The Government’s changes to superannuation, many of which were announced in the 2016 Budget, have passed the Parliament.
The Parliament has passed the Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 and Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016, with the support of Labor. Labor and the Greens proposed amendments, though these were defeated.
The ‘Fair and Sustainable Superannuation’ package includes the superannuation measures announced in the 2016 Budget, subject to the changes of policy driven by the Coalition backbench. Some of these measures include:
- The Transfer Balance Cap, initially set at $1.6 million
- Lowering the concessional contributions cap
- Lowering the non-concessional contributions cap and restricting non-concessional contributions for people with high super balances
- Introducing the Low Income Super Tax Offset (LISTO), which replaces the LISC
- Making it easier for people to claim tax deductions for personal super contributions
- Carry forward rules for unused concessional contributions
- Changes to the tax offset for spouse contributions
- Removing the earnings tax exemption for assets supporting Transition to Retirement Income Streams (TRIS)
For more detail see: Superannuation changes in 2016.
The Statement of Compatibility with Objective of Superannuation says the Bill is compatible with the primary and subsidiary objectives of the superannuation system, though the Superannuation (Objective) Bill 2016 has yet to pass the Parliament.
The majority report of the Senate Standing Committee on Economics recommended passing the Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016. The Committee acknowledged the issues raised during the consultation process, but rejected the arguments.
“The committee acknowledges concerns raised by submitters in relation to the complexity of the proposed measures in the TLA Bill. However, the committee notes that significant reforms are, by nature, inherently complex, and is satisfied the government has carefully considered and allowed for this in its extensive policy development and consultation process,” said the report.
“A number of stakeholders raised concerns about the short timeframe provided for consideration of the draft legislation. However, Treasury has noted that ‘early passage of the legislation will provide individuals and industry with certainty and the maximum amount of time to implement the changes ahead of 1 July 2017’.”
Only seven days were allowed for public submissions to the Inquiry.
Labor issued a dissenting report, proposing amendments – including further lowering the non-concessional contributions cap and the Division 293 tax threshold – but supported the unamended Bill. The dissenting report said Labor would take their positions “to the next election”.