Despite signs the Government’s proposal for some SMSFs to only be audited every three years had been quietly dropped it may still be on the table, with the Government still considering the outcomes of consultation on the measure.
The Government is still considering a proposal for some SMSFs to only have to be audited every three years.
The measure – which would involve SMSFs with a good compliance history being audited every three years (but for each of the three years) instead of an annual audit – was announced in the 2018/19 Budget. It was meant to start on 1 July 2019, but legislation hasn’t even been put to Parliament.
A proposed increase in the maximum number of SMSFs from four to six was also included in the 2018/19 Budget. But unlike the audit measure, legislation to increase the member cap was introduced to Parliament. Though the Government later amended the Bill to remove the measure.
It had appeared that the Government may have quietly dropped the proposal for 3 year SMSF audits. It had been strongly criticised by industry, and the previous Minister responsible had highlighted the member increase but not the audit proposal in a speech to the SMSF Association National Conference. More recently, the 3 year SMSF audit plan was not included in the Liberal’s superannuation election policies, – which did include the increase to the member cap.
But the proposal for 3 year SMSF may still be Government policy, according to Assistant Minister for Superannuation, Financial Services and Financial Technology, Jane Hume.
Speaking at the 2019 SMSF Expo, Hume said the Government had undertaken “extensive” public consultation on the proposal, and the “outcomes of the consultation are currently being considered”.
Treasury conducted a consultation process on a discussion paper for the measure, which concluded in August 2018.
The Government says three year audits would reduce red tape and could reduce costs on SMSFs. However industry bodies say the measure could actually push up audit prices, and lead to longer delays before compliance issues are identified. The Institute of Public Accountants said its concerns were “falling on deaf ears”, accusing the Government of giving “glib responses”.
Speaking about increasing the SMSF member cap to 6, Hume said it was disappointing the Government was unable to secure the votes to pass the measure.
“It remains government policy to enact this important change, and it will be progressed in line with the Government’s legislative priorities.”
“Despite this small setback, you can see that the government has a demonstrated commitment to nurturing the development of the self-managed super sector. We want to make it easier for those who are actively engaged in the management of their retirement savings to maximise their returns, while maintaining compliance and minimising red tape.”