Assistant Treasurer and Financial Services Minister Stephen Jones has confirmed the Albanese government will be looking to reassess the superannuation tax concessions and has singled out certain SMSFs as a trigger for the review.
Speaking at the AFR Super & Wealth Summit 2022 in Sydney recently, Jones told delegates: “We have 32 self-managed superannuation funds with more than $100 million in assets. The largest self-managed superannuation fund has over $400 million in assets. Now if the objective of superannuation is to provide a tax-preferred means for estate planning, then you could say it’s done its job pretty well.
“Don’t get me wrong, the government celebrates success, but the concessional taxation of funds like these has a real cost to the budget.”
According to the Minister, Mercer data estimates the tax concessions on a super fund with $10 million of assets could support 3.1 full aged pensions and these figures highlight the need to address the issue.
He pointed out defining and legislating the objective of superannuation will form part of the process and the government will consult widely in an effort to do so.
“With an objective that is settled, we can then talk sensibly about these taxation issues, including the taxation of high-balance superannuation funds,” he noted.
“Those who support the status quo will need to demonstrate how concessional taxation arrangements for high-balance super funds meet the common objective we’ve all agreed on.
“Those who argue for a change will need to show that that approach meets the objective.”
However, Jones indicated the government is likely to be approaching the review of the superannuation tax concessions with a view the system requires change given it has produced super funds with very high asset holdings.
“I’d start from the proposition that you’re really going to struggle to convince the government that a retirement savings balance of $100 million is all about retirement savings,” he said.
''