Footnotes

Chapter 1 - Introduction

[1]        Superannuation (Excess Concessional Contribution Tax) Bill 2006; Superannuation (Excess Non-concessional Contribution Tax) Bill 2006; Superannuation (Excess Untaxed Roll-over Amounts Tax) Bill 2006; Superannuation (Departing Australia Superannuation Payments Tax) Bill 2006; and Superannuation (Self Managed Superannuation Funds) Supervisory Levy Amendment Bill 2006.

[2]        Limits on non-concessional contributions applied from 10 May 2006. The revised age pension arrangements will commence on 20 September 2007.

[3]        'A plan to simplify and streamline superannuation', Press Release, the Hon. Peter Costello MP, 9 May 2006.

[4]        A Plan to Simplify and Streamline Superannuation: Detailed Outline, The Treasury, May 2006.

[5]        A Plan to Simplify and Streamline Superannuation: Outcomes of Consultation, The Treasury, 5 September 2006.

[6]        A list of transitional arrangements is included in 'Simplified superannuation – final decisions', Press Release, the Hon. Peter Costello MP, 5 September 2006, p.2.

[7]        'Simplified superannuation legislation introduced into Parliament', Joint Press Release, Treasurer, Minister for Revenue and Assistant Treasurer, 7 December 2006.

[8]        Tax Laws Amendment (Simplified Superannuation) Bill 2006 and related bills, Explanatory Memorandum, p.5.

[9]        A Plan to Simplify and Streamline Superannuation: Detailed Outline, The Treasury, May 2006, p.vii.

[10]      The Hon. Peter Costello MP, Second Reading Speech, Tax Laws Amendment (Simplified Superannuation) Bill 2006, 7 December 2006.

[11]      Association of Superannuation Funds of Australia, Submission 6, p. 1.

[12]      This change will not affect state and territory superannuation schemes.

[13]      The Hon. Peter Costello MP, Second Reading Speech, Tax Laws Amendment (Simplified Superannuation) Bill 2006, 7 December 2006.

Chapter 2 - Key provisions and overview

[1]        The annual age-based limits for 2006–07 are $15 260 for people under 35 years; $42 385 for people aged 35–49 years; and $105 113 for people 50 years and over.

[2]        Explanatory Memorandum, p. 21.

[3]        Explanatory Memorandum, p. 38.

[4]        Explanatory Memorandum, p. 23.

[5]        Other categories of excluded contributions are outlined in the Explanatory Memorandum at page 22.

[6]        Explanatory Memorandum, p. 25.

[7]        Explanatory Memorandum, p. 26.

[8]        Explanatory Memorandum, p. 32. To be eligible for the transitional cap those aged 65–74 must satisfy the 'work test' set out in the Superannuation Industry (Supervision) Regulations 1994.

[9]        A Plan to Simplify and Streamline Superannuation: Detailed Outline, The Treasury, May 2006, p. 30.

[10]      Explanatory Memorandum, p. 29.

[11]      Explanatory Memorandum, p. 39.

[12]      Explanatory Memorandum, p. 44.

[13]      Explanatory Memorandum, p. 51.

[14]      From 2015 until 2024 the preservation age will be incrementally increased from 55–60.

[15]      These are outlined in further detail at Treasury, A plan to simplify and streamline superannuation: Detailed outline, May 2006, p. 14.

[16]      Treasury, A plan to simplify and streamline superannuation: Detailed outline, May 2006, pp 13–15. See also Explanatory Memorandum, p. 46.

[17]      Explanatory Memorandum, pp 45 and 47. See also Treasury, A plan to simplify and streamline superannuation: Outcomes of consultation, September 2006, pp 24–25.

[18]      Explanatory Memorandum, p. 51. Lump sums above this threshold ($135 590 in 2006–07) are taxed at 30 per cent and at marginal rates above the RBL.  

[19]      Explanatory Memorandum, p. 51.

[20]      In 2006–07 the lump sum RBL was $678 149 and pension RBL $1 356 291. Further information is available at www.ato.gov.au/super.

[21]      The no-TFN tax is specified under new section 29 on the Income Tax Rates Act 1986. The $1000 threshold is provided for under new section 295-610 of the Income Tax Assessment Act 1997. According to new paragraph 295-610(2)(a) the $1000 threshold will not apply for accounts opened on or after 1 July 2007.

[22]      New section 295-675.

[23]      New section 8ZD of the Taxation (Interest on Overpayments and Early Payments) Act 1983.

[24]      The Hon. Peter Costello MP, Second Reading Speech, Tax laws Amendment (Simplified Superannuation) Bill 2006, 7 December 2006.

[25]      Treasury, A plan to simplify and streamline superannuation: Outcomes of consultation, September 2006, pp 22–23.

[26]      Treasury, A plan to simplify and streamline superannuation: Outcomes of consultation, September 2006, p. 21.

[27]      Treasury, A plan to simplify and streamline superannuation: Outcomes of consultation, September 2006, p. 22. Superannuation benefits are not included in employment terminiation payments.

[28]      Treasury, A plan to simplify and streamline superannuation: Outcomes of consultation, September 2006, p. 21.

[29]      Treasury, A plan to simplify and streamline superannuation: Detailed outline, May 2006, p. 33.

[30]      Explanatory Memorandum, p. 176.

[31]      Treasury, A plan to simplify and streamline superannuation: Outcomes of consultation, September 2006, p. 18.

[32]      Current threshold rates are $161 500 for single homeowners; $229 000 for couple homeowners; $278 500 for single non-homeowners and $346 000 for couple non-homeowners.

[33]      A Plan to Simplify and Streamline Superannuation: Detailed Outline, The Treasury, May 2006, p. 37.

[34]      The Hon. Peter Costello MP, Treasurer, Second Reading Speech, Tax Laws Amendment (Simplified Superannuation) Bill 2006, House of Representatives Hansard, 7 December 2006, p. 1.

[35]      A Plan to Simplify and Streamline Superannuation: Detailed Outline, The Treasury, May 2006, p. 39.

[36]      Explanatory Memorandum, pp 157–171.

[37]      Treasury, A plan to simplify and streamline superannuation: Outcomes of consultation, September 2006, p. 27.

[38]      Simplified Superannuation – Frequently Asked Questions, Portability and Lost Member Register, http://simplersuper.treasury.gov.au/faq/html/portability.asp.

 

Chapter 3 - Issues raised in evidence

[1]        National Institute of Accountants, Submission 13, p. 1.

[2]        CPA Australia, Submission 17, p. 1.

[3]        Association of Superannuation Funds of Australia, Submission 6, p. 1.

[4]        Investment & Financial Services Association, Submission 18, p. 1.

[5]        Australian Chamber of Commerce and Industry, correspondence received 18 January 2007, pp 1–2. The Australian Council of Social Service also supported this view, Submission 21, p. 1.

[6]        Explanatory Memorandum, p. 6.

[7]        Institute of Actuaries of Australia, Submission 7, p. 3.

[8]        Institute of Actuaries of Australia, Submission 7, p. 4.

[9]        Figures derived from Institute of Actuaries of Australia, Submission 7, p. 5.

[10]      Australian Council of Social Service, Submission 21, p. 2.

[11]      Australian Institute of Superannuation Trustees, correspondence received 19 January 2007, p. 2.

[12]      Association of Superannuation Funds of Australian, Submission 6, p. 3. This assumes that the concessional contribution limit reaches $55 000 in 2011­–12.

[13]      CPA Australia, Submission 17, p. 3. The National Institute of Accountants proposed an extension of the transition period until 2014–15, National Institute of Accountants, Submission 13, p. 3.

[14]      Under the current age-based limits which are proposed to be abolished those aged 50 and over can contribute around $5000 per annum above the transitional limit.

[15]      PricewaterhouseCoopers, Submission 3, p. 2.

[16]      Small Independent Superannuation Funds Association, Submission 14, p. 1.

[17]      Institute of Chartered Accountants in Australia, Submission 20, p. 2. However, this does not appear to be strictly the case as the $450 000 figure is not an absolute limit. New sections 292‑80 and 292-85 would allow foreign transfers (and other large domestic contributions) of over $450 000 spread across three financial years, with contributions in excess of the $450 000 limit taxed at the top marginal rate.

[18]      Mr Trevor Thomas, Principal Adviser, Superannuation, Retirement and Savings Division, Department of the Treasury, Committee Hansard, 30 January 2007, p. 52.

[19]      Mr Trevor Thomas, Principal Adviser, Superannuation, Retirement and Savings Division, Department of the Treasury, Committee Hansard, 30 January 2007, p. 52.

[20]      Mr Trevor Thomas, Principal Adviser, Superannuation, Retirement and Savings Division, Department of the Treasury, Committee Hansard, 30 January 2007, p. 52.

[21]      Miss Stephanie Lee, Senior Policy Manager, Investment and Financial Services Association, Committee Hansard, 30 January 2007, p. 13.

[22]      Assuming that there will be a single transfer of funds which would allow the individual to take advantage of the three-year non-concessional contributions limit of $450 000.

[23]      See for example Association of Superannuation Funds of Australia, Submission 6, pp 3–5; National Institute of Accountants, Submission 13, p. 2; Mercer Human Resource Consulting, Submission 16, p. 29; and Investment & Financial Services Association, Submission 18, p. 5.

[24]      New section 292-385. This timeframe is consistent with the arrangements applying to an individual’s other income tax liabilities.

[25]      New sections 292-410 and 292-415.

[26]      See for example Association of Superannuation Funds of Australia, Submission 6, pp 3–5; National Institute of Accountants, Submission 13, p. 2; Mercer Human Resource Consulting, Submission 16, p. 29; and Investment & Financial Services Association, Submission 18, p. 5. The relevant provision is new section 292-390.

[27]      Association of Superannuation Funds of Australia, Submission 6, p. 4.

[28]      Association of Superannuation Funds of Australia, Submission 6, p. 4.

[29]      Explanatory Memorandum, p. 34. 

[30]      CPA Australia, Submission 17, p. 4.

[31]      Institute of Chartered Accountants in Australia, Submission 20, p. 1.

[32]      CPA Australia, Submission 17, p. 4.

[33]      New paragraphs 290-85(1)(a) and (b) respectively.

[34]      National Institute of Accountants, Submission 13, p. 2; and Mercer Human Resource Consulting, Submission 16, pp 24–25.

[35]      National Institute of Accountants, Submission 13, p. 2. Mercer Human Resource Consulting also flagged the possibility of a limitation on the period to finalise payments: Submission 16, p. 25.

[36]      AXA Australia, Submission 12, p. 2, referring to sub-subparagraph 274(1)(a)(i)(B) of the Income Taxation Assessment Act 1936.

[37]      AXA Australia, Submission 12, p. 2.

[38]      Association of Superannuation Funds of Australia, answer to question on notice, 30 January 2007 (received 31 January 2007).

[39]      Explanatory Memorandum, p. 51. Lump sums above this threshold ($135, 590 in 2006-07) are taxed at 30 per cent and at marginal rates above the RBL.

[40]      CPA Australia, Submission 17, p. 3.

[41]      CPA Australia, Submission 17, p. 4.

[42]      CPA Australia, Submission 17, p. 4.

[43]      Neville Smith, Submission 2, p. 6.

[44]      Correspondence to the Hon. Phil Ruddock MP dated 14 July 2006. Cited in Ms Patricia Graham, Submission 9, p. 3.

[45]      Mr Michael Gill, Submission 1, p. 2.

[46]      Mr John Graham, Submission 5, p. 1.

[47]      Mr Neville Smith, Submission 2, p. 2.

[48]      Regular Defence Force Welfare Association, Submission 4, pp. 1–2.

[49]      Mr Colin Wade, Submission 8, p. 2.

[50]      Committee Hansard, 30 January 2007, p. 24.

[51]      Committee Hansard, 30 January 2007, p. 50.

[52]      Committee Hansard, 30 January 2007, pp. 50-51.

[53]      Committee Hansard, 30 January 2007, p. 52.

[54]      Mr Trevor Thomas, Committee Hansard, 30 January 2007, p. 51.

[55]      It also includes a capital gains exempt component, concessional component and post-June 1994 invalidity component.

[56]      Explanatory Memorandum, p. 76.

[57]      AXA Australia, Submission 12, p. 6.

[58]      AXA Australia, Submission 12, p. 6.

[59]      Investment & Financial Services Association, Submission 18, p. 4.

[60]      Mercer Human Resource Consulting, Submission 16, p. 27.

[61]      Association of Superannuation Funds of Australia, Submission 6, p. 5.

[62]      ASFA, Submission 6, p. 5.

[63]      Mercer Human Resource Consulting, Submission 16, p. 17.

[64]      Explanatory Memorandum, p. 70.

[65]      See for example Superannuation Australia, Submission 19, p. 2.

[66]      Or 30 per cent on untaxed components.

[67]      CPA Australia, Submission 17, p. 2.

[68]      See for example, Mercer Human Resource Consulting, Submission 16, p. 16; CPA Australia, Submission 17, p. 2; Institute of Chartered Accountants in Australia, Submission 20, pp 2–3; Australian Institute of Superannuation Trustees, correspondence received 19 January 2007, p. 5; Taxation Institute of Australia, correspondence received 22 January 2007, p. 5.

[69]      Department of Treasury, A Plan to Simplify and Streamline Superannuation, May 2006, p. 16.

[70]      Pitcher Partners, correspondence received 24 January 2007, p. 4.

[71]      Taxation Institute of Australia, correspondence received 22 January 2007, p. 5. See also CPA Australia, Submission 17, p. 2.

[72]      Regular Defence Force Welfare Association, Submission 4, p. 2.

[73]      Non-dependants will no longer be able to receive superannuation death benefits as an income stream.

[74]      New paragraph 307‑125(3)(c) of the Income Tax (Transitional Provisions) Act 1997.

[75]      AXA Australia, Submission 12, p. 4.

[76]      AXA Australia, Submission 12, p. 4.

[77]      AXA Australia, Submission 12, p. 5.

[78]      Mercer Human Resource Consulting, Submission 16, p. 10.

[79]      Investment & Financial Services Association, Submission 18, p. 4.

[80]      Mercer Human Resource Consulting, Submission 16, p. 5.

[81]      Mercer Human Resource Consulting, Submission 16, pp 6–7. Mercer acknowledged that the provision of TFNs for new employees are likely to increase significantly as a result of the proposed arrangements that provide when an individual makes a TFN declaration to their employer they are also authorising their employer to provide the TFN to their superannuation fund.

[82]      Australian Institute of Superannuation Trustees, correspondence received 19 January 2007, p. 3.

[83]      Ms Raelene Vivian, Deputy Commissioner, Australian Taxation Office, Committee Hansard, 30 January 2007, p. 45.

[84]      Ms Raelene Vivian, Deputy Commissioner, Australian Taxation Office, Committee Hansard, 30 January 2007, p. 45.

[85]      Mr Trevor Thomas, Principal Adviser, Superannuation, Retirement and Savings Division, Department of the Treasury, Committee Hansard, 30 January 2007, p. 46.

[86]      Mr Trevor Thomas, Principal Adviser, Superannuation, Retirement and Savings Division, Department of the Treasury, Committee Hansard, 30 January 2007, pp 47–48.

[87]      Mr Philip Gallagher, Manager, Retirement and Income Modelling Unit, Department of the Treasury, Committee Hansard, 30 January 2007, p. 45.

[88]      For example Mercer Human Resource Consulting, Submission 16, pp 5–8; and Australian Institute of Superannuation Trustees, correspondence received 19 January 2007, p. 3.

[89]      Mercer Human Resource Consulting, Submission 16, p. 7.

[90]      Association of Superannuation Funds of Australia, Submission 6, p. 2.

[91]      Australian Chamber of Commerce and Industry, correspondence, 18 January 2007, p. 10.

[92]      Investment & Financial Services Association, Submission 18, pp 3–4.

[93]      For example Dr Michaela Anderson, Deputy Chief Executive Officer, Association of Superannuation Funds of Australia, Committee Hansard, 30 January 2007, p. 5: and Mr John Ward, Manager, Research and Information, Mercer Human Resource Consulting, Committee Hansard, 30 January 2007, p. 20.

[94]      Mr Trevor Thomas, Principal Adviser, Superannuation, Retirement and Savings Division, Department of the Treasury, Committee Hansard, 30 January 2007, p. 46.

[95]      New section 295-605.

[96]      New paragraph 295-675(1)(a).

[97]      Explanatory Memorandum, pp 98–99.

[98]      Mercer Human Resource Consulting, Submission 16, p. 9.

[99]      Mercer Human Resource Consulting, Submission 16, p. 9.

[100]    Mercer Human Resource Consulting, Submission 16, p. 9. ASFA also raised the issue relating to former members quoting TFNs: Association of Superannuation Funds of Australia, Submission 6, pp 6–7.

[101]    Mercer Human Resource Consulting, Submission 16, p. 10.

[102]    Treasury, correspondence received 5 February 2007, p. 1.

[103]    AXA Australia, Submission 12, p. 3.

[104]    Investment & Financial Services Association, Submission 18, p. 4.

[105]    Treasury, correspondence received 5 February 2007, p. 1.

[106]    DLA Phillips Fox, Submission 15, pp 1–2.

[107]    DLA Phillips Fox, Submission 15, p. 2.

[108]    Mercer Human Resource Consulting, Submission 16, pp 20–23.

[109]    DLA Phillips Fox, Submission 15, p. 2.

[110]    Mercer Human Resource Consulting, Submission 16, pp 19–20.

[111]    Mercer Human Resource Consulting, Submission 16, p. 20.

[112]    Mercer Human Resource Consulting, Submission 16, p. 23.

Additional Remarks - Senator Andrew Murray: Australian Democrats

[1]        For example, the Australian Council of Social Service highlighted its concern that wealthy Australians were the true beneficiaries from provisions contained with the Bill thereby perpetuating ‘income inequality in retirement’. Australian Council of Social Service, Submission 21, p. 21.

[2]        Treasury estimate after considering dividend imputation etc.

[3]        Australian Taxation Office, Taxation Statistics 2003–2004.