The Institute of Public Accountants (IPA) is pushing the government for an increase in concessional contribution caps and the reintroduction of low-income superannuation contributions (LISCs).
In its pre-Budget submission, the IPA stated that the annual concessional contribution cap for those aged between 50 and 60 years should be raised to $50,000, and to $75,000 per annum for those aged over 60 years.
“By increasing concessional contribution caps for those aged over 50 years it would allow [investors] to make more adequate preparations for retirement in their final years of employment,” said IPA chief executive officer Andrew Conway.
“Whilst in the short term increasing the concessional contribution caps may be a cost to the government, it will help to increase Australians’ superannuation balances and therefore reduce the number of people reliant on government benefits in the future,” he added.
The IPA is also lobbying for the LISCs to be re-introduced to ensure low-income earners are not disadvantaged by having their earnings directed to their superannuation funds.
Under recent taxation changes, those earning less than the tax-free threshold of $18,200 will now pay more tax inside super than outside, according to the IPA.
The IPA also believes a bare trust for acquisitions using a limited recourse borrowing arrangement (LRBA) is “unnecessary”, stating it creates “complexity and significant costs”.
“Since legislation was passed to allow such borrowing arrangements, the ATO has been required to issue a number of publications and pronouncements to clarify the Commissioner’s position on the application of the LRBA legislation,” the IPA said.
“One only needs to speak with a variety of SMSF lawyers who will all highlight how technically complex this legislation is, with many providing a different opinion on the application of the LRBA legislation,” the IPA added.
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