Government fails to advance its superannuation legislation in 2018

The Government has failed to substantially advance its superannuation legislation in 2018, potentially creating issues with the start dates for measures.

With Parliament now adjourned for 2018, the Government’s superannuation agenda is largely where it started the year – stalled before the Senate.

The Government did pass some superannuation-related legislation – it changed the rules around terminal medical conditions, created the Australian Financial Complaints Authority, and moved ASIC to a fee-for-service model. But the core superannuation Bills are still stalled.

The Government almost passed the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018, which includes potential jail sentences for employers who don’t pay their Super Guarantee entitlements, and expanding Single Touch Payroll to all employers, amongst other measures. However the Bill was amended in the Senate (relating to deductible gift recipients) and the House didn’t vote on these, government, amendments. So the Bill remains before the Parliament.

Other superannuation Bills before the Parliament are:

Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 – 2018 Budget measures
Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 – amnesty for employers underpaying Super Guarantee, among other measures
Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill 2017 – requiring at least one-third independent directors for large super funds
Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017 – MySuper reporting

Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017 Read more...

Three superannuation Bills up for debate in last sitting week of 2018

The Government, may, put three of its superannuation Bills up for debate in the Senate this week – the last sitting week for 2018. But it might not have the votes to pass the Bills, and is running out of time before some of the measures are meant to be in place.

Update: The Senate passed the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 on Wednesday, with amendments – meaning it will need to return to the House.

The Government appears to have narrowed its focus to three of its superannuation Bills:

These three Bills are included in the most recent Draft Legislation Programme for the Senate, though they were also on the Programme for last week and didn’t get to a vote. The last time the Bills were debated was in late June 2018.

The likely explanation for the delays is that the Government doesn’t have the votes to pass the Bills, at least at this stage or in this form. The Australian reports that Senator Fraser Anning plans to vote against the superannuation Bills.

Some of the measures in the Bills start on 1 July 2019, though arguably the most time-sensitive is the proposed 12 month amnesty for employers who haven’t paid Super Guarantee. As drafted, the amnesty would have started on 24 May 2018 if the Bill passes. If the Bill doesn’t pass this week there are only three Senate sitting days in February 2019, followed by more in April – though time to pass the amnesty Bill may be tight with the Budget on April 2, the need to pass supply Bills and the likely calling of a May election.

Assistant Treasurer has said the Government would be moving amendments to the three Bills in mid-November, though these amendments have yet to be published on the Parliament’s website. A revised Green’s amendment to the Protecting Your Superannuation Bill has been published.

In November the Government included six Bills on the Senate Programme – the other three Bills would expand Super Choice and close the Salary Sacrifice ‘loophole’, another would require large super funds to have at least one-third independent directors and the third would change MySuper reporting.

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Government narrows focus to three superannuation Bills

The Government has narrowed its focus to three superannuation Bills for this sitting week – the second last for 2018.

In the Senate-only sitting week earlier in November the Government put six superannuation Bills on the Programme for the Senate. However none reached a vote.

The Government has seemingly narrowed its focus to only three superannuation Bills for this sitting week, based on the current Draft Legislative Programme for the Senate:

Tuesday:

Wednesday:

Earlier in November Assistant Treasurer Stuart Robert announced that the Government intends to amend three of its superannuation Bills. If passed, the Protecting Your Superannuation Bill would be amended to retain opt-out insurance for young people in dangerous occupations, the Measures No. 1 Bill would be amended to add penalties for non-payment of Super Guarantee, and changes would be made to the new rules in the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017. However this third Bill is not included on the Programme for this week.

Also, none of the amendments have been published on the Parliamentary website, though at least some have reportedly been circulated to the cross bench.

The other Government superannuation Bills will likely remain stalled – none of them have been debated since June 2018, some much earlier. Measures in these stalled Bills include requiring at least one-third independent directors for large super funds, expanding super choice, closing the Salary Sacrifice ‘loophole’ and setting objectives for the superannuation system in legislation.

The Programme notes that it is “indicative” and subject to change – as was seen in the previous Senate sitting week.

Following this week only one sitting week remains in 2018. The 2019 sitting calendar has yet to be published.

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Government fails to get any of its superannuation legislation to a vote

The Government has failed to get a vote on any of its superannuation legislation this week.

Ahead of this week of Senate sittings the Government had put six of its superannuation Bills on the programme. By the start of the week the Government was talking about passing four of the Bills. On Wednesday Assistant Treasurer Stuart Robert announced amendments to three Bills – amendments which were reportedly circulated to the cross-bench, but have yet to be publicly released. Only the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 was put on the notice paper for Thursday, but it did not reach a vote.

None of the Government’s superannuation legislation has been debated any more recent than June, and in some cases it has been much longer. There are only two more sitting weeks scheduled in 2018.

The Bills the Government will try to amend include the Protecting Your Super Bill – which implements measures from the 2018 Budget, a Bill changing the rules for large super funds and another to create an amnesty for employers who haven’t paid their Super Guarantee obligations. Some of the measures in these Bills apply from 1 July 2019, while the SG amnesty applies – if the Bill passes – for the 12 months from 24 May 2018 (the day the Bill was introduced), meaning that almost half the period has passed without it being legislated.

The next sitting weeks starts 26 November.

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Government to move amendments to superannuation Bills in Senate

The Government will propose amendments to its own superannuation legislation, as it tries to get some of the measures through the Senate this week.

The Government planned to have the Senate debate as many as six of its superannuation Bills this week. Though none of the Bills came up for debate on Monday or Tuesday.

Related: Six superannuation Bills up for debate in Senate this week

Update: Government fails to get any of its superannuation legislation to a vote

On Wednesday, speaking at the Association of Superannuation Funds of Australia (ASFA) Conference in Adelaide, Assistant Treasurer Stuart Robert detailed some of the “practical amendments” the Government planned to make to the Bills.

Keeping insurance opt-out for young people in dangerous occupations

The Government will move an amendment to its Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 – which implements measures announced in the 2018/19 Budget, including making insurance opt-in for younger super fund members. The amendment will reverse this change – retaining opt-out – for young people in dangerous occupations.

“While the Senate Committee recommended the Bill be passed without amendment, the Government has heard from stakeholders that workers in dangerous occupations are likely to benefit from default insurance in superannuation, as they may face barriers to accessing insurance elsewhere,” said Robert.

“Therefore, the Government has decided to make available an exception to the opt‑in changes for new members in prescribed dangerous occupations, such as police officers, truck drivers, farmers or concreters, who are under 25 years old or have an active low balance account, where trustees elect to apply it.”

“In determining which occupations will be considered dangerous for the purpose of the exception, we will consider risks across all occupations, and will consult publicly, in the time available, on the exempt occupations,” said Robert, suggesting that the occupations will be set by regulation.

‘Stick’ added to ‘carrot’ of Super Guarantee amnesty

The Government will move to add a ‘stick’ to the ‘carrot’ of the amnesty for employers who haven’t paid their Super Guarantee obligations – in the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018, amongst other measures.

Robert said the amnesty is needed because the “ATO has not had good enough visibility over SG non-compliance in the past” – so the Government is extending Single Touch Payroll and increasing the frequency of fund reporting – “but the Government strongly believes employees with long-standing SG owed to them should not miss out”.

So far the Bill has been easy on employers – a change that could send employers to jail for not paying Super Guarantee is contained in a separate Bill. Robert told the conference that the amnesty Bill would be amended to increase penalties for SG non-compliance.

“The amnesty always had a carrot and stick approach. And our amendment makes for a much bigger stick. This amendment will ensure any employer who chooses not to come forward under the amnesty will face a minimum 100 per cent Part 7 penalty when they are caught.”

“This penalty is on top of their workers’ entitlements, and can be extended up to 200 per cent at the ATO’s discretion.”

“This amendment will ensure the ATO applies tough penalties when employers don’t take advantage of this chance at a clean slate and pay their workers what they are owed.”

Extending new MySuper rules to Choice products

The Government intends to amend the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017 to extend some of the rules in the Bill to Choice products, and clarify the operation of the Bill.

The ‘outcomes test’ in the Bill requires super fund trustees to assess if their superannuation product is promoting the financial interest of the members – including by assessing product features and comparing performance against other products. As originally drafted this would only apply to MySuper products, but the Government now wants it to also apply to Choice products.

“The Government has listened to industry concerns and in response we will amend the Bill to extend the outcomes test to choice products as well as MySuper products,” said Robert.

“Our amendment makes sure that trustees are considering the outcomes being provided to all members, including those with over $1 trillion in APRA-regulated assets outside of the MySuper sector.”

Labor have already proposed an amendment which would extend the obligations from just MySuper products to Choice products as well.

“We are also making a change in response to concerns around the consistency of disclosure. I want to put beyond doubt that the portfolio holdings disclosure applies to all choice products, even where there is a no investment option,” said Robert.

“I would like to make it clear that there was no carve-out for platform products in the original Bill, however this change will put any concerns to rest.”

Robert said the Government was planning to table the amendments, “as well as some other minor amendments”, on Wednesday.

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Six superannuation Bills up for debate in Senate this week

The Government plans to debate six of its superannuation Bills in the Senate this week – almost all its super-related Bills before Parliament.

The Government’s superannuation agenda has not been a priority recently, with none of the five Bills having been debated since June – which is before the most recent change of PM and ministerial reshuffle.

The Draft Legislation Programme for the Senate for this week has Bills up for the debate on the following days, though the Programme is generally only a guide at best:

Update (Wednesday 10:30am): The Senate didn’t debate any of the superannuation Bills on either Monday or Tuesday. Based on the Notice Paper and Order of Business it is likely none of the Bills will be debated on Wednesday either. Thursday is the last sitting day this week. The next sitting week starts November 26.

=&0=&Assistant Treasurer Stuart Robert has announced a series of amendments to the Government’s superannuation legislation, and says that there will be debate on the Bills either today or tomorrow.

Update (Thursday 12:45pm): There may be a vote today on the Protecting Your Superannuation Package Bill, though the Government’s amendments have yet to appear. It seems unlikely there will be votes on any other superannuation legislation.

Monday (12/11/2018)

Tuesday (13/11/2018)

Wednesday (14/11/2018)

Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017 – MySuper reporting

Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill 2017 Read more...

Superannuation Bills largely stalled in Senate ahead of winter break

With Parliament having risen for the long winter break many of the Government’s superannuation Bills remain stalled in the Senate, with some not even being debated yet in 2018

ASIC fee-for-service Bills

The Bills to change ASIC towards a fee-for-service model have passed the Parliament. In part the Bills will lead to increases in the fees for SMSF Auditors, in some cases substantial fees. The actual level of the fees will be set in regulation, which Minister for Revenue and Financial Services Kelly O’Dwyer said would be made “shortly”.

Protecting Your Superannuation package

The Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 caps some super fund fees, changes superannuation for some members to opt in and expands the inactive superannuation that can be collect by the ATO, which will get new powers to pay super it holds to the owner. The Bill has passed the House and been introduced to the Senate, but is subject to a Senate committee inquiry – with a reporting date of 20 August.

Super Choice / Salary Sacrifice ‘loophole’

The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017 – which expands super choice and closes the Salary Sacrifice ‘loophole’ – remains stalled. There were indications it was going to be debated in the Senate, but this didn’t eventuate. It was last debated in November 2017.

Superannuation Guarantee

The

Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 Read more...

Superannuation Bills start Parliamentary year stalled

Much of the Government’s superannuation agenda starts the Parliamentary year stalled in the Senate.

The Government currently has five superannuation Bills before the Parliament. The Government gave three of the four Bills in the Senate priority for debate in the final sitting week of 2017, only to delay when it became clear they didn’t have the votes. At the time Minister for Revenue and Financial Services, Kelly O’Dwyer, said the Bills were “certainly not dead”.

The fourth Bill is the Superannuation (Objective) Bill 2016, which sets an objective for superannuation in legislation. It was last debated in late 2016.

Some of the measures, such as closing the salary sacrifice Superannuation Guarantee ‘loophole’, have wide support. But this measure is bundled in a Bill with changes to choice of super fund. Though the Government appears confident of passing the Bill, based on recent draft legislation.

None of the Bills in the Senate are listed for debate in the first sitting week of 2018 (February 5-8) in the Draft Legislation Programme for the Senate.

The Government has also been consulting on several pieces of legislation to be introduced to Parliament in 2018:

There may also be changes made to the rules for early release of superannuation, consultation on which is currently underway.

The Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Bill 2017 – which creates AFCA, replacing in part the Superannuation Complaints Tribunal – is set for debate in the House on Thursday. The Bill has already passed the Senate – it was introduced there first – with amendment.

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MySuper transfer CGT relief Bill to be introduced to Parliament

The Government plans to introduce legislation to Parliament to provide CGT relief where superannuation balances are transferred within a fund into a MySuper product.

The Treasury Laws Amendment (2017 Measures No. 4) Bill is planned to be introduced in the winter sitting of Parliament, which starts today. The Bill will “provide a Capital Gains Tax rollover where a superannuation fund transfers the balances of members from default superannuation funds to MySuper compliant funds, and the assets which support those balances,” according to the Legislation proposed for introduction in the 2017 Winter sittings document. It will also “address existing integrity issues that will be exacerbated by the superannuation reform measures”.

These measures were originally announced in June 2015, by the, then, Assistant Treasurer Josh Frydenberg.

“Super funds are required to transfer the existing balances of super fund members who are in default products to a MySuper product by 1 July 2017. MySuper products provide a simple, cost effective default superannuation product,” he said.

“Tax relief is currently provided for these transfers into a different super fund, but not for transfers within the same fund structure. As a result, default members of some super funds may incur adverse and unintended consequences when their account balances are transferred.”

“From today, super funds that transfer their default members’ balances to a MySuper product within their fund structure will also be able to access this tax relief.”

The only other superannuation legislation listed for introduction in the winter sitting is the Public Sector (Superannuation) Laws Amendment Bill, which makes “miscellaneous reforms to the superannuation arrangements for Commonwealth employees, judges and parliamentarians”.

Not listed for re-introduction is the superannuation legislation – including to expand super choice and make changes to super fund governance – which lapsed ahead of the double dissolution election. These measures are still, seemingly, Government policy.

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This article, as with all content on this site, is for informational purposes only, and is not legal, financial, tax or other advice. Please read our Terms and Conditions of Use.