium.com.au/smsf-professionals-day/ to register.
