SUPERANNUATION – TAXATION – AUSTRALIA

Chalmers unmoved by $3m super-tax critics

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Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 27-Aug-24

Former prime minister Paul Keating has criticised the federal government in regard to its proposal to increase the tax on high-value superannuation accounts. Keating is unhappy about the part of the proposal that involves taxing unrealised gains, while he says if there has to be a threshold, it should be at least $5 million and should be indexed; the government is talking about an account balance threshold of $3 million and does not plan to index it at this stage. Crossbench MPs have echoed Keating’s concerns, but Treasurer Jim Chalmers has rejected the criticisms of Keating and the crossbench MPs, contending his proposals are modest and that he is not open to amending them.

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AUSTRALIA. DEPT OF THE TREASURY

Well-off super savers face $2.3b hit

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Original article by Hannah Wootton
The Australian Financial Review – Page: B10 : 10-May-23

The budget papers have confirmed that the tax rate on the earnings of superannuation funds with balances of more than $3m will increase to 30 per cent from mid-2025, and that the cap will not be indexed to inflation. The tax change is forecast to generate revenue of $2.3bn in 2027-28, its first full year of receipts collection. This is based on the number of superannuation accounts that are currently above the cap, although this may change if people shift money out of super in order to avoid the cap. Meanwhile, the federal government will press ahead with plans to require employers to pay their staff’s super entitlements at the same as their wages, rather than allowing them to do so each quarter.

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Super tax may cost more than it raises

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Original article by Glenda Korporaal
The Australian – Page: 17 : 15-Mar-23

The SMSF Association will establish a working group of technical experts which will assess the federal government’s proposed changes to super tax concessions. CEO Peter Burgess says the proposed reforms could potentially prove to be as disastrous as the super surcharge regime, which cost more to implement and run than it raised in tax revenue. Burgess adds that the SMSFA is concerned that the proposed changes could have unintended consequences and could affect public confidence in super.

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SMSF ASSOCIATION

Labor concedes super tax rise to hit more retirees

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Original article by Phillip Coorey
The Australian Financial Review – Page: 7 : 7-Mar-23

The federal government’s plan to increase the tax on earnings on superannuation balances above $3 million from 15 to 30 per cent is currently only slated to impact 0.5 per cent of all superannuation account holders. However, the government has confirmed that this will rise to one in 10 people within 30 years, because the cap will not be indexed to inflation. Treasurer Jim Chalmers has stated that if a future government wants to index the cap, then that would be their prerogative.

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AUSTRALIA. DEPT OF THE TREASURY

Super-sized broken promise

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Original article by Geoff Chambers, Patrick Commins
The Australian – Page: 1 & 4 : 1-Mar-23

The federal government has announced that it will increase the concessional tax rate for superannuation balances of more than $3m from 15 per cent to 30 per cent. The tax reform will be included in the May budget and legislated during the current term of parliament; however, it will not take effect until 1 July 2025, after the next federal election. Labor had ruled out changes to the super tax regime during the 2022 election, and shadow treasurer Angus Taylor has described the backdown as another broken election promise. The super changes are expected to hit about 80,000 individuals, and Prime Minister Anthony Albanese has emphasised that 99.5 per cent of Australians will not be affected.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Tax the rich to pay for parental leave contributions: HESTA

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Original article by Lucy Dean, Tom McIlroy
The Australian Financial Review – Page: 6 : 1-Feb-23

Industry superannuation fund HESTA has used its pre-Budget submission to urge the federal government to cap super fund balances at $5m. CEO Debby Blakey notes that balances of around $5m receive about $70,000 worth of tax concessions annually, which is more than many of HESTA’s members earn in a year. HESTA has also called for the threshold at which high-income earners pay more tax on super to be lowered from $250,000 a year to $180,000; Blakey says this would allow more money to be directed to the Commonwealth Parental Leave Pay scheme. She contends that Australia’s superannuation system has a "persistent gender blind spot" that must be addressed. Some 80 per cent of HESTA’s members are women.

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HEALTH EMPLOYEES’ SUPERANNUATION TRUST AUSTRALIA LIMITED

Shorten’s $34b super gaffe

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Original article by Andrew Tillett, Tom McIlroy
The Australian Financial Review – Page: 1 & 6 : 17-Apr-19

Opposition Leader Bill Shorten used a press conference on 16 April to state that Labor will not increase existing taxes on superannuation or introduce new taxes if it wins the federal election. Shadow finance minister Jim Chalmers later clarified Shorten’s comments, stating that he meant there will be no changes to super policy apart from those that have been previously announced. Labor has in fact previously announced four proposed changes to super policy. The Coalition has estimated that these reforms could increase tax revenue by about $34bn over a decade.

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AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, GRATTAN INSTITUTE

Shorten super tax net to trap a million

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Original article by Rosie Lewis, Adam Creighton
The Weekend Australian – Page: Online : 12-Jan-19

Treasury analysis indicates up to one million Australians could be impacted by superannuation tax changes if Labor wins the next election. Labor’s planned changes include a cut to the cap on non-concessional superannuation contributions that people can make each year, and a reduction in the high-income super contribution threshold. The self-employed and mothers returning to work from maternity leave are among those most likely to be affected by Labor’s changes.

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AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, RICE WARNER ACTUARIES PTY LTD

Multiple SMSF strategy may prove illegal

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Original article by Sally Patten
The Australian Financial Review – Page: 5 : 24-Apr-17

Changes to superannuation tax rules from 1 July 2017 may prompt some investors who already have one self-managed super fund (SMSF) to set up a second one. However, the Australian Taxation Office has indicated that it will keeping a close eye what it perceives as any attempt to reduce tax by setting up a second SMSF. Fines, penalties and even disqualification are possible remedies available to the ATO.

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AUSTRALIAN TAXATION OFFICE, SMSF ASSOCIATION, HLB MANN JUDD

Super win sparks stoush

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Original article by Phillip Coorey, Joanna Mather
The Australian Financial Review – Page: 1 & 8 : 24-Nov-16

Federal Treasurer Scott Morrison has ruled out further changes to superannuation after the Senate passed tax reforms that had been announced in the May 2016 Budget. The changes that take effect on 1 July 2017 include restricting annual concessional contributions to no more than $A25,000 and imposing a $A1.6m cap on super retirement accounts. The reforms are expected to generate total savings of $A3bn over four years. However, the Government has stressed the need for a further $A20bn of Budget repair measures if the nation is to retain its "AAA" credit rating.

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AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSION, S&P GLOBAL RATINGS