$3m super tax officially abandoned for this year

The government’s plan to increase the tax on superannuation balances over $3 million has officially been abandoned, at least for this year.

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At first believed to have been left out of a group of bills Labor tried to push through via a guillotine motion on Thursday, the Better Targeted Superannuation Concessions Bill was included for a brief time before the motion suffered a defeat in Senate.

After tense negotiations between Labor, the Greens, and Senate independents, the government then scaled back its original agenda, cutting 36 bills down to a package of 27 pieces of legislation and excluding the controversial tax on super balances over $3 million.

As it currently stands, the bill has been scrapped having been considered too controversial and too hard to pass.

According to SMSFA CEO Peter Burgess this is “a big win for the sector”.

He told SMSF Adviser that this is a “sure sign” that the government knows they have issues with this bill.

“Only non-controversial bills are guillotined,” Burgess said.

According to the Parliamentary Practice and Procedure Guidelines, guillotines are used where the government can obtain the support of a majority of the Senate to provide finite debating times for a particular bill or to bring protracted debates to a close.

Earlier this week, Finance Minister Katy Gallagher assured that the changes to Division 296 remain Labor policy, but conceded that the bill faces opposition in the Senate, calling the upper house “an obstructionist chamber”.

“There’s a big cross bench with different views, we’ve got an opposition that doesn’t want to work with the government, that wants to stop progress, but we are going to be fighting right up to the end.”

SMSF Adviser team
November 28 2024
smsfadviser.com