The SMSF Association has confirmed the teal independents intend to introduce into the House of Representatives an amendment aimed at altering one of the most contentious elements of the proposed Division 296 tax.
“We have proposed some amendments to the bill that is currently in parliament to provide for indexation of the [Division 296] cap. We’ve provided it to the teals and we’re glad to see that Kylea Tink is putting that forward,” SMSF Association chief executive Peter Burgess told delegates at the industry body’s National Conference 2024 in Brisbane today.
“When this bill is read a second time in parliament, they will be seeking to pass an amendment to index this cap. The way that we’re proposing to do that is to link it to movements in the CPI (Consumer Price Index) and increase it in increments of $100,000.
“We’ve chosen that method because it’s consistent with the way other caps are indexed in the superannuation system. So that will go up in the second reading stage.”
Burgess noted the association’s efforts in relation to the proposed tax had shifted as it appeared preventing the bill’s passage through parliament was unlikely.
“It’s looking almost like the government will get their way [and] they will get this legislation passed. [The teals] are in the lower house, they don’t have the numbers there, [so] the real debate will happen in the Senate,” he said.
“The government needs a clear majority to pass a bill, they need 39 votes. We expect that the Greens will vote with the government when this bill goes into the Senate. So that means they need two of the Senate crossbenchers to vote for this bill.
“[Of] all the discussions we’ve had with the teals and with the Senate crossbench, the two issues they have with this legislation is there should be indexation [of the threshold] and it should not be taxing unrealised capital gains. So we’re currently in discussions with those Senate crossbenchers.
“If we have to have this tax, let’s try and make it as fair and equitable as we can for impacted members.”