MYEFO earns mixed response
The Federal Government has received a mixed response to the financial services and superannuation initiatives evolving out of its Mid-Year Economic and Fiscal Outlook (MYEFO).
While the SMSF Professionals' Association of Australia (SPAA) welcomed the continued tax-exempt status of pension earnings, the Federal Opposition claimed more than half of the Government's forecast $1.1 billion surplus would "come from a six-month Federal Government raid on supposedly lost superannuation savings".
Commenting on the MYEFO initiatives, the shadow Assistant Treasurer, Senator Mathias Cormann, said the decision to let the Australian Taxation Office (ATO) go after more lost super much more quickly was expected to raise $555 million in six months - and suggested it would increase the risk that some people would lose their money to the ATO.
However SPAA chief executive Andrea Slattery said the decision to continue the tax exemption for pension earnings after the death of a pensioner was excellent news for the thousands of SMSFs in the pension phase, which might have faced significant capital gains tax bills on the payment of death benefits.
"SPAA believed the previous ruling was unjust, and we have been assertive with other sections of the industry to have the law amended," she said.
Slattery was far less welcoming of the Government's decision to increase the self-managed superannuation fund (SMSF) levy, which she said seemed difficult to justify.
"It has been sold on the basis of cost recovery, but further details of the increased cost to SMSFs are required from the Government to support such a substantial increase," she said.
Major accounting firm RSM Bird Cameron also welcomed the continuation of the tax exemption on pension earnings, with the company's superannuation principal Brad Eppingstall saying it would make investment by an SMSF in a property more attractive.
"Once we have the final revised law, SMSF members should review their estate planning with their superannuation benefits to determine if any changes need to be made as a result of this announcement," he said.
Financial Services Minister Bill Shorten claimed the MYEFO initiatives would better protect lost superannuation savings, and suggested the rise in the SMSF levy was equitable in circumstances where the levy was not fully covering the costs of regulating a rapidly growing industry.
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