Sent: 01-03-2011 09:32:04
In this issue:
Return to full article list
HomeFree weekly newsletterSelf Managed Super Fund ArticlesCustomer surveysSelf Managed Super Fund Book storeContact usATC in the pressLogin
How to please an audience
At the just concluded SPAA Conference, the Federal Minister responsible for superannuation, the Hon Mr Bill Shorten, referred to the "Red Book's" reference to Self Managed Super Funds as the "tax avoidance vehicle of choice".
The Red Book you'll recall is written by Government Departments and is meant to help the winning politicians to understand what they might reasonably consider doing during their time in Government.
Shorten said that the Gillard Government considered SMSFs legitimate (which is not quite the same as disagreeing that they're a tax avoidance vehicle of choice).
Anyway Shorten received applause for claiming that he would increase the concessional contribution caps. But he then back-tracked to refer to the policy he was actually talking about.
He meant one of the policies the Gillard Government took to the 2010 Federal election - in particular the ability to contribute $50,000 if you're over 50 and your account balance is less than $500,000.
Today Mr Shorten released a discussion paper on how this policy may be implemented. This policy could easily lead to another version of the odious Reasonable Benefit Limits.
Unsurprisingly he enthusiastically pushed the increase in the Super Guarantee. One wonders how the Government can force taxpayers to put money into investments which at best is recording wealth just above inflation is strange. As one person said to me at the SPAA Conference, the Government might have been better forcing people to put their SG contributions into paying off their home mortgages.
Mr Shorten acknowledged that people are fed up with changes to the super system and certainty is essential. (The problem is that the political parties can't agree on what is essential for the super system.)
Moreover the Government is short of cash. This helps to explain why the excess contribution issue will not be sorted out anytime soon and why they want to introduce a carbon tax. It might also explain why there has been recent speculation that the Government might do away or reduce some super tax concessions such as transition to retirement pensions.
Finally Mr Shorten said that he thought larger funds would have to take on some of the characteristics of Self Managed Super Funds if they wished to compete. There's no doubt this is a neat line and one likely to get a good head-line (as has occurred). Personally I'm not entirely sure what point he was making.
On trying to understand why investors use SMSFs I encourage you to read the recently released SPAA/Russell Investments research into SMSFs available from the following link: http://www.atcbiz.com.au/r.php?r=66xmq0b
Finally please consider purchasing a copy of "A How To Book Of Self Managed Super Funds". You can look at the contents page at the following link: http://www.atcbiz.com.au/r.php?r=0mjd6ne
The 4th edition was released just before Christmas.
For details of the changes made from version 3 to version 4 visit: http://www.atcbiz.com.au/r.php?r=8mz1024
As you'll see from the list there have been many changes.
Two purchase options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST). The book can be purchased at the following link: http://www.atcbiz.com.au/r.php?r=5a4agqb
This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.