Opposition and peak SMSF body call for a stop to tinkering with rules 

The chief executive of the peak self-managed super fund industry body has backed calls by the Shadow Minister for Financial Servies Kevin Hogan for the government to quit tinkering with the rules and provide the sector with greater stability and certainty on how funds are structured, administered and invest. 

Hogan said in a statement on Thursday that the government has substantively changed the rules for SMSFs four times in just five months. 

It has introduced the Division 296 tax changes and a higher effective tax rate on the capital gains of super funds that hold their assets indirectly through managed funds such as ETFs, banned SMSFs from borrowing to buy residential property, and last month introduced mandatory trustee education, a written investment strategy, a new ATO veto power over people moving their money into an SMSF, adviser disclosure, and a new CSLR levy contribution. 

“We don’t know what the education requirement will be, who provides it, or what happens if someone fails. We don’t know in what circumstances the ATO will exercise their new power,” Hogan said. 

“That’s concerning when the Prime Minister is calling your super a ‘national asset’ to be directed into pet projects like social housing or green energy.”  

“The 1.2 million Australians with an SMSF don’t want special treatment. They just want stability. Give them a break.” 

SMSF Association chief executive officer Peter Burgess said stability and certainty are “essential for people managing their retirement savings”.  

In comments provided to Professional Planner, he said SMSF trustees make long-term investment and retirement decisions, and frequent changes to the rules inevitably increase complexity, compliance costs and the administrative burden placed on trustees and the professionals who support them. 

“It’s the cumulative effect of all these changes and proposed changes that is the problem – having to continually understand, obtain advice and adjust to and comply with changes across tax, investment, borrowing, and regulatory settings. That complexity ultimately comes at a cost to members,” Burgess said. 

“Our primary concern is that policy responses remain proportionate and don’t unfairly position or single out SMSFs as the problem child. The SMSF structure itself was not the cause of the large-scale consumer harm we have seen in recent times.” 

That harm, Burgess said, arose principally from misconduct, which included inappropriate and conflicted advice and consumers being directed into unsuitable investments.  

“We should be careful not to impose additional obligations on the broader SMSF population where those obligations do not address the underlying cause of the problem.” 

 Burgess called for stronger proactive regulatory surveillance and effective enforcement of laws that are already in place. 

“New legislation will achieve little if misconduct is not identified and acted upon before consumers lose their retirement savings,” he said. 

“Critically, any policy settings must preserve sector neutrality. To the greatest extent possible, Australians should not face materially different regulatory or tax outcomes simply because they choose an SMSF rather than another form of superannuation.”