Treasury admits it never modelled impacts of $3m super cap
The Federal Treasury has admitted it cannot say with any certainty whether industry estimates that an absence of indexation will see as many as 500,000 people will be affected by the Government $3 million superannuation tax cap.
Senior Treasury officials said they had not done detailed modelling on the 500,000 projection produced by the Financial Services Council (FSC) and admitted that even using their own modelling formula the final numbers might not be significantly different.
Giving evidence before the Senate Economics Legislation Committee, Treasury Assistant Secretary, Adam Hawkins admitted that Treasury’s estimate of 80,000 superannuation fund members being affected only applied to the first year of the measure in 2025/26.
He said Treasury had not, as yet, tested the validity of the FSC modelling.
Hawkins was responding to questioning from the deputy chair of the committee, NSW Liberal Senator, Andrew Bragg.
“We have not undertaken a detailed review but I would say that my initial reaction to the modelling that the FSC has done is that it is markedly different to the way Treasury would undertake that sort of exercise,” Hawkins said.
Bragg then asked Hawkins: “Well, what do you that number is then?”
The Treasury assistant secretary said the department had not undertaken a detailed review beyond the 2025/26 impacts but went on to state: “the [FSC] methodology is markedly different to the approach we would take but that is not to say that the number would be different because we have not undertaken that analysis”.
“…It is a fair assumption that without indexation the proportion of the population affected will rise over time,” Hawkins said noting that the Treasurer, Jim Chalmers, had said this “would contribute to the sustainability of the system over time”.
Hawkins had previously told the committee chair, Victorian Labor Senator, Jess Walsh that, “We’ve estimated that in the first full financial year that the tax applies – that’s 2025/27 – that’s 80,000 individuals or around 0.5% of all Australians with a superannuation balance will be captured”.
Regulatory Capture Corruption off the hook in Canberra.
Treasury don’t want to assess Super Law changes as it mostly affects SMSF people and very, very few Industry Super Funds people.
Canberra’s bureaucratic swamps need to be cleaned right out.
Can someone please explain to me why I have had to do hundreds of hours of ethics training?
Just imagine this was an financial adviser saying we didn’t do our research for a client, but we made a recommendation anyway we would be labeled evil, money hungry, heads on sticks etc. They should lose their jobs and the minsters should also lose their jobs.
Canberra Pollies & Bureaucrats don’t have to follow silly Rules or Laws like the rest of us plebs.
CANBERRA TRUELY BELIEVE & ACT AS THEY ARE THE RULES AND THE LAWS UNTO THEMSELVES.
Treasury, the very same people that reported they didn’t care about job losses in the Financial Planning Sector in their FOFA review. I don’t really care if a few Treasury Officials get the sack….
Interesting that they were so easily able to rule out their own defined benefit pensions from counting towards that cap.
Nor did they model the CSLR, Treasury has nil commercial interest (in my direct liaison with them), is not equipped or experienced to be reviewing such matters and will lead to poor outcomes. Does anyone disagree with this view ?