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Super tax will become political football following committee report

By Keeli Cambourne
May 13 2024
2 minute read
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Superannuation will no doubt become a political football ahead of the next federal election with the Senate recommending the $3 million super tax legislation proceed with no changes.

Aaron Dunn, CEO of Smarter SMSF, said he believes superannuation will become a centrepiece in the next election following the “blinkered” approach the Economics Legislative Committee took to the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 [Provisions] and Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023 [Provisions] [May 2024].

The committee’s report, handed down on Friday, made no changes to previous drafts of the proposed legislation despite evidence from a raft of disparate associations, industry bodies and individuals.


“The report is the recommendation from the Senate and in essence what the committee has said is they will be looking for it to proceed,” Dunn said.

“The question now is that as the bill was put on hold until this report was tabled and it has to be read and make its passage through both houses to receive assent, will there be sufficient time before 30 June in the parliamentary sitting calendar to have it become law to provide 12 months for people to make the changes they need off the back of it?”

Dunn said there will be ongoing problems with the bill as more unintended consequences come to light due to the very short consultation period that was allowed.

“It seems to have been pushed through with blinkers on and the government ran towards the finish line without thinking about what ongoing issues may look like,” he said.

“We have been talking about these for the past 15 months, but it seems it has fallen on deaf ears. The committee heard all the submissions but was obviously not concerned with the issues raised. It is disappointing and if it does become law it will certainly become a policy-based issue coming into the next election.”

He added that the list of people who will be impacted by the legislation will continue to grow including those on defined benefit schemes, Millennials and women.

“There will be a lot of people aggrieved by this, but it appears from this report the government is intent on seeing this through,” he said.

SMSF Association CEO Peter Burgess said his initial view is that he is disappointed that the committee did not take on any concerns raised by the association and many others.

“The report states that the committee had not done any modelling on the liquidity aspect of things,” he said.

“The Greens dissenting report is also interesting. It essentially said they support the bill but would like the cap to be lowered from $3 million to $2 million and would like to see LRBAs banned.

“We don’t agree with this. The Council of Financial Regulators handed down a report in 2022, reviewing borrowing by superannuation funds, that found that at current levels LRBAs don’t pose a systemic risk to the superannuation system. It stated there have been some changes to policy settings in recent years that have reduced the risk to these arrangements, and there is not sufficient evidence to change that.”

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