Financial services want bipartisan policy common sense

As the Federal Election moves into its final weeks, industry lobby groups are seeking to extract undertakings from the major party on key policy issues including the compensation scheme of last resort (CSLR) and the taxation of unrealised capital gains.

While both the Super Members Council (SMC) and the Association of Superannuation Funds of Australia (ASFA) called for policy stability and the implementation of payday superannuation, the self-managed superannuation funds (SMSFs) sector called for the unequivocal ruling out of taxing unrealised capital gains.

The SMSF Association joined with the National Farmers Federation, the Council of Small Business Organisations Australia (COSBOA) and the Family Business Association to call for both major parties to rule out taxing unrealised investment gains.

Their joint statement said their called followed “the Albanese Government’s failed attempt in the last term to introduce a new tax on unrealised superannuation earnings via the controversial Division 296 legislation – a proposal which remains official Labor policy”.

It said that with Australia’s debt projected to soar beyond $1.2 trillion, there are growing fears that other investments– including the family home, investment properties, private trusts, farms or financial instruments – could be next.

“Let’s be clear: taxing someone on paper gains they haven’t received a cent from is not reform – it’s confiscation,” the industry coalition said in a joint statement. “It punishes aspiration, destroys liquidity, and turns volatile market movements into tax bills.”

“The absurdity of taxing paper gains is laid bare with the recent turmoil in investment markets. It shows just how easy it is for a paper gain in one period to be wiped out in the next, leaving the investor with a tax bill for an investment gain they never received.”

For its part, ASFA said it was calling for certainty and stability in superannuation policy while outlining its own policy priorities.

ASFA’s key priorities for the incoming government include:

1. Strengthening fairness in retirement, including by expanding the Low Income Superannuation Tax Offset to improve retirement outcomes for working Australians.
2. Implementing Payday Super without delay so that all Australians get their superannuation entitlements on time.
3. Protecting super for Australians’ retirement by working with the superannuation sector to tackle financial crime, scams, fraud and other actions so that superannuation can be preserved for its intended purpose of retirement.
4. Improve retirement outcomes through quality advice, and to achieve a goal of more Australians being able to access affordable and quality advice to plan for a strong retirement.
5. Reinforcing consumer choice on the superannuation system by enhancing investment choices and informed decision-making in a transparent way.
6. Harnessing the strength of superannuation to support investment in national priorities including housing supply, clean energy and infrastructure.
7. Upholding a stable and efficient superannuation system that is working for millions of Australians through a predictable and balanced policy framework.