The SMSF Owners’ Alliance (SMSFOA) has labelled reports that the Turnbull government may contemplate an exemption to super contributions from lottery wins as “farcical” and, if true, “deeply unfair”.
SMSFOA chairman Bruce Foy said considering giving an exemption to lottery winners was the most absurd twist yet to a policy that was riddled with unfairness and unintended consequences.
“If an exemption to the contribution limit is given to lottery winners, why not to punters who have a big win at the races or the casino?” Foy said.
“If you are fortunate to win the lottery and pay no tax on your winnings, then good luck to you. But it would be totally unfair for you to then be able to make a larger contribution to your super than everyone else.
“If the new, backdated limit of $500,000 on non-concessional contributions, which we oppose, is to remain in place, then it should apply to everyone.”
He said there might be a case, although the SMSFOA was yet to be convinced, for people whose super had decreased because of a divorce settlement to be able to make up the difference, but there was no justification for lucky lottery winners to get a free kick.
“We are more concerned for the many who have made retirement plans based on an injection of funds into super from downsizing their homes or from selling other assets, but now find their retirement savings plans stymied by a retrospective limit on contributions,” he noted.
“If the cabinet spends more than two minutes on this loopy idea, we should all be very worried.
“The cabinet should instead spend time reviewing the premise of the tax changes which were announced in the budget and then taken to the election as policy without consulting the coalition party room.
“As we and others predicted, the policy proved deeply unpopular and damaged the coalition.”
He added even now the controversial super changes had still not yet been debated in the coalition party room.
“The government has an expenditure problem not a revenue problem, but if tax changes are to be made, they should be made to the general tax system – income and GST – and not just so as to retrospectively affect those who have attempted to be self-sufficient in retirement,” he said.
“Instead of pursuing a dud policy, the cabinet should renew the consultation process it halted abruptly by abandoning the tax white paper before even as much as an options paper had been produced, and re-engage with the superannuation constituency.”
