Treasury has recognised and reaffirmed tax incentives will continue to play a large part in motivating individuals to save enough money to fund their own retirement.
Speaking at the Self-managed Independent Superannuation Funds Association Annual SMSF Forum 2019, Treasury retirement income policy division principal adviser Nicole Mitchell said: “[One of the key bases] of the taxation system of retirement is to encourage people to save for their retirement and reduce reliance on the age pension.”
Mitchell’s comment was in response to questions about the reasoning behind the super reforms handed down in the 2016 federal budget, which dramatically reduced the amount of tax-free savings individuals can hold within an SMSF.
“Those 2016/17 changes, while I understand they have had a significant impact, were about trimming the incentive rather than removing the incentive,” she added.
With regard to the Australian Securities and Investments Commission (ASIC) fact sheet released to the public recently, she confirmed Treasury was supportive of the corporate regulator’s stance.
“From a Treasury perspective we certainly understand the underlying intent of what [ASIC] is doing and are supportive of the underlying intent,” she said.
“That is, one, to make the point that SMSFs, while they are very important and useful mechanisms for many people, are not for everybody. So reminding people of this [is important].
“And also reminding trustees of their obligations around having an investment strategy [is important].”
However, she acknowledged the sector’s concerns over ASIC’s fact sheet and in particular some of the information contained in it. To this end, she suggested a specific course of action the SMSF community should take.
“If you’ve got concerns about the details or the specifics of how the regulators have gone about passing on those messages, you are best placed to communicate directly with the regulators,” she said.
The ASIC SMSF fact sheet was released earlier this month and has been criticised by several sector stakeholders, including the SMSF Association.
