It’s been a busy week or two in superannuation. The Government’s announcements around increasing taxes for those with more than $3m in super have certainly caused a stir. If you missed our update on the detail we have so far, you can find it here.
Of course, there is no legislation yet and things may change a lot between now and when the measure is due to start (there’s an election in the meantime). But if I had to place a bet, I would say that “something” like this will be in place from 1 July 2025 or shortly afterwards. There are some issues around the mechanics that I hope will change (for example, there has been much commentary – including ours – questioning the fact that the measure will indirectly tax a portion of impacted members’ unrealised capital gains).
But fundamentally I expect the tax settings for larger balances will be re-set. And to be honest, many people with larger balances would probably accept some change – I often talk to clients who are slightly bemused that they pay so little tax on their super. (And many of them remember the super system before 2007 when pension payments were taxed, “reasonable benefit limits” capped tax concessions on large balances etc.) What’s still important in my view is that the changes are made in a way that is sensible and fair – which is where the taxation of unrealised gains invites so much heat. It remains to be seen whether we’ll get there but I’m always optimistic that we can.
Looking ahead, I think we can expect more on super in the Federal Budget in May. I definitely won’t be planning an early night! We’ll keep you up to date as things emerge.
For those of you marking International Women’s Day today – I hope you’ve enjoyed the day. I’m always a little awkward about it myself – as a female Managing Director, with 70% women on my leadership team, roughly mirroring the rest of our business and 2 out of 3 female directors – sometimes I feel the men at Heffron need their own day as well. Fortunately, they are a wonderful bunch and are incredibly supportive of the amazing women with whom they work.