The bill to implement the proposed Division 296 tax on member superannuation balances over $3 million may need to be reintroduced into parliament in 2025 if the Prime Minister calls a federal election in August, according to the SMSF Association.
During a legislative and regulatory update today, association head of advocacy and policy Tracey Scotchbrook noted both the House of Representatives and Senate have a maximum of 27 combined sitting days before parliament adjourns for the year in November.
To that end, Scotchbrook added there is a possibility the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill might not be finalised by that time if an election is called before it passes through parliament.
“At the end of the sitting of both houses on Thursday [of this week], the parliament will close for its winter break and it won’t resume again until 12 August,” she said.
“If we look at the spread of those sittings and consider the possibility of an election being called – with some pundits predicting it could be as early as August – we will see a dissolution of the parliament occur once the election is called. Seemingly, the inflation rate could be the big driving factor if some of the commentary is anything to go by.
“Any bills that are before the parliament that are in progress will lapse [and] come to an end and they will need to be reintroduced into the new parliament after an election has been completed and parliament resumes.
“If an election were to be called in August, then that’s going to have quite a profound impact on the Better Targeted Super Concessions Bill and, potentially, the Delivering Better Financial Outcomes Bill too, so that could help us in terms of frustrating the process around the superannuation bill in particular.”
She said she and SMSF Association chief executive Peter Burgess met with members of the Senate, crossbench and opposition in Canberra last week to discuss some of the more contentious aspects of the proposed tax.
“At first blush it looks like it’s just a wealth tax, but because of the technical aspects of the bill, it has been challenging to explain to those who don’t work in the SMSF space what the bill means and why we have a problem with it,” she stated.
“They’ve been made aware of the issues around the taxation of unrealised gains and what that means compared to realised gains. That has been a consistent message with those we have met with.
“It’s been really pleasing to see the high level of engagement with senators, the crossbench and the opposition. They’ve been willing to meet and engage with us and to really talk through these issues and it’s been very positive.”
