Accountants accuse Govt of creating two-tiered super system
Accountants as the primary representative group of self-managed superannuation funds (SMSFs) have hit back against the big, APRA-regulated funds over non-arms-length expenses (NALE).
The major accounting groups plus the SMSF Association have told Treasury that the Government will be creating a two-tiered superannuation sector if it proceeds with proposals to exempt the large funds from the NALE regime.
In a joint submission, the groups said “the proposed changes outlined in the exposure draft introduce a distinction between different segments of the superannuation sector in relation to taxation”.
“By exempting large APRA-regulated superannuation funds from both general and specific expenses within the NALI/E regime, a tax differential is created, resulting in different treatment for different types of superannuation funds,” it said.
“This differential treatment raises questions, as the trustees of these funds are subject to the same statutory best financial interests duty, common law fiduciary obligations and the sole purpose test, making the discrepancy in treatment questionable.”
“We do not support differential treatment of superannuation funds where a differential treatment is unnecessary,” the joint submission said.
It reminded the Treasury that, “originally, the NALI policy was aimed at imposing income tax penalties on superannuation funds involved in non-arm’s length transactions.
“Its intention was not to bypass the contribution caps, as suggested in the Treasury Consultation Paper released in January this year. Nor was its intention to allow superannuation fund members to breach their transfer balance cap.”
The joint submission from CPA Australia, Chartered Accountants ANZ, the SMSF Association, the Institute of Public Accountants and the Tax Institute stands in contrast to that of organisations representing the major superannuation funds.
Both the Association of Superannuation Funds of Australia (ASFA) and the Australian Institute of Superannuation Trustees (AIST) have not only reinforced the need for APRA-regulated funds to be excluded from the NALE regime but have also urged a back-dating of that exclusion to 2018.
The union funds have to be exempted from NALE, how else will they be able to keep those “support businesses” for the union funds running when they are owned by union officials and/or the union movement?
Industry Super Funds increasingly pushing their own agenda to have no rules.
APRA & ASIC letting it all happen.
The so called super wars don’t end until the flow of money from industry super to unions/Labor stops. Until then Labor will protect them and attack other super funds like SMSFs, and the Coalition will do the reverse.
Unfortunately the Coalition did nothing to help SMSFs. Quite the opposite, they
1) killed 45% of Advisers,
2) made SMSF audits be external and killed heaps of SMSF auditors,
3) made the most stupidly complicated modern RBLs / Pension caps, system.
4) left legacy SMSF TAP pension in limbo
5) made LRBA interest rates stupidly high with their artificially high safe harbour
6) Limited AFSL to Accountants disaster
7) ATO based Pension cap & contribution reporting that only Accountants can see but cannot give advice and Advisers can’t see but need it for advice.
8) NALE/I disaster still festering along
The list goes on and on, the Coalitions last 10 years certainly did not help SMSF or Advisers.
At the same time the LNP did nothing to ISA to stop related party dodgy services owned by Union bosses, nothing to dodgy unlisted asset values.