Following the release of the Senate economic committee’s report on Friday, SMSFA CEO Peter Burgess said the recommendation to proceed with the bill without amendment ignores the considerable, unequivocal weight inquiry evidence of many unintended consequences.
“The assertion in the committee’s report that all superannuation trustees have a legislative obligation to keep sufficient liquidity and therefore the taxation of unrealised capital gains should not be a liquidity concern lacks commercial realism,” he said.
“It is completely unreasonable to expect trustees, when formulating a long-term investment strategy such as investing in real property, to forecast future tax changes, particularly a change that is such a radical departure from existing tax policy.”
Burgess said the association also noted the recommendation in the Greens’ dissenting report that the threshold be lowered to $2 million.
“Lowering the threshold will only exacerbate the impact of taxing unrealised capital gains – it will not only widen the tax net but, for many, it would also mean a greater proportion of the unrealised capital gain is subject to this tax,” he said.
The bill is scheduled to be debated in the Lower House tomorrow (15 May) and will most likely be introduced into the Senate in the coming month.
“This is a fundamentally flawed tax on so many levels and we are calling on the Senate crossbench to halt the progress of this Bill and instead continue to engage with stakeholders and the industry to ensure that the resulting policy and legislation delivers the right outcomes,” Burgess said.
