Meg's Musings - February 2025

It’s way too late to wish anyone a Happy New Year but welcome to our first edition of Heffron Highlights for 2025. 

I’m not much for New Year’s resolutions myself but I do perhaps have a New Year’s wish. Parliament will be returning this week and the Division 296 tax bill has been tabled for debate in the Senate (its last hurdle) on Thursday. I’m desperately hoping that common sense will prevail and this measure ends up being scrapped.  

It’s an interesting insight into the quality of our debate these days that it seems anyone arguing against Division 296 is presented as “digging in for long lunches and bosses”. In contrast to the good guys (pro Division 296) who are for “cost of living help and strengthening Medicare”.  (I’m quoting the Treasurer here – when defending his ongoing commitment to Division 296 despite loud opposition from all directions.)  

I wonder if we risk losing the art of holding multiple thoughts at once if we take that simple view of the world. For example, many people against Division 296 (including me) would say: “1. We need to collect more tax to fund a lot of very important things that are critical for our society. 2. We could do that by reigning in the super tax concessions and 3. Division 296 is a terrible way to do that.” 

There are better methods to reduce super tax concessions for those with very high balances. Some that might even be more palatable to the people impacted and actually (eventually) collect more tax. Let’s explore them. 

And while we’re at it let’s be truly honest about why we’ve ended up here.  Collecting any tax in an equitable way involves some complexity. The Government is unwilling to take on the challenge of complexity in order to be fair, preferring instead to hope that no-one will notice the really bad design of Division 296 because it’s easy to hate rich people. 

The one thing I’ll regret if Division 296 tax doesn’t get introduced is that we’ve already written that module for our next Super Extension course – Fund & Other Taxes. Lyn Formica and I will release this topic in the next few months as we continue to build out our Super Extension course. It’s exciting to see it come together even if there is one module we’re hoping to have to throw away. 

Over the Christmas break we also released the second in our Super Specialist series – Benefits. It’s probably even more relevant these days as it includes an entire module on how Market Linked (or Term Allocated) Pensions work. This will be an invaluable resource for anyone weighing up whether they use the legacy pension amnesty to wind one up! We touched on just some of the issues in one of our recent blogs.

I hope to see many of you at the SMSF Association National Conference in Melbourne in a few weeks (get your tickets if you haven’t already). Lyn will be running a great workshop on NALI / NALE on Wednesday 19th February. I’ll be joining the Thought Leadership Breakfast on Wednesday morning and presenting my usual Strategic Update on Thursday. We’ll also have a stand – please pop by and say hi if you’re at the conference. 

Here's to a great 2025.