No significant changes affecting superannuation and SMSFs were expected to be contained in tomorrow’s federal budget, according to the SMSF Association.
“I don’t see a great many changes coming out of the budget for superannuation, although I think the government of the day always seems to think it’s obliged to make some statement about a range of things and superannuation’s included in that,” SMSF Association technical and professional standards director Graeme Colley told selfmanagedsuper.
“The association has put in its budget submission, as we do year by year, and we haven’t really changed [our position] on many things as we’ve previously put forward, such as taxing of death benefits, limited recourse borrowing arrangements and licensing, et cetera.”
Commenting on the possible outcomes of the tax white paper without the purpose of superannuation having been defined yet, which was a key recommendation of the Financial System Inquiry’s (FSI) final report, Colley questioned the merit behind legislating super’s role.
“It’s to incorporate what the policy of superannuation is, but does [defining it] really compel the government?” he said.
“The temperature might be right today, but I feel that it will be so broad that in five or 10 years’ time the government can interpret that as it wishes – the government’s the law setter so when the temperature changes, they can change the rules.
“I don’t think the government will pre-empt the outcome of the tax white paper because it’s such a broad [undertaking] and we’ve seen what David Murray and the FSI had to say about the different elements.”
Instead, the approach to any future super changes needed to be aired as an open debate, he said.
“The Labor Party came out recently to say we should set levels [for super tax] and it’s good because what it’s doing is opening up that debate early. But maybe the debate is far broader than that,” he said.
“I think it has more to do with adequacy and how much you need to have for retirement, then building a technical structure around that because you’ve not only got the tax concessions to consider, but how the funds will be drawn down – how will that work and how are the funds and contributions going to be treated?
“You could ask why do you want to go for adequacy, but isn’t that what it’s all about – the integration of the superannuation system with the Centrelink social security system?
“If we’re able to attain that, then maybe we’ll get a better result out of it.”
The government is scheduled to release a tax options green paper in the second half of the year and the final tax policy is due to be presented before the next election in 2016.
The SMSF Association will be holding its annual State Technical Conference series in late July through to August, with a special focus on advice about retirement savings.
Colley said the association had devised a program that would stimulate its members across a range of disciplines that were critically important to their clients.
