After the Treasury Laws Amendment (2019 Measures No. 1) Bill 2019 was referred to the economics legislation committee by the Senate on 14 February 2019, the committee has now reported back.
The government introduced the bill into Parliament in mid-February this year.
In its report, the committee recommended that Treasury Laws Amendment (2019 Measures No. 1) Bill 2019 and the Excise Tariff Amendment (Supporting Craft Brewers) Bill 2019 be passed.
The committee said that by allowing groups of five or six people to establish an SMSF or small APRA fund, the amendments would provide increased flexibility for those with larger families to manage their retirement savings.
The two Labor senators on the committee were opposed to the amendment to extend the SMSF member limit to six members.
Labor senator Jenny McAllister said the government has not provided an adequate or compelling policy rationale for increasing the membership limit of SMSFs from four to six.
“No detailed analysis has been provided by the government, nor has any formal public consultation been conducted by Treasury on this measure as far as Labor senators are aware,” Ms McAllister said.
The one independent senator on the committee, Australian Greens senator Peter Whish-Wilson, did not raise any concerns about the measure.
Peter Burgess, SuperConcepts general manager of technical services and education, said the stage now appears to be set for this bill to be debated in Parliament next week, as the government attempts to pass this measure before the election is likely to be called at the end of that week.
“With Labor senators during the committee inquiry recommending this measure be removed, from an otherwise non-controversial package of bills, it will be interesting to see whether the government now agrees to remove this particular measure from the bill package to secure its smooth passage through the Parliament, or whether they stay the course and decide to dig their heels in,” Mr Burgess said.
“If it’s the latter, they are likely to need the support of the minor parties to get this particular measure through, which may still happen particularly if the minor parties don’t support Labor’s policy to remove refundable franking credits.”
Allowing additional accumulation members to join an SMSF should reduce that fund’s entitlement to excess franking credits, meaning they are less likely to be impacted by Labor’s franking credit policy, he explained. You can read about the proposed franking credit policy more here.
“In this regard, this could emerge as an early test of support for Labor’s franking policy proposal.”