The Hon Scott Morrison
Treasurer of Australia
Canberra, ACT, 2600
Aspects of economic policy
Congratulations on your 'Plan B' budget. A great pity you were not allowed by the opposition and the Senate to do more of the task by spending cuts, but a good effort in difficult circumstances.
I write today with two issues, and a suggestion, about Superannuation matters. First a question, then a comment and then a suggestion - not a joke, incidentally, but a real proposal.
The question: what is the equivalent pain that I believe was promised for politicians and senior public officials to that proposed for those of us with self-managed superannuation funds?
The comment: I have now sat through presentations on the new superannuation rules for holders of self-managed superannuation funds by accountants, lawyers and fund managers. While I have a Ph.D in economics, was Head of Research at the Reserve Bank in the 1980s and in corporate life a CFO and CEO of fund management companies and then worked as a non-executive director of listed companies for 15 years, I am unable to follow the rules of engagement, some of which are not yet articulated by the ATO. As the presenter today pointed out 'There are 36 working days until everything has to be ready. Some things need to be submitted before June 30 or you will have missed the boat for appropriate registration'.
While I have largely retired from earning money, I am very busy with private, non-commercial activities. I am advised I need my will checked, get assets valued, update death benefit nominations and SMSF deed, assess impact on estate planning and above all consult appropriate legal advice.
I do not have time or resource to do all these things in, say, 30 working days. And I have far better things to do with my time than sit with (expensive) relevant experts to try to work out many decisions by, say, 20 June. At a bare minimum you must allow another year for people to get all this work done, accepting that the current 'Plan A' will be effective from 1 July 2017.
The suggestion: Allow a 'Plan B' option for those of us who miss the deadline or who would prefer to maintain their existing approach, with one vital change. 'Plan B' people will pay 15 % of all income withdrawn from their self-managed superannuation fund, ie pension amounts, accepting that existing minimum or maximum amounts for withdrawals will apply.
Mr Treasurer, this option is simple, clean and may well produce some extra revenue. If the same rules are applied to retiring senior politicians and public servants, a 15 % tax on all pensions, many SMSF people will have little cause to quibble, and their retirements can proceed as they do now. We can even feel a warm glow for our larger financial contributions to the public purse.
Dr Peter Jonson