A strong negative reaction to capital gains tax (CGT) and negative gearing changes in the recent federal budget has resulted in a large number of investors identifying superannuation as a tax-effective vehicle, with many likely to reallocate investments to it, a survey of investors has found.
The VanEck Federal Budget Investor Survey, conducted between 19 and 20 May, of 1421 Australians drawn from the investor community of the global exchange-traded fund issuer found 77.7 per cent viewed the CGT and indexation changes negatively.
The survey also found 45.5 per cent of respondents identified superannuation as the most tax-efficient vehicle going forward, 51.5 per cent were holding all positions and waiting to see how legislation evolved, 27.7 per cent planned to realise gains before 1 July 2027 to lock in the current discount and 21.9 per cent were actively considering restructuring.
VanEck Asia-Pacific chief executive Arian Neiron said the investor response was the most definitive it had found following a budget.
“Three in four told us the changes to capital gains tax undermine the incentive to invest,” Neiron said.
“The most experienced cohort of investors in the country, people who have built wealth carefully over 20, 30, even 40 years, have described the budget as a structural attack on their planning,” he added in reference to the survey sample of which more than 67 per cent had invested for more than 20 years and 70 per cent were aged over 55.
“The flight to superannuation is rational, but it is also revealing. Forty-six per cent of respondents told us super is now the most tax-efficient vehicle and deserves a bigger allocation.
“That will likely result in Australians across every age cohort engaging more deliberately with their super and an accelerating shift toward SMSFs.
“The shift in investor appetite is striking. More than 80 per cent of respondents now consider residential investment property less attractive, while almost a third see cash and term deposits as more attractive post-budget, pointing to a defensive shift in how investors are thinking about capital allocation.”
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason