Govt warned on super changes
The Federal Government has been warned that its proposed changes to concessional superannuation contributions caps for those aged 50 and over risks repeating the experience of the implementation of the Contributions Surcharge, when the implementation costs exceeded the revenue gained.
The warning is contained in a strongly framed submission to the Federal Treasury from the Association of Superannuation Funds of Australia, which not only refers to the administrative complexity of the current process around contribution caps, but warns of increasing complexity and the risk of a rise in the number of contribution cap breaches.
“Of particular concern is the potential that implementation of the announced change will result in increased ATO [Australian Taxation Office] reporting costs for superannuation funds,” the submission said. “These cost will be borne by all fund members, not just the approximately 2.5 per cent of members that the Government has estimated will have access to the extended cap.
“ASFA would be very concerned to not repeat the Contributions Surcharge experience where the implementation costs for industry and the ATO were estimated to have exceeded the first year revenue gain of $500 million,” it said.
The submission also noted that the implementation of the Better Super regime had shifted the regulation and assessment of superannuation to a ‘contributions only’ basis, while implementation of the proposed new measure would “move the system back to the pre-2007 situation of regulating both contributions and benefits, making regulation both more complex and more costly”.
“It seems somewhat incongruous that whilst implementing Stronger Super reforms aimed at reducing fund administration cost by improving back efficiency, a measure is to be implemented that will increase the complexity, and the overall cost of administering the superannuation system,” ASFA argued.
AUTHOR
Mike Taylor
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