- ‘Simplest and best way’: Treasurer defends plans to tax unrealised gains
After an outcry from industry and sector associations over the proposed $3 million super tax, Treasure Jim Chalmers was quickly out defending the government’s rationale.
Within a week of the initial announcement Mr Chalmers was spruiking the idea that the ATO would use an individual’s total super balance to calculate their earnings, meaning it would include all notional (unrealised) gains and losses.
He said the decision to include unrealised gains in the earnings calculation for the proposed $3 million threshold was on the advice of Treasury.
“That’s the advice of Treasury, working with other relevant agencies, that that is the most efficient, simplest and best way to go about it, and so that’s what we intend to do,” he said.
The backlash to this was swift and fast from leaders within the sector and it has continued throughout the year, but it seems their concerns have so far fallen on deaf ears.
Read more here.
- Government releases proposed objective for super
February was a busy month for legislative proposals. As well as the release of the first $3 million super tax consultation, the month also saw the release of the government’s proposal for the objective of superannuation.
The government said it wanted to legislate the meaning of the objective of superannuation as the means to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.
The consultation paper stated that legislating the objective of superannuation would provide stability and confidence to policy makers, regulators, industry and the community, and that changes to superannuation policy will be aligned with the purpose of the superannuation system.
“It will also ensure members and funds have a shared understanding of the purpose of superannuation throughout both the accumulation and retirement phases,” it said.
The move was welcomed by most of the sector who said that the objective had to be defined before further policy changes could be implemented and to safeguard retirement savings.
Read more here.
- ASIC freezes assets of SMSF investment platform
As the SMSF community continued to grow, so did the number of companies that offered advice and services.
However, not all were above board in their operations and, in October, Australian Financial Services licensee Brite Advisors (Brite) had its funds and assets frozen.
Brite and its related entities operated in multiple countries including the UK, US, Hong Kong, and Australia providing advisory, pension administration and asset management services.
Brite Platform offered an investment platform to self-invested personal pension providers, qualifying recognised overseas pension schemes, and self-managed superannuation funds.
ASIC ordered the action due to a number of concerns including:
- The current financial position of Brite is unknown, as Brite has failed to lodge with ASIC its financial statements and auditors report for the financial year ended 30 June 2022.
- The value of Brite’s funds under management has not been reported by any entity within the Brite Group in an audited balance sheet since December 2019.
Read more here.
- Class action launched against Caddick auditors
Nearly three years after she was reported missing, Melissa Caddick made headlines again in October 2023 when 24 of her victims filed a lawsuit in the Federal Court alleging the auditors engaged to review the annual financial reports for the SMSFs failed to identify fraudulent documents.
Law firm Mackay Chapman alleged the documents prepared by Ms Caddick and failed to confirm that the assets said to be held by the SMSFs in fact existed.
It further alleged that the five auditors were negligent, engaged in misleading or deceptive conduct and/or representations, and breached the Corporations Act and the ASIC Act.
“The auditors all provided audit reports that, in effect, gave the SMSFs a clean bill of health,” Mackay Chapman said.
“Specifically, all of the audit reports found that the financial reports for the SMSFs were ‘free from material misstatement’ and ‘presented fairly in all material respects the financial position of the SMSF’. In other words, they did not identify any concerns.
Read more here.
- Government confirms plans for $3 million super cap
It was back in February that the government announced its plans to introduce the controversial $3 million super tax.
Prime Minister Anthony Albanese said at the time the new super cap would see the earnings on super balances above $3 million taxed at a concessional rate of 30 per cent, rather than 15 per cent.
He said the reform would “strengthen the system by making it more sustainable” and impact approximately 80,000 people.
“This proposed change does not change the fundamentals of our superannuation system, 99.5 per cent of people with superannuation will be unaffected by this reform,” he said at the time.
Read more here.
