The shadow Minister for Financial Services, Superannuation and Corporate Law, Chris Pearce, has raised the spectre of requiring self-managed superannuation funds (SMSFs) to meet minimum asset value requirements.
At the Self-Managed Superannuation Professionals’ Association of Australia (SPAA) conference in Adelaide, Pearce said if the Rudd Government were hatching such a plan, it could explain why a review of SMSFs announced in February, 2008, was taking so long to conclude.
“We are yet to see anything of this review, which is one of twenty-three reviews, consultations, committees and reports occurring across the portfolio,” Pearce said.
“The only light that I can shed on this extremely drawn-out and tardy process is the rumour that the government may implement barriers to entry.
“I understand that, worryingly, the Government could be planning to mandate a minimum self-managed fund balance of between $150,000 and $250,000.
“Our strong view is that regulatory overkill has the potential to significantly hamper the self managed sector and this is most likely to occur through excessive barriers to entry.
“I believe that by mandating minimum balances, we run the risk of excluding individuals who choose to build their self managed superannuation fund balances gradually; over a number of financial periods or years.”
Pearce said data from the Australian Taxation Office (ATO) indicated that the number of SMSFs with less than $100,000 had fallen from 33 per cent in 2001 to 13 per cent in 2007.
Pearce did not outline what the global financial crises, and consequent falls in asset values, may have had on account balances since 2007.
However, he said: “I would suggest to you that there is no justification for mandating a minimum account balance as the numbers indicate that the problem is naturally abating.”
Asked if there were any other rumours about what the February 2008 review might be considering, Pearce declined to speculate.
“I am not a rumour-monger, in any way, shape or form,” he said. “I have absolutely no idea what is going on with that.”
The Minister for Superannuation and Corporate Law, Senator Nick Sherry, is due to address the convention on Friday morning.
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