The Government revealed plans to reduce the superannuation supervisory levy by $38.2 million over the next six years, starting with a 10.4 per cent reduction in 2013-14. However self-managed superannuation funds (SMSFs) will see an increase from $191 to $259 per year.
The SMSF Professionals Association of Australia (SPAA) expressed disappointment at the changes.
“The decision to increase the SMSF levy, which equates to around $32 million a year in extra revenue, seems difficult to justify,” SPAA chief executive Andrea Slattery said.
“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.
“In addition, the change in the collection of the levy may have important implications for new SMSFs if they have insufficient funds to pay the levy at the time the fund is established,” she said.
But the Association of Superannuation Funds of Australia (ASFA) was much more pleased with the changes saying that the Government statement recognises the need for levies on all superannuation funds to match the reasonable costs involved in supervision and other related activities.
“In particular we are pleased to see a reduction in the SuperStream levy on the APRA-regulated sector is foreshadowed,” ASFA chief executive Pauline Vamos said.
“The Australian Taxation Office (ATO) will also be better funded through the increase in the levy on self-managed superannuation funds,” she said.
Ms Vamos also said that one of the most significant changes that members of superannuation funds should be aware of is changes to the arrangements applying to unclaimed monies and lost members.
“This has the potential to bring over $500 million into consolidated revenue. The most important action that members of funds must do is locate their lost funds, consolidate their accounts and ensure that their super fund has their latest contact details,” she said.
But shadow assistant treasurer Mathias Cormann was much more critical of the reforms describing them as a ‘wafer thin surplus promise’.
“More than half of Labor’s wafer thin $1.1 billion surplus for this financial year will come from a six month Federal Government raid on supposedly lost superannuation savings,” Mr Cormann said.
He said that plans to reduce the period of inactivity before an account is required to be transferred to the ATO from five years to 12 months is the most significant.
“There is no doubt that this will increase the risk that some people will lose their money to the ATO before they have had the chance to make their own arrangements to consolidate their super accounts,” he said.
He also expressed dissatisfaction with the increased levy on SMSFs.
“It is quite extraordinary and takes spin to new levels that Superannuation Minister Bill Shorten would describe these cash grabs as measures to ‘boost super savings’,” he said.
“These latest cash grabs targeting superannuation come on top of $7.8 billion in increased taxes and charges on superannuation in Labor’s first five budgets.”
