Government told to fix ‘fundamental flaws’ in super system
A prominent actuary has criticised the government over its failure to address key problem areas in the superannuation system, including the restrictions around the transfer of foreign pension money into Australia.
NetActuary managing director, Brian Bendzulla says the movement of retirement money between foreign countries and Australia has risen with increased globalisation, but nothing has been done to help facilitate the flow of foreign pension money into Australia.
“In particular, we have quite a lot of retirement money moving between the UK and here,” Mr Bendzulla said.
“We’re assessing the money coming in, which has been accumulated over a lifetime in the UK, against a contribution limit, which is designed for this year or borrowing two years forward. So someone coming into the country can only bring in $300,000 and if they don’t fully clear out the UK account, there can be dramatically different tax consequences.”
Mr Bendzulla said while there have been many changes with superannuation rules recently, this is an example of a fundamental issue that has not yet been resolved.
“There’s still no fix for fundamentally flawed problem areas like this,” he said.
“It’s in Australia’s interest to get the money to flow into the country. The British tax authorities are trying very hard to stop these big slices of money flowing out of their country. It’s crazy [that] we’re making it difficult for the money to flow in here.
“If we get a medical specialist or something arriving here in their 40s and they’ve got £2 million, we’re crazy not to take it.”
Mr Bendzulla’s comments follow similar calls from The Tax Institute, in a submission to Treasury, for the government to revise the legislation relating to the transfer of benefits from foreign superannuation funds to Australia to mitigate the likely risk of unintended consequences for taxpayers.