An SMSF technical specialist has suggested certain aspects of the proposed superannuation earnings tax on member balances over $3 million were not up for discussion during the initial consultation phase for the draft legislation for the measure.
Smarter SMSF technical and education manager Tim Miller noted he attended roundtable discussions with Treasury and the SMSF Association in April last year following the release of the “Better Targeted Superannuation Concessions” consultation paper in March.
However, Miller said Treasury appeared to be reluctant to bring two key concepts of the proposed impost to the bargaining table.
“What was interesting in that consultation was that it didn’t feel so much like a consultation,” he told attendees of a SuperGuardian webinar today.
“The conversation effectively started with: ‘Thanks for your time today, just to be clear Treasury are not too keen on changing the threshold and they’re not too keen on changing the way that earnings are calculated. But we’re interested to hear any other feedback you might have.’
“Well, that’s ultimately all the feedback that we wanted to give, so we could be banging our head against the wall. So a lot of the issues haven’t necessarily been addressed to the level that [we] as an industry or as a sector would like to see.”
Specifically, he identified a flaw in the calculation methodology for earnings as a concern he would like to have seen addressed.
“The release authority that is going to relate far more prominently to members with more than $3 million [in their total superannuation balance] is excess non-concessional contributions,” he said.
“And to not make an allowance, at least in the initial legislation, for the associated earnings that are released with regard to [excess non-concessional contributions], and therefore to have to add that amount back in and count it towards an earning, is a huge issue the industry as a whole needs to be push back on.”
He added a window of opportunity still exists for amendments to be made to the draft legislation after the bill was referred to the Senate Economics Legislation Committee on 7 December.
“The potential hope is that the [$3 million soft cap tax legislation] is currently stalled in the sense that it’s been referred to a Senate committee for review and that ultimately gives a greater consultation opportunity for those that have something to say to talk to other senators,” he stated.
“So there is scope for the industry to have a crack at the senators via hearings to try and implement some of the changes that the industry have been highlighting throughout [the consultation period].”