Luke Smith Submissions
This is a submission I made to the Treasury consultation on the final report of the Financial System Inquiry.
Thank you for the opportunity to make a submission in response to the final report of the Financial System Inquiry (FSI).
This is a submission to the recent Treasury department consultation process on reforming the excess non-concessional contributions tax.
Thank you for the opportunity to make a submission in regards to the exposure draft Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014. This submission will address three concerns relating to the exposure draft:
- Use of the General Interest Charge for calculating associated earnings
- Potential for tax advantages to be gained under the new rules
- SMSFs and the time allowed to respond to a release authority
The treasury department recently conducted a consultation process into options to improve the regulation of retirement income streams, called the Review of Retirement Income Stream Regulation. This is a submission to that review, covering the regulation of account-based income streams and how they relate to SMSFs.
Submission: Review of retirement income stream regulation
Thank you for the opportunity to make a submission in regards to the regulation of retirement income streams. This submission is focused on the minimum drawdown requirements of account-based pensions, particularly questions twelve through sixteen of the discussion paper and the implications for SMSFs.
This submission will focus on three questions raised by the Financial System Inquiry interim report:
- Restoring “the general prohibition on direct leverage of superannuation funds on a prospective basis”
- “To what extent should the Inquiry be concerned about the high operating expenses of many SMSFs?”
- “Should there be any limitations on the establishment of SMSFs?”
Leverage in superannuation funds
Given that the Financial System Inquiry (FSI) interim report notes “leverage in APRA-regulated funds is small, with total borrowings of under $2 million reported each quarter over the past year” this submission will be limited to consideration of borrowing by SMSFs.
Borrowing by SMSFs has been a growing and changing area, which has also caused concern in some sectors. This includes the Super System Review (Cooper Review) panel, which recommended that a review of SMSF borrowing be conducted within two years – which would have been by 2012:
“The 2007 relaxation of the borrowing provisions and the consumer protection measures that have recently been announced should be reviewed by government in two years’ time to ensure that borrowing has not become, and does not look like becoming, a significant focus of superannuation funds.”