Much Ado About Nothing? At least from an SMSF perspective
What is in the budget for SMSFs?
- In short no changes.
- In particular: no changes to super gearing/instalment warrant arrangements, post age 60 super benefits are still tax free, earnings on pension assets still tax free and $450,000 contribution “bring forward” still applies.
What is not in the budget for SMSFs?
- The governance review of SMSFs was not mentioned. This review is progressing and any changes in the regulation of SMSFs will be announced later.
- The changes arising from general “root and branch” review of the Australian Tax System will not be announced until 2009 or later.
- No mention of increasing the compulsory super guarantee rate from the current 9%.
Some minor matters which may affect SMSFs and members
- The ATO will operate a super contribution clearing house for employers;
- The clearing house will be free for employers with less than 20 employees, and for other employers a fee will be charged; and
- Means testing of certain welfare payments will treat “salary sacrifice” employer contributions as income of the member.
What else is happening?
- The Federal Government has previously announced that discrimination against same sex couples will be removed from areas of federal responsibility such as superannuation and tax concessions for superannuation.
- First Home Saver Accounts – will be introduced. However, the government has previously indicated that SMSFs will not be able to offer these accounts (though the balances from these accounts, if not used for housing purposes, can be rolled into super funds including SMSFs).
The Politics of Super!
With the first Rudd Government budget some change to former Coalition Government’s initiatives to bolster superannuation could have been expected. The thrust of the first Rudd Government budget is supportive, for the moment, of the Simplified Super measures.
This bears out the Minister for Superannuation, Senator Nick Sherry’s pre-budget announcement that the government’s short-term approach to super will be to monitor rather than change. So some very significant Coalition Government superannuation initiatives remain.