CA ANZ ‘does not support’ $3m super tax changes
Responding to the Senate inquiry on the measures to reduce the tax concessions for super balances above $3 million, CA ANZ put forward what it called a “simpler approach”.
Following CA ANZ superannuation and financial services leader Tony Negline appearing before the Senate Economics Legislation Committee inquiry on Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, the accounting body put forward an alternative to the super reforms.
“On balance, CA ANZ does not support the measure to reduce the tax concessions on individuals’ superannuation when total super balance exceeds $3 million,” it said in a statement.
“We believe a simpler approach may be for the government to say that a superannuation fund member cannot have an account balance of more than $10 million unless that person is in receipt of structured settlement contributions, personal injury orders or total and permanent disablement benefits.”
Effectively, CA ANZ said, anyone with an account balance of greater than $10 million would be required to withdraw that money from the superannuation system.
“They should be required to do this over a three-year period or longer if the Australian Taxation Office (ATO) approves,” it said.
“Any benefits should be tax-free to the recipient and capital gains tax should not have to be paid by the superannuation fund when disposing of an asset in order to make this benefit payment.”
However, CA ANZ acknowledged that there would be other policy issues to arise from its proposal.
“For example, there is an argument for saying that those already with a high superannuation balance should be quarantined from a compulsory withdrawal requirement,” it said.
“And if such a policy were to be introduced it should only take effect after a reasonable transition period.”
Reiterating the “large number of reasons” that it does not support the bill as it stands, CA ANZ said the complex design features of the policy will add considerable cost to administer the whole superannuation system.
“It alters the tax mix for those saving for retirement which requires certainty,” CA ANZ said.
“It creates uncertainty which will discourage many from making additional contributions towards their retirement, we question how much net revenue will be raised from this measure, we believe there may be better solutions available to the government.”
It also added that the current design of the policy taxes unrealised gains, which is likely to cause cash flow concerns for several funds.
