Taxing unrealised capital gains moves into the election arena
ANALYSIS
Reports that key cross-bench Senators will oppose elements of the legislation underpinning the Government’s $3 million superannuation tax cap will be closely watched by financial planning lobby groups as they seek to extract a more definitive outcome around the payment of advice fees from superannuation.
As well, with Parliament due to adjourn for its traditional winter break, the status of the $3 million superannuation tax cap and the associated taxation of unrealised capital gains are increasingly looking like becoming election issues.
The Government is hoping to push the Treasury Laws Amendment, Better Targeted Superannuation Tax Concessions legislation through the Parliament before the winter break but the reported positions of independent senators, Jacqui Lambie and David Pocock make this a far from certain prospect.
Sitting at the heart of the issue is the Government’s unwillingness to budge on the elements of the legislation which give rise to the taxation of unrealised capital gains.
However, also an issue is the Government’s similar stubbornness on the need to apply indexation to the $3 million cap to avoid the inevitability of bracket creep.
The fact that the Senate cross-bench has come into play on the legislation is testament to the lobbying efforts of the financial planning and accounting sectors but, most particularly, those involved in self-managed superannuation funds (SMSFs).
Also effective in the process has been the lobbying of primary producer groups which have been quick to point out the impact the taxation of unrealised capital gains will have on the illiquid assets held within farmers’ SMSFs.
The problem for the Government is that delays to the passage of the legislation will deliver the Federal Opposition the ability to question the Government’s honesty on superannuation tax policy, in circumstances where it went to the last Federal Election promising no substantial change to the super tax settings.
The reality for the Government is that the election count-down clock is already ticking and it will tick even more loudly when Parliament resumes its sittings in August.
The government has increased the tax on superannuation, whilst also giving superannuation funds the right to refuse some payments retirees want to make from their pension fund. They are destroying the superannuation system.
The only reason they are trying to Tax Unrealised Capital Gains is because the Industry Funds can’t easily show the income earned.
I’d imagine that a small % of over $3 Mill Super Accounts are in Industry Super.
So clearly the ALP, Jonesy, Treasury, etc are showing their confirmed bias to Industry Super.