The SMSF Association has pushed back against claims the government consulted widely on the composition of the proposed Division 296 tax after a meeting last week with new Financial Services Minister Daniel Mulino, who confirmed no changes would be made to the impost.
The industry body told its members it met with Mulino late last week to discuss the Division 296 tax, Delivering Better Financial Outcomes (DBFO) reforms, Compensation Scheme of Last Resort (CSLR) and the Australian Financial Complaints Authority’s wholesale investor determinations.
“It was a very cordial meeting and laid the foundation for a strong ongoing working relationship,” the association stated.
“We discussed the proposed Division 296 legislation in detail. We once again raised our concerns about the design of this tax, the unintended consequences, and we put forward alternative options.
“Unfortunately, there was no indication that the government was open to making changes, with the Minister reconfirming the Treasurer’s intention to proceed with this tax in its current form.”
It added that given this position, it was clear the consultation that took place in 2023 was ignored in favour of a predetermined policy position.
“In light of the Treasurer’s comments last week about extensive consultation being undertaken on Division 296, and that no alternative approaches have been proposed, we would like to reiterate to members that the association has, over the past two years, put forward several alternative options that would achieve the government’s policy outcomes without the complexity, cost, unintended consequences and disruption to the flow of investment funds so critical to productivity growth and innovation,” it said.
“The government’s Division 296 legislation started out as a proposal to tax unrealised gains and not index the cap, and there has been no deviation from these positions – despite compelling evidence of its potential deleterious impact on the wider economy.
“The absence of adjustments or receptivity to alternative views indicates that the consultation was merely a process to endorse a pre-decided policy position instead of a genuine effort to consider other views.”
The Financial Advice Association Australia (FAAA) also said chief executive Sarah Abood and board chair David Sharpe met with Mulino last week and noted his willingness to listen and work with the profession.
“The Minister acknowledged the issues facing our profession and agrees the DBFO reforms are a priority. He is focused on releasing the remaining tranche of the reforms as quickly as possible,” FAAA said.
“He also recognises the importance and urgency of resolving the problems with the CSLR. The final report from the Treasury review, as well as a finalised estimate for the financial year 2026 levy, are expected early in the new financial year.
“We also spoke about the future health and growth of the profession, including the importance of reducing costs and red tape, and attracting and retaining more financial advisers to ensure affordable and accessible advice for all Australians.”
