SMSFA questions Greens’ demands over super tax proposal
SMSF Association CEO Peter Burgess says there are plenty of other reasons why the Greens and others should not support the government’s proposed new tax on large super balances.
Mr Burgess told SMSF Adviser the Greens’ strategy of holding the government to ransom over the super tax in exchange for paying super on Paid Parental Leave misses the bigger challenges of how the proposed legislation would affect Australians.
The Greens said on Friday (1 September) that support for the super tax reform will be contingent on passing legislation to put super on PPL.
In a statement, the Greens said the government had forecast it is expected to increase tax receipts through the proposed $3 million super tax legislation by $2.3 billion by 2027–28, and that paying superannuation on PPL would cost the government less than 10 per cent of that – an estimated $200 million per annum – according to the Association of Superannuation Funds of Australia (AFSA).
Greens leader in the Senate and spokesperson on women, Larissa Waters, said the Greens will use its balance of power in the Senate to ensure the government makes superannuation on PPL a priority reform, as part of its changes to super.
“This is such a timid proposed change to the tax concessions the obscenely wealthy receive. If Labor is not going to improve it, the least they can do is put it to good use,” she said.
“We know Australian women are retiring with significantly less superannuation savings than men, with the gender retirement gap currently sitting at 23 per cent. Women deserve fairer Paid Parental Leave, and it’s only fair if it includes super.”
Mr Burgess said one of the challenges with this type of proposal is where to draw the line with other types of government support payments.
“There are plenty of other reasons why the Greens and others should not be supporting the government’s proposed new tax on large super balances,” he said.
“For example, the proposed taxation of unrealised gains is grossly unfair and goes against traditional tax concepts.
“Similarly, including insurance payments in the calculation of a member’s super balance will give rise to unfair and unintended consequences, and not indexing the $3 million threshold means over time more and more super members will end up paying this new tax.”
Aaron Dunn, CEO and founder of Smarter SMSF, said although the Greens may not be interested in the issue per se, they are using the proposed super tax legislation as an opportunity to get a portion of the projected revenue to fund some of its own policies.
“This is where the fun and games begin because what typically happens with policy is there are announcements, consultations, and different views from segments of the industry put forward and the government will either move forward with what they thought was right or consider the views and take some onboard,” Mr Dunn said.
“Putting on my SMSF hat, my view is that any change that may actually happen is going to be negotiated, or lobbied for at the Senate level as that is arguably where the influence can come in.
“The Greens know they have a level of power in the Senate, so they are looking to use it to their advantage to get other aspects of policy amended.
“On face value it seems the Greens are a bit flippant on these issues but hopefully there will be further opportunities for concerns raised to get airtime and for those views to ultimately be heard.”
