Budget 2016 superannuation Bills introduced to Parliament

The Government has introduced three superannuation Bills to the House of Reps, which include measures from the 2016 Budget and enacting an objective for superannuation.

The Government has introduced the following Bills to Parliament:

The legislation was cleared for introduction by the Coalition party room on Tuesday, and comes the day after Labor announced its latest superannuation policy and the same day as the US election.

Draft versions of these Bills were released in three tranches for consultation, which did result in changes.

The Treasurer Scott Morrison said in a press conference on Tuesday: “These Bills summarise the Government’s changes to make superannuation fairer more sustainable and more flexible for all Australians. These are the measures that we outlined in the Budget earlier this year and that we took to the election, in a very upfront and very honest and very transparent way.”

“Over the course of the period of time that has elapsed since the Budget, people have expressed their views on that package. While, overwhelmingly, the package has been supported, to the extent that changes were necessary to that package of the election, we have worked with our Government team to ensure that we introduced changes to those measures that now form the complete package that we are bringing into the Parliament tomorrow.”

“It was a comprehensive process. Since the election exposure draft legislation has been released in a series of tranches since September and we’ve had over 150 submissions in response to that consultation, and received very good feedback, technical feedback, on the construction of these Bills.”

“And in a number of cases you’ll see in the Bill, we’ve improved the transition measures to provide more time for transition in particular cases, extending some of those interim timeframes for people to make the adjustments when it all comes into place next year.”

One such extension to a transition provision is for excesses of the Transfer Balance Cap. The explanatory materials to the current Bill says: “Transitional rules apply to transfer balance cap breaches of less than $100,000 that occur on 30 June 2017. Such breaches do not give rise to notional earnings or an excess transfer balance tax liability if they are rectified within 6 months.” The draft Bill only allowed 60 days.

The Bills were introduced, a second reading moved and then debate adjourned. After today, eight Parliamentary sitting days remain in this calendar year.

The Treasurer was asked if the Government was trying to avoid attention on the Bills by introducing them on the same day as the US election.

“No, not at all,” he answered.

“What I am endeavouring to do is to ensure the Senate has the opportunity by introducing it this week to have their Senate Inquiry and to have that resolved in good time for them to be able to consider the matter before the Parliament rises at the end of the year.”

Update: The Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 and Superannuation (Excess Transfer Balance Tax) Bill 2016 have been referred to a Senate committee. The committee is due to report by the 23rd of November, after which the Parliament is only scheduled to sit for five more days in 2016. The first scheduled sitting day of 2017 is the 7th of February.

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2 Replies to “Budget 2016 superannuation Bills introduced to Parliament”

  1. I noticed that the explanatory bill had a clause that seemed to suggest that there is also an additional caveat that imposed that any income taken out above $100,000 was also going to be subject to tax. Not sure if I read that correctly but that tosses out the whole idea of taking out cash is tax free after 60.

    I dont object to taxing , nor to the separation but have always felt that there were underlying rules that would pop up seeking to tax you… Interesting days and times ahead.

    1. There are some tax changes for defined benefit members to try and have the same outcome as the $1.6 million Transfer Balance Cap has on defined contribution members – which is most people. Is that what you are referring to? Per the explanatory memorandum:

      “In taxed defined benefit arrangements, half of the capped defined benefit income stream payments are included in the recipient’s assessable income and taxed at the individual’s marginal rates to the extent they exceed a defined benefit income cap of $100,000 (indexed).”

      More detail on this measure is included in this 2016 Budget fact sheet: Changes to defined benefit schemes

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