Temporary resident exemption creates dilemma

Fiona Reynolds

Key superannuation industry executives have expressed concern at Government proposals that would allow non-residents to direct the superannuation guarantee to the Australian Taxation Office rather than a superannuation fund.

The chief executive of the Australian Institute of Superannuation Trustees, Fiona Reynolds, said she could see a range of problems flowing from the arrangement, including the fact that non-residents would not enjoy the insurance cover provided by superannuation funds.

She said that another problem was that funds would not be in the business of chasing up the superannuation guarantee if it were not paid by an employer.

“I can see why they are doing it but I can see a number of problems arising,” Reynolds said.

The chief executive of the Association of Superannuation Funds of Australia, Pauline Vamos, said that the new arrangements, as with the First Home Saver Scheme, represented a building of cost onto superannuation funds.

“We are struggling and the amount of system change over the last three years has been enormous,” Vamos said.

“And we all know that the cost of changing the system, setting the system and designing the system, not to mention the cost of training the people to use it, is enormous.

“We as an industry need to start pushing more and more for regulation that will help streamline the industry, and the way in which they have approached the temporary residents question is not going to help that,” she said.

The chief executive of the Investment and Financial Services Association, Richard Gilbert, said that there was a need for the Government to streamline the administrative arrangements and that if this were not the case there was the potential for real problems, particularly with respect to the insurance issues.