The passage of four bills through the Senate on Monday night shows the government has remained consistent with previous announcements on superannuation reform but there is cause for concern in some of the detail.
AMP SMSF head of policy and technical Peter Burgess told Professional Planner that while there where no real surprises in legislation, affected taxpayers would struggle to restructure before July 1.
The four bills are the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2013, Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill 2013, Superannuation Laws Amendment (MySuper Capital Gains Tax Relief and Other Measures) Bill 2013, and the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Caps and Other Measures) Bill.
The Association of Superannuation Funds of Australia (ASFA) called for “regulatory pragmatism” when it comes to the implementation of the reforms contained in the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2013 because of the tight turnaround time.
Taxing times
ASFA CEO Pauline Vamos says the bill and associated regulations contain substantial and complex changes that impact many parts of the operation of superannuation funds. A substantial number of these changes start next month.
“With July 1 looming, the late passage of this Bill has left funds with just under a week to ensure they comply. Given that there are still many details which need to be determined in relation to implementation, we are calling on regulators to be pragmatic in their approach to enforcing compliance,” she said.
Burgess (right) reiterated this view, saying those making over $300,000 per year may not have time to explore ways of getting their income below this threshold.
From July 1, individuals earning income of more than $300,000 will have their contributions tax rate increase from 15 per cent to 30 per cent.
However, Burgess welcomed the government clarification that the Australian Tax Office will collect this tax in the same way as excess contributions tax and not via a surcharge.
According to the Labor government, the reforms will boost the national pool of superannuation savings by more than $500 billion by 2037.
It is just discusting that a Government can regulate in this manner. They should be sooo ashamed!