SMSFs dodge Commission of Audit bullet
SMSFs appear to be out of the Commission of Audit’s firing line, as per the government’s pre-election promise, although some have warned a pause on major changes to super may be short-lived.
Speaking to SMSF Adviser, Taxpayers Australia’s superannuation products and services manager Reece Agland said it appears that superannuation was largely not on the Commission of Audit’s agenda, particularly when contrasted with the lead-up to the previous Budget.
“The government promised at the last election not to touch super without warning, so they stuck to that promise,” said Mr Agland.
However, he warned that superannuation is likely to be on the government’s fiscal agenda in the longer term.
“When you look at the fact that the top 10 per cent get 30 per cent of the benefits, there is an issue there; if they’re cutting the pension or dealing with the pension, they’ve also got to deal with the top end of the market,” Mr Agland said.
“I suspect [the government won’t] do anything now, but going to the next election they’ll need to have some sort of policies addressing the taxing issues in relation to super.
“I think the [issue] of tax-free earnings in retirement, particularly for high wealth individuals, that might have to be looked at again. And a more efficient means of taxing, that is probably what they’ll be looking at.”
One of the superannuation-related changes recommended by the Commission of Audit was increasing the super preservation age to five years below the age pension age, to complement changes being recommended for the age pension.
However, the SMSF Professionals’ Association of Australia’s director for technical and professional standards told SMSF Adviser this move is unsurprising.
“The alignment of the preservation age with five years younger than the pension age, we could probably have seen that on the horizon irrespective of which government would be in power,” Mr Colley said.
“Measured debate” is essential regarding the issue of superannuation and the age pension, he added.
“Our nation, and particularly future retirees, will be best served by mature and reasoned consideration of the issues rather than seeking out silver bullets such as simply aligning preservation age with an increased age pension age,” Mr Colley said.