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Industry content with tax review approach

The Institute of Public Accountants (IPA) believes the tax discussion paper, released by the government today, had a greater chance of success as its approach was uncomplicated and included a wide range of taxation issues.

“The problem with the Henry review was that it was fairly technical, so this sort of [simplifies] it a little bit so that it can go back to the public at large, engage the public with the fact that we’ve got a problem and build the support for the reform,” IPA technical policy general manager Tony Greco told selfmanagedsuper.

“I think just tweaking that has given it a greater chance of success.

“The language allows most people to have a reasonable understanding of what the issues and distortions are, and it provides all stakeholders to put forward [suggestions] that address some of the issues that the report is trying to focus on.”

In addition, Greco said he was pleased the government chose a consultative approach.

“[The system] needs some holistic changes and the government has learnt its lesson – it needs to go back and explain the need for changes first before [implementing them],” he said.

“Even the intergenerational report explained the looming challenges so people could view that report and understand some of the dilemmas that any government would have regardless of who’s in, so this report allows us to go backwards before we go forward.

“It’s also good to have industry engagement, otherwise you don’t have the buy-in.”

The SMSF Association also welcomed the broad-ranging tax discussion paper as it had the potential to kick off a wide debate in the community, including those around the tax settings for super and retirement benefits.

“We particularly welcome the stated focus on fairness and complexity of the tax system, which are logical starting points for a discussion of such magnitude and importance,” SMSF Association chief executive Andrea Slattery said.

“It is good to see that the tax discussion paper has acknowledged the broader retirement income goals of super and its interaction with the age pension.

“These are important aspects of the retirement income system and must be taken into account when discussing any reform.”

The SMSF Association will be actively engaged in the discussion as the debate moves forward to the green paper stage later this year and the release of the white paper next year.

Formal submissions are due by 1 June.

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