Treasury acknowledges limits to estimates
The Treasury has acknowledged its estimates in the Tax Expenditures statements have their limitations and stressed there is no “policy message” or hidden calls to action in the figures.
The Treasury’s executive director, revenue group, Rob Heferen told delegates at the SMSF Association’s national conference last week the estimates are plainly meant to be a measure of the amount of money “potentially” foregone.
“There are some things it is and some things it is not. It is not a policy message,” Mr Heferen said.
“Some have suggested simply because there is a large measured expenditure, government should necessarily do something about it. That is not the case. There is no policy message whatsoever in the tax expenditures statement,” he added.
“So when people report ‘This is a measured tax expenditure and therefore this is the amount that could be saved if the government did something about it’, that is untrue.”
There have been renewed calls recently for a more “sophisticated model” in determining the true cost of superannuation concessions.
As superannuation increasingly looks to be a target of the government’s national tax reform, AMP SMSF’s head of policy, technical and educational services Peter Burgess previously told SMSF Adviser it’s necessary to have a more holistic approach to calculating superannuation tax concessions.
“If we’re going to move this debate forward, we’re going to need a lot more holistic and sophisticated approach to valuing these tax concessions, with a model that does factor in the offset in reductions in the age pension costs.”
