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Relief from CGT for small super funds is a sham.



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Relief From CGT For Small Super Funds Is A Sham Kelvin Thomson - Shadow Assistant Treasurer

Media Statement - 21 June 2000

Labor's Shadow Assistant Treasurer, Mr Kelvin Thomson has described the Government's eleventh hour amendments of the New Business Tax System (Miscellaneous) No.2 to apply Capital Gains Tax transitional measures to small superannuation funds as a sham.

"These amendments do very little to alleviate the problem.

"The five year moratorium to adjust to the new CGT arrangements only defers the retrospective nature of the legislation, and only helps super funds that may already be converting funds from the accumulation phase to the pension fund, during that 5 year stage.

"If a fund member does not retire and begin their pension benefit before 1 July 2005 they will be hit with the retrospective CGT. It's a window of opportunity that will benefit only a few funds.

"After the five years is up we are back to a situation where the Government is effectively applying a retrospective CGT, something the Prime Minister previously described as 'un-Australian'.

"There is not just the matter of capital gains tax concerns arising from this legislation. There is also the issue of death duties. The proposals do not appear to allow the payment of lump sum death benefits directly from the segregated pension assets which this legislation will set up.

"The amendments also do nothing to address the costs associated with compliance and valuation requirements of the legislation.

"The transitional provisions do little to remove the retrospective measure of the bill which may catch the family home in the bush. The CGT will apply to a family home if it is located on a property used in primary production and where that is held in a small superannuation fund.

"The Labor Party will ensure that an inquiry into this bill will be conducted by the Senate Superannuation Committee where the Government will have a chance to put its case for this bill," Mr Thomson concluded.

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.