ASFA calls for rapid end to super surcharge
Following the Senate’s rejection of the Bill to abolish the superannuation surcharge on Wednesday, the Association of Superannuation Funds of Australia (ASFA) has called for support in bringing the unpopular tax to a rapid end.
ASFA chief executive officer, Philippa Smith, said ASFA was concerned by the “nuisance value” of delays to the Bill’s introduction.
“Across the industry there’s been one voice: that the surcharge destroys incentives, complicates superannuation and creates inequities,” she said.
While Smith expects the legislation to be reintroduced following the change in composition of the Senate after July 1 2005, she said the tax had always been inequitable and inefficient and its prompt removal would provide greater certainty for both funds and fund members.
“Always the fairest way of taxing superannuation is when people actually go to collect their end benefits because you can then set a tax structure that is far more equitable,” Smith said.
With the changing population of surcharge payers from year to year, Smith said ASFA’s research indicated the removal of the surcharge from future superannuation contributions would benefit over one million Australians.
“The surcharge has falsely been described as a tax that applied only to ‘the rich’, when in fact many middle income earners were caught by the surcharge, including police and workers with shift allowances, or those who had employer-provided accommodation.”
According to Smith, passing the legislation now rather than waiting several weeks would allow funds to start simplifying systems and disclosure materials, while individual members would be more confident about making salary sacrifice and other contributions potentially subject to the surcharge.
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
