Treasury denies new super tax is not equitable
The Federal Treasury has claimed the approach to reporting actual taxable earnings for the $3 million super tax is “sector-neutral”.
Despite myriad assertations from various associations within the SMSF sector, Treasury said the proposed super tax will not disadvantage any group and allows for both APRA-regulated and SMSFs to report on the same basis.
“The government’s approach to calculating the tax liability under the Better Targeted Superannuation Concessions measure balances simplicity of design with equity by leveraging existing fund reporting requirements,” it said in an exclusive interview with SMSF Adviser.
“It treats individuals equally in applying a tax on large balances, whether they have an SMSF or are invested in an APRA-regulated fund.
“The alternative approach of reporting actual taxable earnings would require significant changes in reporting by APRA-regulated funds that would come at a cost to all their members, not just those with high balances.
“Finally, in addition to the recent consultation process on the implementation details of the measure, the government intends to undertake further detailed consultation on draft legislation in the second half of 2023.”
SMSF Association CEO Peter Burgess said in response there is nothing simple or equitable about the government’s proposed approach.
“The concept of an adjusted total super balance, which will be necessary to ensure earnings are not inflated, doesn’t sound like a simple or efficient approach to me,” he said.
“And taxing unrealised gains, which appears to be unfortunate consequence of the proposed approach, is hardly equitable and is hardly sector neutral when you consider the exposure that many SMSFs have to illiquid investments such as real property.
“We understand the difficulties that many APRA funds would face in having to report actual taxable earnings attributable to each member but why should the SMSF sector, which will be mostly impacted by this new tax, be penalised for this?
“All we are asking is that those funds that are able to report actual taxable member earnings be given the opportunity to do so with a deemed earning rate applied as the default approach for others. This, in our view, is the simplest and most equitable approach.
“In our experience, substantive changes are unlikely once draft legislation has been released.
“Hence our push to re-open the consultation now ahead of any draft legislation being released.”
- What absolute garbage! The whole scheme is designed to alleviate the issues that the "big" funds said they could determine the total super balance figure. That is on the public record.0
- Treasury's response is so blatantly absurd it constitutes nothing less than deliberate ignorance.0
- I agree - willful ignorance and selective hearing!
We are a minority that is being discriminated against in the harshest of ways financially, with superannuation being taxed at rates higher than even the highest personal tax rates in our case with our own SMSF, based on our last 2 tax returns as a factual example.
We have spent 30 years saving into super, with no savings outside of super except for our home. Unless we retire, we cannot move funds out of super into a more attractive vehicle, and in the meantime, the government is intent to raid our super and we are powerless to do anything to stop them. This is the same party that made super available to everyone and encouraged us to lock away savings for use in retirement.
I feel for those who are nowhere near retirement that are affected if this comes through. I will be retiring and moving assets out of super. I have no option unless I want to pay tax over 3 times the 15% that we presently pay from our smsf earnings and the sting is that they are not even realised earnings, but based on pie in the sky valuations (as accurate as they can be on one day of the year)!
We need a "voice", but will anyone listen! Treasury is obviously not listening and certainly do not care, as we are a minority that no one cares about, except to take what they can from us.
This tax is not a 30% tax as people are led to believe - just a doubling of the current 15% tax. No, in many cases it is significantly more. And taxing unrealised gains for our minority is the beginning of more to come, I am sure. Superannuation is just too tempting and we can't even touch it ourselves. Yes, this is a raid on lifetime savings by a desperate government who wants to get their hands on it before we can.
Treasury, this new tax is not equitable!.
0- If you want a "voice", just claim that you have First Nations ancestry - no questions asked! No problem!1
- Can I identify as one? A friend only recently found out he/she/they/them is 1/32 aboriginal. Too bad he put all of his children through tertiary education himself before finding out. Sorry to sound so cynical but rules for some.... I really am feeling discriminated against and unfairly treated being in this minority.1
- We are with you bro and to all the white male heterosexuals who have no interest in drag storytime in the manner of our esteemed leader of Dictoria Taliban Dan who feel discriminated against. We are also with the ladies who feel discriminated in the same manner.0
- plain stupid1
- I cannot fathom that the government cannot see the flaws in their plan here, or that they were not warned of the implications well before the initial announcements were made. This seems more likely to be willful ignorance under pressure from industry and other APRA funds, which will no doubt defy all our efforts to alter their trajectory.2