Advocacy and Media

22 March 2024
IFPA slams retrospective CSLR levy

The Institute of Financial Professionals Australia (IFPA) is deeply concerned about the retrospective aspect of the CSLR levy and the cost advisers will have to pay to fund the operation of the CSLR.

You can read our recommendations to the government here.

26 February 2024
Our submission to the inquiry into Division 296 – Senate inquiry

On 23/2/24, we provided our submission intoTreasury Laws Amendment (Better targeted Superannuation Concessions and Other Measures) Bill 2023.This Bill has been referred to the Senate Economics Legislation Committee with the report due on 19 April 2024. In our submission, we restated our case that Division 296 must not be legislated in its current form as other solutions exist to ensure a fairer and equitable superannuation system for all Australians.

Further details regarding our suggestions can be found in our submission and media release.

9 February 2024
Our submission on objective of super – Senate inquiry

9 February 2024
Our submission on retirement phase of super

25 January 2024
2024-25 Pre-Budget submission

On 25 January 2024, the Institute of Financial Professionals Australia submitted its 2024-25 Pre-Budget submission on tax, superannuation and financial services matters. In brief, we are calling on the Federal Government to review the tax and superannuation system. We believe the tax system is no longer fit for purpose and also believe there are a number of areas of the superannuation system that should also be reviewed given some measures have not been reviewed since inception and therefore no longer meet the needs of modern society. Our Pre-Budget submission sets out 10 tax related recommendations along with 16 superannuation and financial services proposals that could lead to a simpler, fairer and more equitable system for all Australians.

Further details regarding our recommendations can be found in our submission and media release.

Senate Economics Legislation Committee public hearing on NALE
On Monday 13 November 2023, our association was invited to appear before the Senate Economics Legislation Committee’s public hearing as part of its inquiry into Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. Schedule 7 of the Bill which relates to changes to the non-arm’s length expense (NALE) rules was discussed. In brief, it was put forward to the government that the proposed legislation be withdrawn and the NALE and non-arm’s length income (NALI) rules be remedied as proposed by the industry groups.

You can read our supplementary submission here. 

On 3/11/2023, we provided our submission on the payday super regime. In brief, we support the change for employers to pay SG contributions at the same time they pay salary and wages and have proposed a ‘pay date’ regime that is similar to the ‘employer payment model’ as outlined in the consultation paper, however, a number of key differences/features exist.

A summary of our payday super model - key recommendations:

1. Move to a ‘pay date’ (ie, payment date) model for SG contributions rather than a ‘due date’ (ie, receipt date) model
   
   
2. Introduce a fairer and proportionate graduated penalty regime that will be lenient on accidental or inadvertent non-paying employers and harsh on deliberate non-paying employers
   
   
3. Employers who make late SG contributions would pay interest on the late payments rather than the current system of receiving a SG charge assessment
   
   
4. Late payments and interest would be deductible (currently they are not deductible)
   
   
5. Non-payers would continue to receive SG charge assessments as is the case under the current system
   
   
6. Superannuation clearing houses should be regulated so they are obligated to remit SG contributions on time under the pay date model
   
   
7. Micro businesses to be exempt from the payday super regime and remain as quarterly SG contributors.

Further details regarding our recommendations can be found in our submission  and media release .

The Institute of Financial Professionals Australia welcomes the opportunity to provide this submission on the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023. Our submission is confined to Schedule 7 of the Bill which makes changes to the non-arm’s length expenses (NALE) rules that relate to superannuation funds.

Read our full submission and media release.

Our submission on the NALE rules for super funds
On 7 July 2023, the Institute of Financial Professionals Australia (IFPA) provided its submission on the non-arm’s length expense (NALE) rules for superannuation funds. Although the proposed legislative changes to the NALE rules are an improvement to the initial proposal to tax NALE at a rate of 225% (ie, a five times multiple), we continue to oppose the concept of a multiple. We believe that a two times multiple approach which leads to an effective tax rate of 90% is not the correct way to deal with a general expense breach. Our view is that other changes should be made to the law to deal with non-arm’s length dealings.

Our submission and proposed range of alternative measures can be read here:
Submission    
Media Release  

Sladen Snippet - Treasury Releases Proposed NALE Changes
Treasury has released proposed legislative changes  to the non-arm’s length expenses (NALE) rules. While they are not as bad as the initial proposal to tax NALE at a rate of 225%, they are still not ideal. 

Under the proposed changes self managed superannuation funds (SMSFs) and small-APRA super funds (SAFs) will be taxed on general expense NALE on a 2 x multiple (ie an effective tax rate of 95%) on the undercharging/non-charging amounts of NALE.  Large APRA superannuation funds will be exempted from the NALE regime (for both general expense and specific expense NALE). SMSFs and SAFs will continue to pay a full 45% tax rate on specific expense NALE, while all superannuation funds will continue to pay full 45% rate on “normal” non-arm’s length income (NALI). 

There are many issues with the proposals and, no doubt, industry bodies will continue to push back against these unnecessary and disproportionate measures. For example see some of the following prior industry submissions:

• Institute of Financial Professionals Australia submission
• Joint bodies submission
• Joint bodies press release  

To discuss this further or for more information please contact:

Phil Broderick
Principal
Sladen Legal
T +61 3 9611 0163  l M +61 419 512 801   
E [email protected]      

Read the media release here .

In its 2023-24 Budget submission, the Institute of Financial Professionals Australia, has urged the government to address underlying structural Budget weaknesses by going beyond incremental change and undertaking comprehensive tax reform.

Read the full submission  and media release .

On 17 April 2023, the Institute of Financial Professionals Australia (IFPA) provided its submission on the proposed extra 15% tax on total superannuation balances above $3m. We do not believe that the government’s extra 15% tax proposal is the correct way to make the superannuation system fair and equitable for all Australians. If the tax settings must change for larger balances, we believe there are other options that can deliver a fairer superannuation system for all Australians. The obvious approach is for the extra 15% tax to be applied to actual taxable income (not unrealised gains). However, if the government retains its proposed measure, we strongly recommend changes are made to make the proposal equitable and fair.

Read the full submission and media release.

On 31 March 2023 the Institute of Financial Professionals (IFPA) continued to raise its concerns regarding the proposed changes to the Tax Agent Services Act 2009 contained in the Treasury Laws Amendment (2023 Measures No.1) Bill 2023 (see also IFPA’s submission on 11 December 2022 hyperlink). IFPA, together with other external professional association members of the Tax Practitioners Board (TPB) Consultative Forum, made a submission to Senator Jess Walsh, Chair, Senate Standing Committees on Economics.

To read the full submission please see attached.

The Institute of Financial Professionals Australia along with two other associations wrote to Treasury on legislating the objective of superannuation. The Joint Bodies do not support the government’s proposed objective or the need to legislate it.

The Joint Bodies making this request were:

• Chartered Accountants Australia & New Zealand
• Institute of Financial Professionals Australia
• Institute of Public Accountants

To read the full submission please see attached.

The Institute of Financial Professionals Australia along with six other associations wrote to Minister, the Hon Stephen Jones MP, seeking urgent amendment to the superannuation non-arm’s length income (NALI) provisions.

The Joint Bodies making this request were:

• Chartered Accountants Australia & New Zealand
• CPA Australia
• Institute of Financial Professionals Australia
• Institute of Public Accountants
• National Tax and Accountants Association
• SMSF Association
• The Tax Institute

To read the full submission and the joint media statement, please see attached.

Full submission
Joint media statement

 .pdf

On 5 October 2022 Tax & Super Australia wrote to The Honourable Dr Jim Chalmers MP Treasurer regarding the 2022-23 pre-budget income tax matters noting that our members have an ongoing interest in the effective functioning of Australia’s tax system and that the pre-budget submission was being made by TSA on behalf of those interests.

Please find the full submission attached.

On 30 September 2022, Tax & Super Australia as an advocate for our members and the tax industry made a submission to Treasury in respect of exposure draft legislation released on 9 September 2022 intended to simplify fringe benefits tax record keeping requirements.

For further information please see attached.

The ATO has released a paper with five additional examples which they propose to include in the green zone. The situations covered by these examples include where:

• a loss trust or company beneficiary(s) are presently entitled to trust income and those beneficiaries are members of the same family group (as defined in the tax law) as the distributing trust. Where there is a loss beneficiary(s), it must continue to be solvent, particularly if the loss beneficiary(s) use the trust entitlement to fund an equity distribution
• there is a time lag between when a beneficiary becomes entitled to trust income and that entitlement being satisfied – this is provided the lag does not exceed two years
• there is a testamentary trust that is maintained for the benefit of an individual where the trustee reinvests income to which the individual is presently entitled, and
• there is a business carried on by a trust where two generations of the same family manage that business.

Feedback is requested by 4 October 2022 and can be submitted by contacting Tax & Super Australia’s member services team on 03 8851 4555 9am - 5pm (AEST) Monday to Friday (excl. Public Holidays) or by emailing [email protected].

Example 1- Distributions involving a trustee undertaking a farming business
Example 2- Distributions to a loss company
Example 3- Time lag between a beneficiary becoming entitled and that entitlement being satisfied
Example 4- Time lag between a loss trustee beneficiary becoming entitled and that entitlement being satisfied
Example 5- Testamentary Trust

Tax and Super Australia believe there are number of measures that can be introduced by the Government that will reduce red tape and help stimulate economic activity. We also believe there are number of bigger picture issues in the superannuation system that should be reviewed. There are many recommendations in our pre-budget submission, which can be read in the attached document.

Members have been raising questions about the options available in relation to 2021-22 trust distributions and respective resolutions in respect of adult beneficiaries, having regard to the draft guidance material released on 23 February 2022 by the Australian Taxation Office (ATO), (Draft Taxation Ruling TR 2022/D1, PCG 2022/D1 and Draft Taxation Determination TD 2022/D1- the ‘February Draft Guidance’) and the subsequent pronouncements made by both the government and the ATO.

For further information please see attached.

On 3 June 2022 Tax & Super Australia wrote to the Treasurer, The Honourable Jim Chalmers MP, making note of the political, fiscal and social challenges the incoming government will need to consider in reforming tax and superannuation legislation that is a fundamental part of the economic and financial position of Australians and making a submission which is inclusive of a menu of tax and superannuation measures that require attention in the short-term, noting that there are a range of long-term, bigger picture issues that also need to be addressed (e.g. the expansion of the GST, a streamlining of the FBT regime, the simplification of the employee/contractor distinction, and reform in the taxation of closely held trusts).
For further information please see attached.

Further to our submission made dated 18 February 2022, on the 11 April 2022 Tax and Super Australia as an advocate for our members and the tax and superannuation industry, made a submission to the Office of the Chief Tax Counsel in respect of Section 100A regarding the draft Taxation Ruling – TR 2022/D1(‘the draft ruling’) issued on 23 February 2022 and in respect of the Commissioner’s (the Commissioner) opinion with regard to the application of section 100A ( Section 100A) of the Income Tax Assessment Act 1936 (ITAA 1936).
For further information please see attached.

On behalf of Tax and Super Australia (TSA) and its members, and further to our submission made dated 18 February 2022 in respect of Section 100A, TSA has advocated for the industry in respect of the draft PCG and the Commissioner of Taxation’s (the Commissioner) opinion with regard to the application of section 100A of the Income Tax Assessment Act 1936 (Section 100A).
For further information please see attached.

Joint submission on superannuation non-arm’s length income rules
Tax and Super Australia is part of a larger industry group (The Joint Bodies) which is in ongoing consultation with the ATO and Treasury. The Joint Bodies wrote to Senator Jane Hume, Minister for Superannuation, Financial Services and the Digital Economy in early September 2021 seeking urgent amendment to the superannuation non-arm’s length income (NALI) provisions.

One of the main aims of this larger working group is to remove unintended NALI provisions. Rather than NALI applying blanketly to all income tainted by non-arm’s length dealings, The Joint Bodies believe that NALI should apply proportionately.

The Joint Bodies making this request were:
• Chartered Accountants Australia & New Zealand
• CPA Australia
• Institute of Public Accountants
• The Tax Institute
• Australian Superannuation Funds Association
• SMSF Association
• National Tax and Accountants Association
• Self-Managed Independent Superannuation Funds Association
• Financial Planning Association of Australia
• Tax & Super Australia
• Actuaries Institute