At the time of writing this editorial I had been hoping the federal election result would have been done and dusted. But alas as selfmanagedsuper Trustee News goes to print we are no clearer about whether or not the coalition government will be returned or a minority government of some sort will be formed.
One thing is for sure: a clear message has been sent to our elected officials in Canberra, and that is significant changes to superannuation, like the ones proposed in the 2016 federal budget, have an impact on everyone, and you ignore the reaction and concerns of the public over this issue at your peril.
Regardless of the outcome, hopefully the anger expressed at the ballot box stemming from these changes will resonate with the government and an examination of the proposed changes will occur.
Already four SMSF industry bodies have written a joint letter to Canberra requesting a post-election independent review of the calculations on which the proposed changes were based.
That means a real reappraisal of policy and not just a consultative process as to how the changes will be implemented, as Liberal Senator Arthur Sinodinos suggested before the election, which would amount to nothing less than fiddling around the edges.
And if the Labor Party thinks it’s off the hook in this whole process, it should think again.
Not much was said by the opposition during the election campaign, but there was enough to suggest things wouldn’t be all that different if we had a change of government.
The only things it was considering amending was raising the $500,000 lifetime non-concessional contributions cap to $1 million and addressing the retrospective nature of several of the changes, however, there was no accompanying detail as to how this would be done.
Labor did not mention anything about examining the lower concessional contributions caps of $25,000 and would not want to address the $1.6 million transfer cap as it represents pretty much the same proposal as its 15 per cent tax on superannuation pension earnings above $75,000 a year.
So while the Labor policy might appear to be the lesser of the two evils, superannuants, especially SMSF trustees, can still prepare themselves for a world of hurt in terms of retirement strategies already put in place and in particular increased administration costs in measuring the tax-free thresholds.
But depending on how the cards eventually fall, perhaps there is a ray of light shining from the Senate cross bench. From post-election interviews, Nick Xenophon has indicated he and his party are willing to take another look at the proposed superannuation changes to see if a more palatable and perhaps sensible solution can be arrived at.
Regardless of how it all plays out, I reiterate the one conclusion to be drawn is any significant adverse changes to the retirement savings system in this country will be met with a heightened degree of anger.
Furthermore, telling these people their reaction doesn’t count and wouldn’t be felt at the ballot box doubled down on the poking the bear exercise.
Irrefutably a message has been sent and I definitely hope it got through.
