Independent members of parliament have been highly critical of the unaddressed concerns within the bill currently before parliament to introduce the tax on total super balances over $3 million, or the Division 296 tax, with one labelling it an attack on the SMSF sector to drive members into industry funds.
The Better Targeted Superannuation Concessions bill was debated for the second time yesterday afternoon in the House of Representatives with independent member for North Sydney Kylea Tink stating members of her electorate were concerned the bill was targeted specifically at members of SMSFs.
“While people in my electorate broadly support the intent and principle of the bill they’re also very concerned that the legislation is being poorly executed and will create a dangerous precedent within our taxation system,” Tink said.
“They are also concerned this legislation is really a trojan horse, designed to put an end to self-managed super funds and instead preference the large commercial superannuation entities, as those can better be influenced by the government of the day in terms of priority areas for national investment.”
Tink’s views were echoed by independent member for Monash Michael Broadbent who noted some SMSF members caught by the measure will be unable to freely move those funds out before the tax applied.
“You can say, ‘Righto, if you’ve invested in your superannuation fund and it’s over $3 million, we’re going to change your taxation arrangements,’ but at that point you should allow anybody to withdraw their funds from their superannuation and invest them in any way they would like, no matter what age they are, because you have changed the rules,” Broadbent said.
“They [the government] said, ‘Oh no, you can’t do that,’ because who’s dominating? The big union superannuation funds are directing what they can and can’t do.
“This government does not want self-managed superannuation funds. The big superannuation funds do not want self-managed superannuation funds.”
Tink highlighted the bill had remained unchanged despite widespread industry feedback about the lack of indexation for the $3 million threshold and the taxing of unrealised gains.
“This government has displayed little appetite for true community engagement around this legislation, and certainly has not appeared to be interested in considering any of the alternative design models presented.
“The alternative designs were sensible, appropriate, well-designed and would have significantly improved this legislation. Yet the government has chosen to ignore them and not engage in any meaningful way to come to a more sustainable and reasonable position.
“This brings me back to my initial concern that, despite all the rhetoric around this reform, this agenda is not just about taxing the rich. It’s about trying to shut down the self-managed super fund option.”
The debate on the bill saw five independents join with the opposition in not supporting the bill while independent Monique Ryan declaring she would support the bill but called for changes to indexation.
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