The Federal Budget has received a qualified response from the financial services industry, with the rectification of issues around excess superannuation contributions being welcomed but some tax measures being queried.
Among the first to respond was the Financial Services Council (FSC), with chief executive John Brogden setting the tone by welcoming initiatives that make superannuation investment in infrastructure more attractive along with what he described as “minor improvements to superannuation regulation”.
“The focus in this Budget will ensure that infrastructure becomes a more attractive investment,” Brogden said. “The tax changes will undoubtedly make projects on Infrastructure Australia’s national priority list more favourable to investors.
“The amendments to the change of ownership tests remove a tax anomaly and recognise that infrastructure projects are long-term investments.”
Brogden said the FSC also welcomed changes to superannuation regulations but said drawdown relief to self-funded retirees was less than in previous years.
“The Government has extended the relief on drawdown for self funded retirees. However, the relief is less than previous years at only 25 per cent (currently 50 per cent),” he said. “We would have liked the relief maintained at 50 per cent as the assets of many self-funded retirees are yet to fully recover.”
The Australian Institute of Superannuation Trustees (AIST) welcomed the measures providing flexibility to the rules surrounding breaches of the concessional contributions caps, and the increase of the higher cap for over-50s.
AIST chief executive Fiona Reynolds said they would create a fairer system for individuals who might have accidentally breached their cap but they still did not go far enough.
She noted the Government had also confirmed the concessional contributions cap for those aged 50 and over would be set at $25,000 above the general concessional cap limit, which is currently $25,000.
For its part, the Institute of Public Accountants claimed the Government had not provided adequate funding to achieve its outcomes.
“The Government has announced its intention to massively increase the regulatory role of the Australian Securities and Investments Commission, the Australian Taxation Office and Tax Practitioners Board but has failed to provide the funding to adequately ensure those reforms are carried out,” IPA chief executive officer Andrew Conway said.
“The accounting profession has supported the Future of Financial Advice Reforms (FOFA) and Stronger Super based on the assumption that the regulators, particularly ASIC, would have the dollars to implement their roles,” he said. “The refusal to adequately fund the regulators could put taxpayers at risk.”
