Claims the government has consulted widely on its plans to tax unrealised capital gains as part of the proposed Division 296 impost have been rejected by an industry body, which has labelled the discussions as merely a “procedural formality”.
Institute of Financial Professionals Australia head of technical services Natasha Panagis said it had made, along with a number of other industry and professional bodies, multiple submissions to the government and participated in roundtables with Treasury to communicate problems with the mechanism of the tax and alternative models that could be used.
“We have also appeared before the Senate Economics Legislation Committee and raised serious concerns about this tax,” Panagis said during a webinar today.
“We have put forward, as well as the other associations, a number of alternative approaches for Treasury and the government to consider, but unfortunately these have largely been ignored.
“From the outset, we’ve maintained that if changes to tax settings for larger super balances are deemed necessary, there are other simpler, fairer options and one of those is taxing actual earnings above $3 million, rather than taxing unrealised gains.”
Her comments were in response to ongoing claims by Treasurer Jim Chalmers, repeated again yesterday during a press conference in Canberra, that no other options have been presented to the government.
Speaking about the taxation of unrealised gains, Chalmers said: “We did multiple rounds of consultation and said to people if there is a better, fairer way of making this calculation, tell us about it.
“The unrealised gains calculation was recommended to us by Treasury. We provided years of opportunities for people to suggest different ways to calculate that liability and nobody has been able to come up with one.”
However, Panagis said Treasury was closed to the idea of an alternative model during the consultation process.
“Going back to the consultation process the Treasurer keeps talking about and saying there were significant rounds of consultation, for us it felt more like a procedural formality rather than a genuine engagement,” she said.
“If you look at the terms of reference, they specifically exclude comments on key elements, such as the $3 million cap, the lack of indexation and the methodology behind calculating the tax.
“Despite these not being part of the terms of reference, we raised all of these issues anyway, even though we had a feeling that they were off the table in any case.
“Although Treasury claims to have consulted with industry quite extensively, having these meetings doesn’t necessarily mean meaningful consultation, especially when the lived experience of industry experts is dismissed.”
