SMSFA slams proposed cap for super balances
The SMSF Association says it strongly opposes the idea of a cap on superannuation balances and has welcomed an announcement by Labor ruling out the measure.
In a recent update, SMSF Association chief executive John Maroney said that high superannuation balances are a legacy issue and that the 2017 changes put clear limits on contributions to superannuation funds and on amounts that can be held in the tax-free retirement phase.
This follows proposals that were made in a number of pre-budget submissions, including those by ASFA, AIST and Mercer, that the government should introduce a $5 million cap on superannuation balances.
Mercer said that its proposed changes would help to address inequality in Australia’s super system that it argued had “an inherent bias towards high-income earners”.
While Mr Maroney noted that the association has previously suggested that the Retirement Income Review examine the issue of extremely large balances, it deliberately did not recommend where that line should be drawn.
“It’s our position that any proposal to restrict retention of extremely large balances in superannuation needs to be handled carefully to ensure that any rule changes allow adequate time to manage the restructuring that would be involved, especially where large illiquid assets are involved,” he warned.
Mr Maroney said the association welcomed the announcement by the shadow treasurer Jim Chalmers that Labor will not introduce any new superannuation taxes or balance caps if it forms the government after the upcoming federal election.
“Constant changes to the superannuation tax settings erode confidence in the system and discourage members from making long-term savings plans,” he said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.