The SMSF Owners’ Alliance (SMSFOA) has urged Parliament to pause and consider the repercussions before passing the sweeping changes to superannuation that will affect many Australians.
“We expect legislation to enact the [new super measures] will be introduced as early as next week in the session commencing on 7 November,” SMSFOA executive director Duncan Fairweather said today.
“The government is aiming to have the legislation passed by the end of this year, [but] it should be referred to parliamentary committees for review and accept submissions from Australians whose retirement savings will be affected, the associations that represent them and superannuation experts.”
Fairweather said the government’s consultation on the draft legislation released so far had been hasty, with just a few working days allowed for comments on three tranches of complex new law.
“The legislation introduces a new definition for superannuation, new structural concepts, new rules on contributions and new tax applications,” he noted.
“They are the most significant changes to super in a decade – since the reforms [then-treasurer] Peter Costello made in 2006.
“They will have an impact not just on the 4 per cent the government says will be directly affected now, but on many more who are in mid-career and aiming for a financially independent retirement.”
The Senate, in particular, needed to consider whether it was prepared to pass tax law with retrospective effect when, on principle, it had been reluctant to do so in the past, he added.
“The changes take many pages of legislation to explain. There is a risk of unintended consequences if the legislation is rushed,” he said.
“As well as giving the Parliament the opportunity to give proper consideration to the new super laws, the government should consider extending the start date of 1 July 2017.
“Superannuation fund trustees, including the trustees for half a million SMSFs, face important decisions – their financial advisers, accountants, lawyers and auditors will have to quickly get across the detail of the legislation and that’s not to mention the task of modifying systems that [are used] by the major funds and the ATO.”
The SMSFOA appreciated there would be a revenue cost if the start date was pushed back, however, it was important to make sure the new law would be workable and Australians were given reasonable time to understand what the law meant to them and to make well-informed decisions about the disposition of their retirement savings, he said.
“In any case, changes to super should not be about raising venue,” he said.
“They should be to make super more efficient and effective, enabling many more Australians to achieve a financially secure retirement.
“It is not good economics to curtail long-term retirement savings to fund recurring government spending.”
