The SMSF Association has confirmed its opposition to the proposed implementation of a superannuation balance cap within the retirement savings framework.
“The association’s position is that we don’t support a [superannuation balance] cap. We certainly agree that those excessively large balances are outside the policy intent,” SMSF Association head of policy and advocacy Tracey Scotchbrook told delegates at the industry body’s National Conference 2023 in Melbourne today.
“There is only a very small number [of individuals with these large balances]. These are legacy issues.”
Scotchbrook expressed her disappointment with Assistant Treasurer and Financial Services Minister Stephen Jones for singling out SMSFs when raising the government’s concerns over superannuants with very high balances as the issue is an industry-wide one.
“At the end of the day some of these substantially large balances are very few in number, but it is not an SMSF-specific issue. We have large balances also that reside within the APRA (Australian Prudential Regulation Authority-regulated) funds,” she noted.
According to Scotchbrook, there will also be considerable complexity associated with the proposed process.
“Is putting a cap on super [balances] as simple as it sounds? Clearly the answer is no,” she said.
As such she advised considered future action is required.
“We’d encourage the government to take the time with this. If it’s serious about this policy, [the government needs] to really take its time and have a think about it because we need to make sure that if it is going to go down this path that we get the settings right and that we don’t throw the baby out with the bathwater,” she said.
She pointed out the superannuation system is complicated enough and introducing an additional threshold for people to have to manage will not have a positive impact on it.
