Jim Chalmers said on the ABC Insiders program on Sunday that as the necessary calculations for the new policy wouldn’t begin until mid-2026, he was in no rush to reintroduce the legislation.
“We are not proposing to introduce it or reintroduce it this week … we still have time,” he said.
“It doesn’t begin to be calculated until the second half of next year and so we’ve got time to reintroduce that, but as I said, it’s been in the Parliament before, people know where we’re coming from. Our goal here is to continue to make sure there is concessional tax treatment for superannuation, but make sure that that is a bit more sustainable.”
He added that he had no plans to alter concessional tax measures for retirees on their super balances, stating they [retirees] “still deserve concessional treatment to encourage people to be in superannuation, and that’s not something that we have been proposing to change”.
“I proposed what is a pretty modest change, but a meaningful change which makes the system a bit more sustainable,” he said in regard to the Div 296 tax.
However, the continued delay in the finalisation of the bill is leaving many in the sector frustrated and anxious.
Peter Burgess, CEO of the SMSF Association, said it was important to remember when the government first announced the measure, it acknowledged the need to provide at least a 12-month period from the time the legislation was passed to enable those impacted to assess the impact and then make the necessary changes to their superannuation arrangements.
“We now face the prospect of this tax being back dated by four months or even longer and while the government may argue it announced this tax over two years ago, it’s unreasonable to expect anyone to act on legislation before it becomes law,” Burgess told SMSF Adviser.
“From its flawed design, all the unintended consequences and its retrospective application, this tax is unprecedented on so many levels. We continue to urge the government to scrap this tax and assess changes to the super tax concessions within the broader context of tax reform.
“It’s also disappointing that off the back of the economic roundtable the government now appears to be proceeding with this measure, which clearly has adverse implications for economic growth, under the guise of intergenerational equity.”
Aaron Dunn, CEO of Smarter SMSF said after watching the Treasurer on the ABC program it is still not clear “in respect to when these laws would start”.
“Whilst he indicated that there’s plenty of time before these laws start, there’s clearly not if they have a 1 July 2025 start date for the TSB calculation,” he said.
“You’d like to hope that he’s conceded that a delay in the laws is inevitable and that they still have some work to do to get the numbers in the Senate.”
Nicholas Ali, head of technical for Neo Super, said the Treasurer’s announcement goes to show that the government is being “disingenuous” about the legislation.
“On the one hand Treasurer Chalmers states the backlash against Div 296 by professional bodies doesn’t augur well for more substantive tax reforms because the change is modest and methodical, yet on the other hand he states he is in no hurry to introduce the Div 296 legislation back into Parliament as it is not set to start until mid-next year,” Ali said.
“If it was so well designed and methodical, why has it not been passed as legislation? And surely the Treasurer knows the effective start date for the legislation is not the middle of next year but the beginning of this financial year, 1 July 2025, with the first assessments being next financial year (after 30 June 2026).”
Ali continued that the Treasurer’s comments show “incontrovertibly” the government does not care about delays, or the impact the legislative uncertainty has on those affected by the tax, because there is a very little political downside to the amendments.
“The government (wrongly) thinks there has been sufficient debate on the issue, it is well designed and fair, they have a mandate for the changes and those affected have had plenty of time to prepare for it,” he added.
David Busoli, principal for SMSF Alliance, said the Treasurer is correct in saying that the calculation of the tax does not need to be done until the end of this financial year.
“This is so if it is legislated to begin from 1 July 2025 as he has continually stated it would be,” Busoli said.
“As far as he is concerned, the sector has plenty of time to prepare as he has been firm on the terms and timing from the outset and, frankly, he’s not wrong if there is no change to the way the earnings are calculated as this was always going to be done by the ATO.”
More verbal diarrhea from Chalmers. The bloke is incapable of telling the truth. My mother would give his mouth a good soaping.
Those impacted by this legislation, if it passes in the form previously proposed, have until 30 June 2026 to take expert advice and implement appropriate responses. This may involve forced sales of illiquid assets such as farms or businesses that could take months to finalise. And yet, we don’t even know for sure what form the re-introduced legislation will take, let alone whether it will pass unamended.
Chalmers lives in his ivory tower, with no concept of the practicalities of the real world, and no sympathy for the targets of his socialist campaign. He is unfit for public office and its time Albo, if he has the guts, to whip him into line. I’m prepared to provide the soap, if necessary.
This is disgusting of Chalmers. So everyone has to wait with bated breathe to know if something he devised with Treasury 2.5 years ago this week, slated with the ATO to start almost 2 months ago now, will actually become legislated or not and, in the meantime, our life’s savings hang in the balance. I truly despise this government for how it treats its most generous tax payers.
It is scurrilous and just plain disgusting.