Did you hear what I did on the night of 18 May when the coalition unexpectedly won the federal election? The sound was a collective sigh of relief, and some cheering as well, emanating from all of the SMSF members and self-funded retirees across the country.
In fact, superannuants everywhere had cause for celebration on the night as they all managed to dodge an Exocet missile rather than your standard bullet, considering all of the changes the Labor Party had in store for the sector had it been swept into power, whether they knew it or not.
But I suppose the main thing people are happy about is the biased franking credit policy proposal is no more. This leaves us in a funny situation because we now have a bit of a Marty McFly moment in going back to revisit and prepare for the policies the Liberals had announced but that had not been passed into law before the election was called.
Some of these initiatives include the increase in the maximum number of members an SMSF can have from four to six, something everyone thought was completely dead in the water, and the new non-arm’s-length expense rules.
On another positive note, the appointment of Jane Hume as the Assistant Minister for Superannuation, Financial Services and Financial Technology I think is a good thing. As they say in the classics, only time will tell, but her skill set and experience does seem to be a good fit for the sector.
While I’ve only heard her speak once since the election, she did seem to have a good knowledge and command of the issues she will be facing in the immediate future.
An example of this would be her acknowledgement there is no need to review the tax structure of superannuation even though the government is committed to another review of the retirement savings system.
Moreover, in making this known she recognised the government had introduced some significant measures as recently as 2016, being the super reforms that were disruptive enough for SMSF trustees, and that any further pain was unnecessary.
On a slightly more disappointing note, Hume did admit everything was back on the table from prior to the election and that includes the proposal for SMSFs considered simple to be subject to a three-year audit cycle. She confirmed the outcomes of the consultation the government held with the sector are currently under consideration.
As I have reported, the industry on the whole is not supportive of such a move, with certain auditors pointing out so-called simple SMSFs, namely the ones with large cash holdings and a few other assets, can be the ones that cause the greatest headaches as cash represents the temptation to use fund assets for early release and other illegal activities.
It might actually surprise Canberra that during the recent SMSF Trustee Empowerment Day, held by selfmanagedsuper’s sister publication, smstrusteenews, the sentiment among consumers was they didn’t want to see the introduction of the measure either. This is despite the fact the initiative is designed to help alleviate the administrative burden and lower the costs of running one’s own super fund.
Given this mood, it would serve the minister well to accept it and immediately knock this universally unpopular proposal on the head.