Wednesday, April 19, 2023

‘Grossly unfair’: Self Managed Super Fund Association wants tax proposal ditched

This would effectively be a wealth tax. Interesting that it hits super funds only. People who manage their own money (with or without advice) would not be affected. Once again it is lower income earners who would get hit. I have never liked super and the fees you have to pay for it. I have always made my own decisions. So I will not be affected

The Self Managed Super Fund Association has called on the federal government to drop its proposal to tax unrealised gains by super funds larger than $3m, describing the approach as “grossly unfair.”

“Our members are very concerned at being taxed on unrealised gains,” SMSF Association chief executive, Peter Burgess, told The Australian.

“It is grossly unfair that self managed super fund members who have balances over $3m are being asked to pay tax on unrealised gains.”

The association has expressed its views in a submission to the federal government this week on the proposal to double the tax from 15 per cent to 30 per cent on earnings from superannuation balances of $3m or more from July 1, 2025.

Concern is rising at the proposal among small business and farmers groups at the government’s plan to move into unprecedented waters in tax policy in Australia, by seeking to levy taxes on unrealised gains — a move which could pave the way for it being applied to other sectors such as shares and properties, if it is given the go ahead with regards to superannuation.

The proposed higher tax rate of 30 per cent will be levied on the increase in the total superannuation fund balance over $3m over the year, and not the actual earnings of the fund from dividends and asset sales as is the case with the tax system.

The federal government has estimated that the proposal could bring in an extra $2bn a year in the first full year it is in operation.

The new tax on superannuation was announced this year by the Treasurer Jim Chalmers despite an assurance from then Opposition leader, Anthony Albanese, before last year’s election that his party had no plans at the time to introduce new taxes on superannuation.

Submissions on the proposal, including the radical new approach to levying the higher tax rate on unrealised gains, closed this week.

Mr Burgess said some 75 per cent of the people who would be affected by the changes were those with self managed super funds.

He said the approach of levying tax on unrealised gains “could cause some significant liquidity issues” for super funds.

He said people who owned properties, including farms and business premises, through their superannuation funds were now realising the impact of the proposal if their properties or funds were worth more than $3m.

Some could be forced to sell property or farms if their value rose during the year.

Mr Burgess said the Treasury’s argument for using the much broader base of unrealised gains, rather than realised gains which is the basis for all other tax policy, was that it was much simpler to calculate the increase in value of a fund than to calculate total realised returns for the amounts over $3m.

He said the association had been told that some large super funds did not have the capacity to calculate the earnings attributable to specific member funds over $3m.

But he said other large funds did have that capacity and all self managed super funds could also do it.

He said it was unfair to penalise people with self managed super funds because of the problems of a much smaller number of people who had balances of over $3m in APRA regulated super funds.

He said the association was calling on the federal government to drop the approach of levying the tax on unrealised gains altogether because of its unfairness.

If this was a problem for some large super funds, he said funds should be given the option on which method to use – either the increase in the total super balance or the actual realised gains during the year.

“It seems that we are designing an approach to taxation based on a very small number of people (who have balances over $3m and the funds can’t identify the earnings by member.)

Mr Burgess said the association intended to “come out swinging” in expressing its concerns about the unfair impact of taxing unrealised gains on people with self managed super funds.

“The taxing of unrealised gains is unprecedented in Australia as a method of raising tax,” HLB Mann Judd’s director of superannuation, Andrew Yee, told The Australian.

“The new tax is asset based rather than the traditional model of taxing of income and this has created the most controversy,” he said.

“It is not fair in terms of it only being applied to individuals with a large amount of superannuation assets with the majority of those assets being held in self managed super funds.”

“This taxing model is not being applied to any other individuals or other taxing entities.

“This form of taxing could be applied to other assets in the future,” he said.

Mr Yee said his superannuation clients who were affected were dealing with “the initial shock of an extra tax on super” and were now awaiting the details.

“Those clients that are considering planning for the new tax are thinking of reducing their potential exposure to the tax by moving super assets to non-super entities, or by no longer growing their super benefits by reducing or not maximising contributions,” he said.

He said the clients most worried about the new tax were those people who had built up large super balances over many years, the majority of whom are now in retirement phase drawing out a pension.

“Those clients with a significant portion of the SMSF in property assets (for example an office block or commercial building which is related or leased to the family business) are concerned about the tax and having to consider whether to unwind these holdings and the consequences of doing so,” he said.


‘Dramatic increase’ in false Aboriginality claims: Jacinta Nampijinpa Price

Jacinta Nampijinpa Price has used her first day in shadow cabinet to kickstart a new battle over Aboriginality, warning the newly legislated South Australian voice will trigger a “dramatic increase” in people falsely claiming to be Indigenous, as she leads the ­Coalition’s No campaign and is charged with delivering better outcomes for Aboriginal and Torres Strait Islander people.

Peter Dutton catapulted the Country Liberal Party senator, who is one of the most outspoken campaigners against the Albanese government’s preferred model for the voice, into his shadow cabinet on Tuesday, in a wider than expected reshuffle.

The Opposition Leader also lost his second frontbencher in two weeks when Queensland MP Karen Andrews called time on her political career, saying she would move to the backbench and not contest the next election.

Ms Andrews said her decision was made a couple of weeks ago and had nothing to do with the Liberals’ position on the voice, which led NSW MP Julian Leeser to quit the frontbench last week.

Mr Leeser’s resignation forced Mr Dutton to conduct the reshuffle, which appeared to appease Liberal MPs who agreed Senator Price – who has been in federal parliament for less than a year and is a former Alice Springs deputy mayor – was the right person for the Indigenous Australians portfolio and to fight the government on the voice.

But her appointment was not without controversy. Thomas Mayo, a member of the government’s referendum working group and Yes campaigner, said it was a “massive contradiction”.

“It’s great to see Indigenous voices being elevated but, also, she is a politician and we are working on something that’s about community. She is the ­Coalition’s new ‘Canberra voice’ in parliament, opposing an Aboriginal and Torres Strait Islander voice to parliament,” he said.

West Australian senator Michaelia Cash, who already holds the opposition’s employment and workplace relations portfolios, also becomes opposition spokeswoman for legal ­affairs, while South Australian senator Kerrynne Liddle has been promoted to the outer ministry as opposition child protection and prevention of family violence spokeswoman.

Victorian senator James Paterson, considered a rising star in the Liberal Party, has been promoted from the ministry into the shadow cabinet as the new home affairs spokesman. He keeps his existing responsibility as cyber ­security spokesman.

The makeup of the new ministry means the Nationals, whose partyroom Senator Price sits in, are overrepresented with seven shadow cabinet ministers while the Liberals have 17. The Nationals make up nearly a quarter of the Coalition partyroom.

Senator Price said Indigenous leaders in remote communities “don’t have any idea” what Anthony Albanese was proposing for the voice or Yes campaign and didn’t believe they would be represented by “yet another model that they see as being run by those who have had long held positions within the Aboriginal industry”.

In her first press conference as the opposition’s Indigenous Australians spokeswoman, she said there were lessons to be learned from the South Australian voice and claimed it had been left open for individuals to sign statutory declarations to say they were ­Indigenous.

SA premier Peter Malinauskas last month said on the ABC’s Q+A program a person would have to declare through a statutory declaration they were Indigenous to be able to elect voice representatives, calling it “democracy at its best”. He expected South Australians would tell the truth.

Senator Price said it was an “utterly ridiculous” and “deeply concerning” prospect.

“Another matter that is of great concern, which has been talked about by a lot of Indigenous people around the country, are those who claim to be Indigenous who aren’t necessarily Indigenous,” she said on Tuesday.

“You will see in South Australia a dramatic increase in the number of Indigenous people within its population no doubt because of that particular model.”

The SA government was approached for comment.

Under SA’s voice, a person who wants to be elected is taken to be Indigenous if they are of ­Aboriginal or Torres Strait Islander descent, regard themselves as Aboriginal or Torres Strait Islander and they are accepted as an Aboriginal or Torres Strait Islander person by the relevant community.

A person will be deemed to be of Aboriginal or Torres Strait Islander descent if they are biologically descended from the people who inhabited Australia or the Torres Strait Islands before European settlement.

Mr Dutton said a big part of his decision to promote senators Price and Liddle – two Indigenous women with deep links to Alice Springs – was to address youth crime and the sexual abuse of Aboriginal children in the town, and the Northern Territory broadly.

“We want to provide a brighter future for those kids,” he said. “We can’t have a situation where we have young children being sexually abused, the impact psychologically on them, the difficulties it creates within a home environment.

“As we know, in Alice Springs at the moment, there are very significant issues. And I just think ­instead of running off on red herrings and trying to create these distractions, if the Prime Minister doesn’t understand that there’s a problem in Alice Springs, then he should fly there tomorrow.”

Senator Liddle has personal experience in her new portfolios, after losing a sister to family violence and caring for two children who were wards of the state.

She said she was a “huge advocate” for prevention of domestic and family violence and would prioritise holding the government to account over its 10-year national plan to end the scourge against women and children.

The South Australian, who was born and raised in Alice Springs, urged the government to clarify what funding would be available to domestic and family violence legal services in the NT to deal with “horrific” circumstances in the next financial year.

“I understand, unfortunately, the devastating impact of not just ongoing trauma but when there’s loss of life, the impact on family members and loved ones when that occurs,” Senator Liddle told The Australian


Australia swamped with asylum claims as would-be refugees fly in and fight to stay here

The monthly number of people attempting to stay in Australia by claiming to be refugees despite having arrived by plane on student, work, or holiday visas has nearly doubled since last year.

The growing number of applications is flooding courts and tribunals with applications that are found to be bogus more than 85 per cent of the time, The Daily Telegraph can reveal.

Yet despite Department of Home Affairs figures showing that there are now nearly 102,000 people awaiting either deportation or a ruling on their refugee status, the government only managed to kick out 14 failed asylum seekers in March, with eight of those leaving the country voluntarily.

According to the latest Home Affairs report on asylum claims, 1,786 people who had arrived by plane on other visas as students, tourists, or workers later applied for onsore protection visas in March, 2023.

This was nearly double the 938 such claims made in the same period the previous year.

The greatest number of claimants in March came from India (190), followed by mainland China (158), Vietnam (117), and Malaysia and Pakistan (88 each).

By far the largest demographic category was males aged 25-34, with 404 claims made by this group.

Some 53 Ukrainians also claimed asylum, likely seeking protection from Vladimir Putin’s ongoing invasion of their homeland.

Plane speaking

1786: Asylum seeker claims made by people who arrived by plane in March 2023

938: Claims in March 2022

14,645: Claims since Labor took office

85+%: Rejection rate, June-December 2022

14: Total deportations of rejected claimants, March 2023

Top countries for claims: India, China, Vietnam, Malaysia, Pakistan

Home Affairs figures also show that 14,645 jet arrivals have claimed asylum since Labor took office last May.

In June, 2022, 1,040 people claimed to be refugees, but in just six months that figure had jumped to 1,633 per month.

While the number of claimants has increased, data released by Home Affairs in response to Senate committee hearings also showed that the percentage of applicants receiving permanent protection visas granted to refugee claimants has been climbing.

In 2022, 14.2 per cent of those claiming refugee status had their applications upheld, up from 11.2 per cent the previous year.

However, that 14.2 per cent represented just 995 claims, or a tiny fraction of the cases awaiting determination, leaving thousands more cases clogging up the legal system.

Individuals familiar with the process say that claims of persecution are often used by people trying to stay in the country and their cases can take years as they work their way through the process.

The Department of Home Affairs noted in its 2022 annual report that a “proportion” of applicants claim refugee status out of “genuine fear”, many apply for another purpose including “to prolong their stay to access the Australian labour market.”

In March, the Administrative Appeals Tribunal ruled on the case of an individual living in Parramatta known only as AYT22 who arrived in Australia in 2008 from India on a student visa and made a claim for refugee status in 2016 on the basis that he was a practising Christian who feared persecution if he returned home.

The Tribunal rejected the man’s claims of persecution, as well as his claims that he would “face economic difficulties” if forced to return to India, but it is understood he is now appealing to stay in the federal court.

Home Affairs documents show that Indians have among the lowest “grant rates” of protection visas, with just 1.74 per cent of claimants from that country having their applications approved last month.

By contrast, all six Afghanis who had their claims decided in March received protection visas.

“Since Labor was elected 14,645 asylum seekers have arrived by plane and Labor have no plan to deal with this problem,” said shadow immigration minister Dan Tehan, who added that Labor had campaigned hard on the issue of asylum seekers arriving by plane but had done little about the problem.

“There are now more than 101,000 asylum seekers who arrived by plane in Australia. In opposition, Labor said the government needed to address asylum seekers arriving by plane so where is their plan?”

“Labor were happy to use asylum seekers to score points against the Coalition but their lack of action in government demonstrates they never really cared,” he said.


Why we’ll be poorer for voting yes for Voice

Mike O'Connor

Mother always told us to say “please” when asking for something, but if the members of our political class were given similar advice by their respective mothers then they appear to have forgotten it.

I’ve yet to hear anyone ask voters if they would please, when they have a moment, consider both sides of the argument surrounding the proposed Indigenous Voice to parliament.

Instead of a respectful, reasoned approach, there is an ever-increasing volume of rhetoric demanding that we just do as we are told and accept it that now verges on bullying.

We once regarded individualism and a healthy suspicion of authority as elements of our national psyche.

But the vote Yes camp has obviously decided that these qualities have become so diluted that we can now be herded into a passive approval of something we don’t understand for no other reason than that’s what the government wants us to do.

Increasingly, I feel that I’m being pushed into voting Yes rather than being asked to consider the proposal.

The same mother who taught me to say “please” also despaired of that part of my make-up that ensured that if someone tried to force me to follow a particular course, I would invariably do the opposite.

I feel the same urge now and the more Prime Minister Anthony Albanese and the Yes camp try to pressure me in their direction then the more I will push back against them.

I resent the fact that corporations and sporting figures and a grab-bag of what are known collectively as “celebrities” are being conscripted to promote the Yes cause.

How they came to be possessed of the absolute wisdom that empowers them to comprehend something that has not and will not have its powers and reach comprehensively defined remains a mystery.

I have met many celebrities in my career and can say with absolute confidence that to a profoundly worrying degree, many did not appear to possess anything approaching a reasonable level of human intelligence.

Are we thought to be so stupid and so easily led that we will accept that the ability, finely honed though it might be, to repeatedly catch or hit a ball makes that person an expert in constitutional law?

If you were thinking of buying a house, would you show the contract to a cricketer or maybe a rugby league player and get them to run their eye over it before you signed it?

If you answered “yes” to this question, stop reading immediately and google “Brisbane lawyers”.

If the Voice is such a good idea then why the hard sell?

Those who dare to question what they are being told by the government, which is essentially “trust us, we’re politicians, we know what we’re doing” are being denigrated in the most appalling fashion.

There are so many unanswered questions and claims and counter claims being made by highly qualified legal persons, some of whom have no partisan view but who are concerned at the damage which could be wrought on the workings of our government that it is difficult to see how anyone can embrace it with any confidence.

Never before have so many been asked to approve something about which they know so little and which is designed to benefit so few.

We are being told that we’ll feel good if we vote for it as if we are so emotionally and intellectually crippled that we need to roll over and have our tummies tickled by an ever-caring government that at the end of the day, just wants everyone to “feel good”.

The inference is that if you vote No, you’ll feel bad.

I do feel bad, but because I see the inevitability of my country being forever divided by race if the Voice is approved with Indigenous people being accorded a special status not available to others by virtue of their ethnicity.

It’s not what this nation is supposed to be about. It will split us forever and we will all be the poorer for it.

It’s Anzac Day in a week’s time and the ghosts of those who gave their lives in defending our homeland will once more be visited upon us.

They died defending a democracy that guaranteed that we were all treated equally. I cannot help but wonder how they would regard this current debate.




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