AMP Capital chief economist Shane Oliver expects tomorrow night’s federal budget will contain a couple of items that will have an impact on SMSF members.
The first of these is a housing affordability measure allowing retirees to contribute some of the proceeds from the sale of the family home, as part of a downsizing exercise, to their super fund.
According to Oliver, the initiative will be implemented so any contributions stemming from these types of transactions will not count towards an individual’s $1.6 million transfer balance cap.
The motivation for the new policy was the government’s concerns the $1.6 million transfer balance cap was discouraging retirees from downsizing as the proceeds were potentially unable to be contained within the superannuation system, AMP Capital said.
The investment manager said this move will potentially help free up underutilised housing across the country.
Canberra’s desire to prioritise infrastructure spending is a second area Oliver has forecast may affect SMSF members.
“The government is talking about ramping up infrastructure spending and using public funding to do so, and this will probably provide opportunities for investors down the track,” he said.
He added the investment opportunities are more likely to materialise in a few years’ time and not immediately due to the model of funding the government currently prefers to employ.
“Recently, the most successful model to build infrastructure in Australia has been for the public sector to develop big greenfield projects and then privatise them once they have been developed and proven as an asset,” he noted.
“The model that is more commonly used now is a win-win for both sides. The community ends up with the asset, which is ultimately privatised down the track, providing investment opportunities.”
It means SMSF members will have the opportunities to make portfolio allocations to managed funds that have invested in established infrastructure projects with the proven ability to generate attractive returns, AMP Capital said.
