The Assistant Treasurer Arthur Sinodinos announced on Saturday the outcome of consultations over a backlog of 92 announced but unlegislated tax and superannuation measures.
One of the measures that will proceed to Parliament aims to give the ATO “flexible and cost-effective” options when dealing with SMSFs that breach the law.
These measures were initially introduced to the House of Representatives on November 29 2012, under the The Superannuation Legislation Amendment (Reducing Illegal Early Release and Other Measures) Bill.
The Bill did not pass the House of Representatives under the former Labor government and the measures did not come into effect on July 1 this year, as originally anticipated.
It will now be reintroduced to parliament as a new Bill under the Coalition, with a revised start date of 1 July 2014.
The Bill originally proposed that the ATO have power to impose administration penalties on trustees for certain SIS Act breaches. In addition, it proposed the ATO have power to direct SMSF trustees to fix a breach and direct trustees to undergo education in the event of a breach.
“Given that there was widespread industry support for this measure it’s not a surprise that the government has chosen to proceed with it,” AMP SMSF’s head of technical and policy Peter Burgess told SMSF Adviser.
“It was a recommendation that came out of the Cooper Review which showed that the ATO didn’t have… the necessary powers to take action against trustees who breach the rules. It was an all-or-nothing approach under the current law,” Mr Burgess said.
“Under these new provisions trustees could get fined for not keeping proper records, for not keeping minutes of their meetings, for not lodging returns and a whole list of other things. So we think it underlines the importance of having professional SMSF administration,” he added.
The Coalition has also announced it will not be proceeding with a number of other proposed superannuation measures related to SMSFs, including the proposal that was to allow the verification of SMSF bank account information by the ATO.
The SMSF Professionals’ Association of Australia (SPAA) was keen to see this measure proceed, because it was part of a Cooper Review recommendation and part of the SuperStream arrangements for SMSFs, SPAA’s senior manager for technical and policy Jordan George told SMSF Adviser.
SPAA will continue to advocate for this reform in the new year, Mr George said, and has suggested to Treasury that a similar alternative measure should be put in place.
Mr George also said the cost of administering measures that are not going ahead should be considered when the SMSF levy is next reviewed.
I thought we were going to reduce the size of the public service. There is too much regulation now. Let’s get rid of the bureaucratic nonsense.
I hope the legislation changes can address what I see as the special circumstance where a smsf with one member has the same person as a sole director corporate trustee. Writing letters to oneself, considering their contents & replying to oneself whilst keeping voluminous records seems,to say the least, a dreadful waste of time & beurocratic nonsense