Coalition Senators' Dissenting Report

Labor’s super tax

1.1During the May 2022 election campaign, then Opposition Leader Anthony Albanese said, “we have no intention of making any super changes”, including tax or capped contribution changes.[1]

1.2In February 2023, Prime Minister Albanese promised “no major changes” to superannuation.[2]

1.3Nevertheless, on 28 February 2023 the Albanese Labor Government broke their election promise and announced a new tax on superannuation.

1.4This election promise sits alongside Labor’s broken promises on franking credits and the stage 3 tax cuts. It is obvious that the Labor Party cannot be trusted on tax.

1.5Not only is this tax another broken promise, but it is an unprecedented tax on unrealised gains. Taxing unrealised gains is an entirely novel concept that has no basis in basic tax principles. It will result in de facto double taxation, liquidity issues for SMSFs, and inequitable outcomes.

1.6Furthermore, as the new tax threshold is not indexed with inflation, it will capture hundreds of thousands of Australians, particularly young Australians, into the future.

1.7Shockingly, this bill, as it stands, will not apply to Mr Albanese himself. This Bill only applies to those on accumulation schemes, and as Mr Albanese is on the old parliamentary defined benefits scheme, the supposed method for calculating the Prime Minister’s tax liability will be left to delegated legislation. Therefore, the Prime Minister is asking the Parliament to vote on a tax bill that will not in and of itself apply to him.

A tax that will capture young Australians

1.8Labor has decided to set the threshold for this new tax at $3 million, claiming it will only capture 80 000 Australians. However, because the measure is not indexed, it will in actuality capture hundreds of thousands more Australians in the years ahead, particularly younger Australians just entering the workforce. This is entrenched intergenerational unfairness.

1.9In fact, the Treasury has conceded that this is part of their fiscal strategy to fund their big spending:

As the Treasurer said when he announced the measure, this measure will contribute to the sustainability of the system over time, and the non-indexation contributes to that overtime.[3]

1.10Numerous experts and stakeholder associations provided submissions to this inquiry expressing concern about this unprecedented tax method, providing extensive examples, case studies and cameos on potential adverse outcomes for taxpayers.[4]

1.11In their submission, the Business Council of Australia refuted the Treasury’s argument that non-indexation provides ‘certainty’ for taxpayers:

The ‘certainty’ argument against indexation is unconvincing. Notwithstanding the current high rate of inflation, there is reasonable certainty that long-run inflation outcomes will be consistent with the RBA’s inflation target, so future changes in an indexed threshold are broadly foreseeable by fund members, even over long horizons.[5]

1.12The Centre for Independent Studies noted in their submission that “the absence of indexation creates a new form of bracket creep that will ensure many more super fund members are affected by the new tax.”[6]

1.13In their submission to the inquiry, the Financial Services Council (FSC) argued that the lack of indexation “is intergenerationally unfair”.[7] At the public hearing, the FSC gave evidence that their modelling found that the tax would in fact capture 500 000 Australians in the future, contrary to Treasury’s estimates:

Senator BRAGG: That's very helpful. Let's move on to the issue of indexation. These might be questions better asked of the FSC. How many people are hit now—80,000, is it? And you're saying that half a million will be hit by what year?

Mr Briggs: That's right. Our understanding is that the Treasury estimate relates only to people who are currently caught by the tax. What we did is inflate it for CPI, on a fairly conservative estimate, and based on ATO tax statistics our estimate is that 500,000 people who are currently in the workforce would be impacted. I think Treasury came out with a larger estimate based on those who are not yet in the workforce. Those who are will have the full benefit of 12 per cent superannuation over their working life. Even on Treasury's own numbers, the 80,000 is a very small estimate.

Senator BRAGG: On an intergenerational basis, who is this going to hit the hardest? Would it be the millennials, the gen Z or someone else? Who is it going to hit hard?

Mr Briggs: That's right. The way it's designed at the moment is it will have the greatest impact on younger Australians because the effective threshold for those income earners is much closer to around the $1 million mark.

Senator BRAGG: So it's better for the boomers than it is for the millennials?

Mr Briggs: That's right.[8]

1.14Furthermore, the FSC confirmed that the Treasury has not disputed their modelling.[9]

1.15Submitting to the inquiry, Wilson Asset Management said that “not indexing will put unnecessary strain on younger generations”.[10] Agreeing with the FSC’s estimates, they noted that “about one-third of these super funds members are now under 30, meaning today’s 80 000 estimate is set to grow exponentially. A $3 million cap for today’s 30-year-old will be worth about $1 million when they leave the workforce”.[11]

1.16The SMSF Association, in their submission, explained that “the lack of indexation of the threshold will over time, because of inflation and increasing wages (and therefore increased compulsory superannuation guarantee payments), see this measure impact many more ordinary Australians.”[12] When asked, the SMSF Association CEO agreed with the research put forward by the FSC.[13]

1.17Agreeing with other witnesses, CPA Australia submitted that “the anomalous lack of indexation threatens to expose Australians in the future to inflation risk resulting in higher taxation of smaller real amounts of retirement savings”.[14]

1.18During the public hearing, Chartered Accountants Australia & New Zealand (CAANZ) agreed that non-indexation is a critical design flaw, noting that “the number of people impacted in the future will, by design, increase as balances increase by inflation, capital value increases and so on. That is issue No. 1.”[15] CAANZ also disrupted the argument that it’s ‘abnormal’ to have indexation in superannuation rules, noting that “all other thresholds, contribution amounts, benefits paid out and so on are subject to indexation, and generally by average weekly earnings.”[16]

1.19The Institute of Financial Professionals Australia (IFPA) usefully provided a list of indexed superannuation thresholds:

…thresholds like contribution caps, concessional and non-concessional, and the transfer balance cap—these are all similar types of caps that we're talking about with this new measure, and they're all indexed.[17]

1.20Noting the other indexed thresholds in superannuation, CPA Australia informed the committee that the transfer balance cap will exceed this $3 million threshold in 20 years:

That amount is actually indexed to CPI. You can do some very basic modelling on this using the 2½ per cent default figure that ASIC's Moneysmart website likes to go for and work out that the transfer balance cap, which is currently set at $1.9 million, will overtake the $3 million unindexed division 296 threshold by 2044. That's only 20 years away. Most people are in superannuation for about 40 years of their working lives.[18]

1.21It’s absurd to have non-indexed new tax in superannuation interacting with indexed thresholds. As noted by CPA Australia, this tax will capture more people into the future due to Labor’s high inflation economy:

Eventually, it will hurt more and more people. The current figure of 0.5 per cent that's put around is a figure that exists currently. Inflation being what it is, of course, we would expect that that figure would increase by 1 June 2026 or when this comes into effect. That, of course, does increase more and more as we go into the future. In our submission to Treasury on the consultation paper, we pointed out that, in 20 years time at 2½ per cent CPI, the transfer balance cap would come up to parity with the division 296 threshold, which creates a policy conundrum of sorts … [19]

1.22IFPA agreed with this assessment, in their submission to the inquiry, noting that the new tax will:

… capture more people over time through bracket creep and will therefore be worth far less in future dollars. Furthermore, the long-term impact of the $3 million threshold not being indexed to inflation will lead to intergenerational inequity between the different generations over time.[20]

1.23The National Farmers Federation (NFF) expressed concern about the lack of indexation, noting that “given the long-term nature of superannuation and rising inflation, the $3 million value will increasingly capture a greater share of Australian farming assets.”[21]

1.24It’s clear that Labor is gearing its tax policy to complement its highly inflationary economic management, by using bracket creep to sure up its fiscal position. Non-indexation is part of Labor's fiscal strategy. As noted by the FSC:

I think it just speaks volumes that there was a conscious decision made not to do that and that, I suppose, the long-term revenue benefits were prioritised over the intergenerational equity element.[22]

1.25At the public hearing, the Tax Institute questioned why the measure wouldn’t be indexed if bracket creep wasn’t part of the claimed policy intent:

If I could add, on the indexation point, while this is currently proposed to affect only about 0.5 per cent, about 80,000 people, we exacerbate the generational inequity by looking at this as a current issue and not a future problem. More and more average Australians will end up within the scope of these rules, particularly if it isn't indexed. We don't want to be in a position where we are putting people in scope of something that they aren't meant to be and that's not policy intent.”[23]

1.26The Association of Superannuation Funds of Australia (ASFA), who support the tax, said that they question the 500 000 figure given by the FSC because it “is based on the assumption that the threshold may [not] change over a 40-year period.”[24]

1.27But if the legislation contains no indexing, then the proposed tax as it stands will in fact capture as many people as modelled by the FSC. However, ASFA thinks that the threshold will change:

Senator BRAGG: You're not disputing the 500,000?

Mr Clare: No, I'm disputing the assumption that nothing will change in 40 years in terms of the threshold.[25]

1.28If ASFA thinks the new tax’s threshold will increase over time, which would require legislative change, then why not have indexation in the bill? The Super Members Council said “it would be most unlikely that the threshold wouldn't be adjusted at some point in the future.”[26]

1.29At the public hearing, the Treasury admitted that they had assumed a change in the $3 million threshold as part of the 2023 Intergenerational Report (IGR):

Senator BRAGG: Has Treasury built indexation of this proposed tax measure in the IGR?

…

Mr Hawkins: As a technical assumption, a number of measures that aren't indexed at a point in the medium term are assumed to move. I would have to take notice on what basis that moves, but it is expected that thresholds that are fixed—that's not only thresholds within the superannuation system.[27]

1.30The Treasury officials said that they “haven't undertaken a detailed review of modelling that industry have done”.[28] They only said that the FSC’s ‘methodology’ is different to theirs.

1.31The impact of the tax in the long term has been incorporated into the IGR projections, despite the Treasury previously claiming at Budget Estimates that they had not modelled how many people in the future will pay the new tax.[29]

1.32However, if the IGR factors in the tax and assumes iterative threshold changes, then the Treasury must have their own estimate of how many people the new tax will capture. Indeed, the Treasury admitted that the number of people affected by the tax will rise over time, as part of Treasurer Chalmers’ fiscal strategy:

Senator BRAGG: Do you have any sense of how many people will be affected by this new tax in the long run, given there are considerable concerns here about how this will affect millennials and Gen Zs?

Mr Hawkins: As I said, we haven't got a precise number, but it's a fair assumption that without indexation the number of individuals affected or a proportion of the population affected will rise over time. As the Treasurer said when he announced the measure, this measure will contribute to the sustainability of the system over time, and the non-indexation contributes to that over time.[30]

1.33On notice, the Treasury confirmed that indexation was applied to non-indexed tax thresholds in the ‘medium-term’ as a technical assumption of the IGR.[31]

1.34When asked on notice to analyse the industry estimates of 500 000 individuals captured by the tax, the Treasury refused, saying it was not “standard Treasury practice” to do so.[32]

Taxation of unrealised gains

1.35Labor’s new tax on super is based on an unprecedented and inequitable method of determining a tax liability that has been slammed by experts; taxing unrealised gains.

1.36Normally, the capital gain of an asset is taxed at the point of sale. The capital gains of an asset is the difference between the sale price and the purchase price. On notice, accounting bodies submitted to the inquiry explaining the difference in the new super tax:

Under normal taxation of fund earnings, only realised gains are included in a superannuation fund’s assessable income for taxation purposes. The BTSC formula changes the point of taxation to the current market value of an asset…[33]

1.37Labor’s new tax on unrealised gains involves an annual tax on the assumed increased valuation of an asset over one year. This means the tax is levied on the unrealised ‘capital gain’ of an asset at the point of yearly valuation, not at the point of sale. The Business Council of Australia explained:

The proposed measure is novel in taxing unrealised gains above the $3 million threshold, based on the change in total superannuation balances net of withdrawals and contributions, with earnings proportioned based on the threshold. This measure effectively negates the existing capital gains tax discount provisions for affected fund members.

….

If a taxpayer has an unrealised gain that reverses and they then exit the superannuation system, they will not have the opportunity to recover the tax they have already paid on the unrealised gain that never eventuated.[34]

1.38Policy think tank, the Centre for Independent Studies, explained why the new tax is effectively an unprecedented wealth tax that could create heavier compliance burdens:

In effect, the proposed calculation of earnings makes the new tax a wealth tax — or at least, a tax on the annual increase in this component of an individual’s wealth. There are no other comparable taxes in Australia apart from the states’ land taxes.

Earnings are defined as the increase in an individual’s total superannuation balance with adjustments for contributions and withdrawals. Thus for the first time in the Australian system it includes unrealised capital gains.

Taxing unrealised gains raises questions about how to value assets every year and the compliance burden of doing so … taxing unrealised gains also creates compliance difficulties in situations where the asset is not generating sufficient cash flow to pay the tax.

It is also important to emphasise that taxation of unrealised gains can result in a much heavier tax burden than if the same dollar gain is not taxed until after realisation.[35]

1.39In their submission, the FSC stated this issue as among the reasons why they oppose the bill, slamming “the current calculation approach, involving taxation of unrealised capital gains, which we believe is bad policy that will impact a range of individuals with illiquid assets.”[36]

1.40Wilson Asset Management submitted that taxing unrealised gains will have negative consequences by discouraging certain investments and causing liquidity issues:

The current government proposal will have many unfortunate consequences including discouraging superannuants from providing patient risk capital, investing in illiquid or volatile assets or forcing superannuants to sell illiquid or volatile assets to fund tax bills. It is our understanding that there are no other Australian taxes that tax individual people on unrealised gains.

Many individuals have chosen to hold illiquid assets such a property, in their self-managed superannuation fund. The taxation of unrealised gains made on these assets will not only result in the individual paying tax on gains that they may never receive, it may result in significant cash flow issues. Various investable assets have no liquidity and cannot be sold to fund the unrealised tax liability. It is not possible for a self-managed super fund to simply sell part of an asset to pay the tax liability that may result from a sharp rise in the asset. This will be less of a burden to industry funds who have more options to liquidate assets.[37]

1.41Furthermore, Wilson Asset Management criticised the lack of provision to claim back tax if they are taxed on an unrealised gain that subsequently reverses:

Whilst a loss can offset future gains under this legislation, there is no provision to claim back tax that has been charged and pain in cash on a gain which disappears due to a subsequent fall in value. This is a fundamental item of tax legislation that exists nowhere else.

There is a strong possibility a member can be cumulatively taxed on investments that make an overall loss and will be unable to recover this physical payment of cash/tax paid out of the superannuation fund.[38]

1.42In their submission, IFPA agreed with this analysis, and referred to volatile super fund returns across 2021 to 2023 as an example:

For example, if we look at what has happened over the last few years, many funds in 2021 experienced large gains followed by a huge year of losses in 2022 and then levelling back up in 2023. Had this proposal been in place over this period, there would be many members who would be disadvantaged due to the peak and the fall of the market. For some members, they may never experience the peak again and won't see their balance exceed $3 million due to the above mentioned reasons.[39]

1.43At the public hearing, the CFO of Wilson Asset Management referred to the decline in returns after the GFC as an example scenario where the tax would’ve led to absurd outcomes:

You can take the GFC as an example. In 2007 I think the equity markets were up 30 per cent, and then they fell 50 per cent in the two subsequent years. So, in 2007, people would have been forced to sell assets to pay the tax liability—that they would be addressed—and then, in the subsequent years, suffered significant unrealised and potentially realised losses. So people will be forced sellers of assets today to fund that tax liability if they do not have the available cash sitting there on the sidelines.[40]

1.44The Institute of Public Accountants (IPA) submitted to the committee that “the Proposed Reforms requiring taxpayers to account for tax on unrealized gains and amounts, calculated by the application of the proposed methodology, represents a very significant departure from accepted tax orthodoxy and principle. Moreover, it does so discriminately in respect of a select and limited segment of the taxpaying population …”.[41] Furthermore, agreeing with other witnesses, they submitted that it “will create many unintended consequences particularly for funds with illiquid assets that cannot be easily liquidated to meet new Division 296 tax.”[42]

1.45At the public hearing, the IPA argued that this new tax went against basic tax principles:

This goes against established principles. When you realise an asset you have the cash to pay the capital gains. Why are we going against established principles? If we tried to tax unrealised gains outside of a superannuation environment, I think you'd have very little chance of that getting off the ground, but here we have this situation where we are considering going against established principles, and the established principles are there for a good reason—that is, if the asset is realised, you may have the cash to deal with that impost.[43]

1.46Mr Broderick of IFPA explained how this new tax would affect those with illiquid assets, by comparing traditional tax design with this new method of taxing unrealised gains:

… the issue is that in your normal, traditional tax system that applies everywhere else you get income and you pay tax on it, but you've got the income to pay the tax. If you make a capital gain then you've got proceeds from your capital gain to pay the tax. If you had a particular parcel of real estate in your fund that was fortuitously rezoned and doubled in value, you'd have a massive unrealised capital gain. You can't plan for the huge tax bill you'd get as a result of that.[44]

1.47In practice, this means that those with illiquid assets may have to sell those assets to cover this new tax liability, which would be deeply unfair:

Senator BRAGG: What actually happens in practical terms? Does a person have to sell things at a time that is—

Mr Broderick: That's right. They've got to pay that tax bill somehow. They've got to sell something; if they've got no cash, they've got to sell something in super or—

Senator BRAGG: Let's do an example. I think there are a lot of farmers who have their farms held in self-managed super funds. If they get a tax bill from the ATO, what have they got to do? Have they got to sell part of the farm?

Mr Broderick: Let's just say there is a $100,000 tax bill, just to make up a dollar figure, and they don't have $100,000 outside of super or $100,000 of cash in super. Either they've got to sell that farm in the super fund and then withdraw that amount or, alternatively, they've got to sell something outside of super to pay that amount.

Senator BRAGG: That sounds very unusual.

Mr Broderick: It is. That's why we are really, really passionate against the unrealised gain part of this. That's why most of the criticism around this tax system is around this. It's not a fair system in the sense of that we otherwise pay tax everywhere else on just realised gains.[45]

1.48On notice, accounting industry bodies referred to numerous other issues with the new tax such as the lack of a payback mechanism:

When account balance falls below $3 million, and does not go above it again, then tax has been paid on unrealised gains which would not be returned to the taxpayer. That is, not only will the regime tax unrealised gains, in this scenario, it will tax gains that are never made![46]

1.49Those with self-managed super funds will be particularly vulnerable to this tax’s application to unrealised gains, as noted by the SMSF Association in their extensive submission:

A recent research study undertaken by the University of Adelaide found over 13 percent of SMSF members (almost 7,000 SMSF members) affected by Division 296 would not have had sufficient liquidity in their fund to cover the tax liability if Division 296 had been introduced on 1 July 2020.

…

Farmers and small business operators with land and business premises owned by their SMSF may encounter significant liquidity pressures. Changes in property values do not automatically correlate to an increase in leasing income or rental yields.[47]

1.50Under questioning from Senator Smith at the public hearing, SMSF Association CEO Mr Burgess refuted arguments that the yield from illiquid assets such as farmland inside SMSFs should automatically be able to cover any liabilities under this tax:

I think the key point to note here is that the asset value of the land is not correlated with the yield. There is a view that, as asset prices increase, so does the yield, so these SMSFs should always have sufficient liquidity to pay this tax. Now, that is not the case. When it comes to rural properties, the yield is determined by other factors, not the value of the actual land itself. It could be determined by the use of that land. That's a really important point as to why, if you're basing a tax on unrealised gains, you could create significant liquidity problems for these types of funds—because they simply won't have the cash to pay that tax. This is what happens when you have a tax where you depart from taxable earnings, because you start to tax unrealised gains, which has many unintended consequences, as I mentioned earlier on.[48]

1.51Accounting bodies agreed, noting that the liquidity issue imposed on SMSFs by the new tax could force them to sell assets such as their farm:

This is particularly an issue for farmers who have their farms in their SMSF. Such SMSFs can often be illiquid as part of a compliant investment strategy identifying little need for liquidity. As a result, increases in the market value of such farms could trigger Div 296 liabilities. If such farmers do not have enough cash inside the SMSF or outside of the SMSF then they may have to sell assets (including the farm) to pay such liabilities. The same issue applies for other business owners who have their business premises in a SMSF.[49]

1.52One of the accounting bodies, CPA Australia, said that they do not support the taxation of unrealised gains, noting also that “such funds may be forced to dispose of these assets in order to cover assessments for the new tax, potentially crystallising pricing/valuation risk and reinvestment risk unnecessarily.”[50] Agreeing with them, IFPA stated that the new tax was a form of double taxation because taxpayers will also pay capital gains tax once assets are sold:

Rather, the proposed calculation methodology is essentially a form of double taxation on the same asset. That is, members will pay extra tax every year on the proportion of their balance that exceeds $3 million (assuming their balance continues to grow every year) and then pay tax again when the asset is sold. This means a member will pay extra tax on previously taxed earnings if their balance continues to grow, and then again on any unrealised gains.[51]

1.53The taxation of unrealised gains will rely heavily on the valuation methods undertaken by super funds with respect to unlisted assets. The Financial Regulator Assessment Authority (FRAA) found in 2023 that regulators had not sufficiently examined risks to members as a result of inconsistent unlisted asset valuation practices by superannuation funds.[52] Taxing unrealised gains will compound that problem.

1.54Submitting to the inquiry, the Financial Advice Association Australia is deeply opposed to this unprecedented tax method:

... the potential impact of this is substantially amplified where members hold illiquid assets in the structure, such as the family farm or small business, in the structure. In such circumstances ordinary families may be forced to sell their business and lose their livelihoods because there is insufficient cash in the SMSF to pay the tax bill. The design of this measure is without precedent and raises the question of fairness. We do not support the taxing of unrealised gains.[53]

1.55Chartered Accountants Australia and New Zealand provided evidence on the ASX 200 return volatility over the last 40 years, detailing why they oppose the proposal to tax unrealised gains:[54]

Figure 1: ASX 200 All Ordinaries – Year on year percentage return

Source: Chartered Accountants Australia and New Zealand, Submission 17, p. 13.

1.56They modelled that under this new tax methodology, the tax liability for $3 million invested in 1980 would’ve accumulated to $3.8 million by 2022 based on the total net change in market value, a rate of 13.65 per cent.[55]

1.57The Tax Institute also opposes the taxation of unrealised gains, as it sets a dangerous precedent and puts unfair pressure on taxpayers:

Schedules 1 to 3 to the Bill propose to levy a tax on unrealised capital gains. We consider that the practical and financial burden of taxing a gain that is yet to be realised outweighs any perceived macroeconomic benefits and sets a dangerous precedent for our taxation and superannuation systems more broadly. The taxation of unrealised gains can place taxpayers under significant pressure due to the mismatch between the tax liability and the cash flow associated with the underlying asset.[56]

1.58It is disappointing but perhaps not surprising that ASFA has decided to support this new tax on their members, despite conceding in their submission that taxing unrealised gains is “an unorthodox approach”.[57] They even stated in their submission that the new tax “should not set a precedent for the taxation of superannuation or personal income tax more broadly”.[58] The Actuaries Institute also expressed concern about “the precedent introduced by taxation of unrealised capital gains”.[59]

1.59However, if this Bill were to proceed, then this inequitable and dangerous new tax methodology would indeed be setting a precedent in Australia’s tax system. On this basis alone, Labor’s new tax should be opposed.

Different tax rules for politicians and public servants

1.60Labor intends to legislate their new tax on super without the bill itself directly applying to Mr Anthony Albanese and his fellow Cabinet ministers Senator Penny Wong, Mr Brendan O’Connor, Ms Tanya Plibersek and Ms Catherine King who are on the old parliamentary defined benefit scheme.

1.61Instead, the Government has chosen to give itself a regulation making power. This means the Parliament will not be able to vote on how the new tax would apply to the Prime Minister’s own pension scheme.

1.62The Treasury finally released draft regulations pertaining to defined benefit schemes on 15 March 2024, almost three months after this bill was referred to this committee for inquiry.[60] At the time of the public hearing held on 18 April 2024, the Treasury had still not concluded their consultation on the draft regulations, with submissions open until 26 April. This is a new low in terms of transparency and integrity.

1.63The draft regulations are highly complex, and witnesses at the public hearing said that they had not had sufficient time to review them in full detail.

1.64The Business Council of Australia submitted to the inquiry that it was questionable whether the regulation’s valuation method would apply equally:

It has not been shown that the application of the proposed measure to defined benefit arrangements will achieve its stated intention of ensuring commensurate treatment with defined contribution arrangements.[61]

1.65At the public hearing, the FSC explained the countless potential pitfalls of the proposed regulations:

One of the notorious things about trying to calculate the incidence of tax on defined benefit schemes is that there are many different types of defined benefit schemes—they're not all the same—so trying to design a set of regulations that applies to them equally is extremely difficult. I think what would most likely be evident in the drafting is that there will always be different impacts on different cohorts. We've already seen a lot of subgroups, such as members of the judiciary or former members of the judiciary and public servant, coming out and saying: 'This isn't fair on us. There are problems with how it's designed.' I'll allow them to speak for themselves, but I think without a doubt it will be complex and costly to implement and there will inevitably be issues because it impacts differently designed DB schemes in different ways.[62]

1.66Chartered Accountants Australia and New Zealand agreed that the regulations are “very complex”.[63] They also confirmed the immense difficulty there will be in implementing them:

Yes, it is horrible. … it's going to be incredibly hard for an individual who belongs to one of these funds to know whether or not their calculations have been done correctly or not. It's going to be incredibly difficult because there are so many twists and turns in these particular rules. You can't actually look at the system and say, 'Yes, they've actually inputted all of the right data into my calculations and got it a hundred per cent correct.'[64]

1.67It was also confirmed that the regulations would apply to the old defined benefit parliamentary schemes, which would apply to the Prime Minister, Foreign Minister and several other cabinet ministers.[65]

1.68In their evidence, IFPA highlighted the inequity in having a tax that applies differently to retired public servants and politicians compared with the general public:

We could also make the point that there is horizontal inequity in all of this in the sense that we are now going to have three regimes. You've got your constitutionally protected funds where members don't pay the tax; you've got your DB funds that pay it under this complex formula, but it's deferred until it's crystallised and payment time; and then you've got everyone else who pay annually on an unrealised gains type model.[66]

1.69Given the complexity of the regulations, the accounting witnesses couldn’t explain how the tax would be calculated for those on the defined benefit schemes like the Prime Minister, but said the calculation for those on accumulation schemes like superannuation was comparatively easy:

Senator BRAGG: Do we know the likely tax impost on a farmer who is using an SMSF with a balance exceeding the new tax threshold in the bill?

Mr Negline: We do. Our only drama with answering that with any certainty is that we actually don't know the market value of assets at the end of the year until the end of the year.

Senator BRAGG: But you have a formula that you can apply?

Mr Negline: Correct.

Senator BRAGG: We know how much an ordinary person, like a farmer, might have to pay because we have the formula in the bill before the Senate now. The question is: do we know the likely tax burden on the politician who will be subject to this new tax?

Mr Negline: You can work it out, but for people who don't administer that scheme and don't work with that scheme all day every day it's very difficult.[67]

1.70Ultimately, given this scenario, IFPA agreed that the calculation methods for those on defined benefit schemes should have been in the primary legislation rather than left to regulations:

From a legislative point of view and from someone who interprets legislation, yes, it's much better all in one spot. I agree.[68]

1.71Unusually, the Bill allows for a deferral mechanism for those on defined benefit schemes but not for those with superannuation funds, as IFPA submitted.[69] This means that those on defined benefit schemes will be able to defer ATO enforcement of tax liabilities for a time. At the public hearing, the Treasury officials described the ability to defer over a period of time as “an additional concession—in effect, a tax concession—to those individuals”.[70] This is another example of Labor creating certain rules for politicians, but different rules for everyone else.

1.72On notice, the SMSF Association said it was difficult to determine whether the regulation’s application to defined benefit schemes would be commensurate with the application to those with superannuation:

Whether or not the regulations will actually achieve this is very difficult to determine. It is our understanding that most defined benefit funds have alternative valuation methods approved by the Minister and we do not have access to this information.[71]

1.73Furthermore, the SMSF Association criticised the long delay in releasing draft regulations, and said the calculation methods should’ve been put into this bill:

For consistency, we would have preferred the calculations and methods for valuing a defined benefit superannuation interest were contained in the primary legislation. The fact that this important detail was released many months after the Bill, and just prior to the Senate Inquiry, made it very difficult for industry to properly consider the detail and likely impact of Division 296.[72]

1.74The committee has also heard from numerous witnesses that the regulations would apply to those on judicial pensions, which could be deemed unconstitutional.

1.75Chairman of KWM Australia, Mr Michael Clough, explained to the committee how the regulations would apply to retired judges:

The way the regulations work under the proposal is that there is an actuarial calculation of the theoretical amount which one would be required to acquire as an annuity to fund the pension, taking into account all the actuarial assumptions from the date of retirement of the judge until under their expected death under the death tables that are part of the regulations. That would require all the usual actuarial inputs, such as investment earnings rates, death rates, spousal death rates and the general discount of earning rates.[73]

1.76Mr Clough referred to the constitutional points at which the tax could be disputed:

… the constitutionality would depend on both section 72 of the Constitution, which refers specifically to federal judicial officers. The other constitutional point would be what I would call the independence of the judiciary.[74]

1.77The Australian Judicial Officers Association (AJOA) submitted that “the proposed Div 296 tax is likely to be unconstitutional in its application to current and retired Commonwealth judges”.[75]

1.78There could be a possible infringement upon Section 72 of the constitution, because the regulations’ taxation of the notional capital value of a judge’s pensions could be interpreted as an effective reduction in judicial remuneration whilst in office.

1.79AJOA referred to a 2006 High Court case to explain how the Constitutional provision in question also applies to judges’ pensions:

The “remuneration”, which s 72(iii) of the Constitution states shall not be diminished during continuance in office, includes non-contributory pension plan entitlements which accrue under the federal judicial pensions statute.[76]

1.80Former Chief Justice of the Federal Court, the Hon Michael Black AC KC, explained to the committee that there could be a scenario where the High Court would have to rule on constitutionality of the regulations, but each of the judges who would have pecuniary interest in the outcome:

That is a reasonable, if frightening, hypothesis. It would have to be out in the open. It would be highly unsatisfactory and should be avoided. If there were some super important, overriding reason why you had to go to that situation, maybe, but it would be awful, and I can't think of any other way in which it could be done under the Constitution.

…

I think it would be an extremely challenging and dreadful situation, and if there is a reasonable argument—as I would contend there is—that this would offend the protective provisions of the Constitution, it should not be done.[77]

1.81Mr Black’s evidence was subsequently supported and reiterated in a letter to the committee from Chief Justice of the Federal Circuit and Family Court of Australia, Mr Will Alstergren, and Chief Justice of the Federal Court, Ms Debra Mortimer, saying that the regulations could “risk being seen as an attack on judicial independence”.[78]

1.82At the public hearing, the Treasury said that they sought legal advice on the constitutionality of the provisions, but had not considered the scenario of a High Court challenge:

We sought legal advice which goes to the provisions of the Constitution and so have considered the risks associated with there being a potential case being brought forward. The design of the legislation is underpinned by that legal advice. We haven't considered the hypothetical scenario of if there happened to be a case brought before the High Court and what might occur in that circumstance…[79]

1.83On notice, the Treasury said they could not comment further on the specifics of that legal advice.[80]

1.84It's absurd and irresponsible that the Government would propose a new tax that could result in a legal challenge to the High Court, in which the judges would have to rule on the constitutionality of a tax applying to their own pensions. The Government has failed to provide clear evidence contradicting the evidence provided by legal experts, current and former judges suggesting these regulations could be unconstitutional.

1.85Labor’s new super tax is another broken election promise. It is rife with issues. It will increasingly capture hundreds and thousands of younger Australians into the future, and it sets a dangerous precedent by taxing unrealised gains which could force those with SMSFs to sell their assets. Furthermore, the tax is designed in a way that will apply differently to the Prime Minister and his senior Cabinet ministers, by putting the application of the tax to defined benefit schemes into opaque regulations instead of primary legislation.

1.86This is another offering of bungled tax legislation from Labor, on par with their undermining of franking credits and their botched multinational tax laws.

1.87That the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023 not be passed; and that Schedules 1 to 3 of Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 not be passed.

Reducing scrutiny of corporate regulators

1.88It’s largely unclear why in the 2023-24 Budget the Government decided to reduce “the frequency of Financial Regulator Assessment Authority reviews from every two years to every 5 years”.[81] The rationale given at the time was that increased expenditure on other Treasury portfolio priorities would be “offset” by reducing the review frequency.

1.89The establishment of a Financial Regulator Assessment Authority (FRAA) was recommended in the final report of the Financial Services Royal Commission in 2019.[82] The Royal Commission noted at the time that the effectiveness of APRA and ASIC in delivering on their mandates was not subject to consistent and independent expert review over time.

1.90In recommendation 6.14, Commissioner Hayne recommended that the FRAA “should be required to report to the Minister in respect of each regulator at least biennially”.[83]

1.91Legislation implementing these recommendations was introduced and passed by the Coalition Government in 2021 through the Financial Regulator Assessment Act 2021.

1.92Several submitters to this inquiry were concerned with the measure, arguing it was a watering down of the Royal Commission recommendations.

1.93In their submission, the Financial Services Council (FSC) said the change in Schedule 5 should be removed from the bill:

Moving the review frequency from two to five years is a considerable watering down on the recommendations of the Royal Commission which flagged several concerns about the conduct of regulators. The FSC holds concern with this extreme reduction in scrutiny and accountability for the regulators and does not support the weakening of the oversight … the FSC recommends that the FRAA legislation component of the Bill be removed to maintain the frequency of the reviews on APRA and ASIC…[84]

1.94At the hearing, the FSC revealed that they “didn’t expect this policy announcement”.[85] The CEO, Mr Briggs told the committee that the winding back of the review cycle was strange and would result in less scrutiny of regulators:

If you think about it—and as it should be—all of the royal commission recommendations are effectively sacrosanct because of the magnitude of the issues that were exposed during that period. If the private sector were to come out and ask to wind back or repeal recent royal commission recommendations that have been implemented, I think there would quite rightly be a very strong public backlash. The idea that one of the ones that scrutinise government agencies is already being wound back is just a strange choice, to be honest, and I think it will have the effect of lessening the scrutiny of regulators when there are areas that the royal commission exposed that are deserving of a high level of scrutiny. So we don't understand the rationale for this. I think, for the industry, it was quite unexpected, but here we are.[86]

1.95In their submission, the Governance Institute of Australia said they were concerned about the change in review frequency, and that there hadn’t been enough time to assess any need for the change:

Governance Institute’s members are concerned about the reduction in the frequency of periodic reviews of APRA and ASIC proposed in the Bill. A key recommendation (Recommendation 6.14) of the Financial Services Royal Commission was biennial reviews of APRA’s and ASIC’s effectiveness in discharging their respective functions and statutory objects capability. Given the review arrangements have only been in force for one review cycle so far (2023), our members consider there has not been sufficient time to assess whether there is a need to changing the review frequency.[87]

1.96Disagreeing with the Government’s proposed change in Schedule 5, the Governance Institute said that “they consider that the current two-year interval is appropriate”.[88]

1.97Associate Professor Dr Andy Schmulow, in his submission to the inquiry, slammed the change as “profoundly wrong-headed and counter-productive” and said that “the savings achieved would be akin to penny wise, but pound foolish”.[89]

1.98Dr Schmulow countered the claim that the biennial review frequency was a “burden” on regulators:

Put differently, the burden on ASIC and APRA from biennial reviews is less important than the burden on consumers and the economy as a result of misconduct, caused in turn by firms emboldened by the view that their actions will attract little or no consequences. For this, and other reasons, it is important to keep the FRAA true to its overarching purpose: expose inefficacy and support enhanced regulator efficacy.[90]

1.99Furthermore, Dr Schmulow noted that having five year reviews risks having enforcement gaps unidentified for long periods of time:

But more importantly, if reviews are conducted at five-year intervals, significant gaps in enforcement will remain unidentified for five years. What will be the impact on consumers and the economy if potentially significant gaps in regulator efficacy are left unaddressed for that length of time? Five years is sufficient to allow very significant forms of harm to arise, and regulator inefficacy to remain unaddressed. These amendments do not address that shortcoming at all.[91]

1.100As evidenced by the current inquiry into ASIC’s enforcement capacity conducted by the Senate Economics References Committee, regulators should be subject to more frequent reviews to improve public confidence, Dr Schmulow argues:

ASIC has struggled to regain the public’s confidence (as evidenced by yet another Senate Inquiry), despite numerous reviews, and numerous bouts of re-organisation. As such ASIC would be better served by more frequent reviews – ones that produce more bite-sized recommendations for ASIC to tackle.[92]

1.101In their appearance before the committee, the Treasury claimed that part of the reason for reducing the review frequency to five years was that “it gives you an opportunity to do a much more thorough inquiry into the operations and effectiveness of those agencies…”[93]

1.102However, the Government has confirmed that the three previous members of the FRAA resigned at the end of the 2022-23 financial year. At the October 2023 Estimates, the Treasury said “essentially, a review was completed of ASIC and a review was completed of APRA, and then, for the remaining three years of the FRAA terms, there were no reviews scheduled”.[94]

1.103At the time, the Treasury said that once the legislation passes the Parliament, they said the government will “appoint a new panel ahead of the reviews that we expect will commence in 2026-27.”[95]

1.104If Schedule 5 is expected to pass the Parliament this year, and the next review is only expected to commence in 2026, five years after the first review commenced in 2021, and a new FRAA review panel has yet to be appointed and is not expected to be appointed until the lead up to the next review, then the argument that a ‘more thorough inquiry’ will occur is brazenly false.

1.105The Treasury has already said that “the FRAA itself is not currently constituted”.[96] If the FRAA will not be doing anything over the next few years, then the claim that they will undertake “more thorough” reviews as a result of this change is unsubstantiated.

1.106At the time of tabling, the Treasury has not provided answers to extensive questions on notice lodged with the Treasury on Schedule 5.

1.107That the amendment to the Financial Regulator Assessment Authority Act 2021 in Schedule 5 of Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 not be passed.

Amendments to the Payment Systems (Regulation) Act

1.108The expansion of the scope of the Reserve Bank of Australia’s (RBA) powers with respect to the payments in Schedule 8 should be handled carefully and subject to appropriate oversight. At the public hearing, the RBA confirmed that schedule 8 would allow them an expanded scope to deal with payments:

The act does empower the Reserve Bank and the Payments System Board to set standards or access regimes that are in the public interest, so there is a power there to make—I guess you could say— subordinate legislation. These do end up being legislative instruments … The power of the Reserve Bank is quite similar, in that it's the power to set standards and access regimes. The scope is what is broadening.[97]

1.109Payments represent a significant policy space crucial to Australia’s economy into the future. Innovation and competition in the payments system will represent numerous opportunities for productivity enhancements in our economy, but also risks. It’s crucial that Parliament can have confidence that the RBA will be able to manage these risks and opportunities.

1.110The Executive should not delegate these material geopolitical and economic matters from the Minister to an agency. The agency is not elected by anyone and is not accountable like a Minister is in our system.

1.111In answers to questions on notice, the RBA said that they do “not have a mandate explicitly to consider competition in the consumer credit market”.[98] Nor have they undertaken analysis on the effect of competition and market concentration in the consumer credit market.[99]

1.112At their appearance before the committee, payments technology company Block expressed concern about RBA’s expanded powers:

…expanding the ability of the RBA to designate and regulate a wide range of payment systems should be done with appropriate guardrails and avoid unnecessary and highly interventionist regulation. This is especially true for sectors that are competitive and innovative and deliver positive outcomes for consumers and merchants. In this context, we are concerned with the lack of guardrails over the proposed expansion of the RBA's remit to include buy-now pay-later products and, in time, the overriding of Afterpay's ability to prevent surcharging.

The RBA has, by design, a narrow regulatory focus when it comes to payments policy. In the case of buy now, pay later there are significant and broader policy implications associated with the RBA's position that Afterpay's merchant contracts should be overwritten by regulation, including competition in the market for consumer credit products and Afterpay's role as a marketing platform connecting consumers and merchants.[100]

1.113Furthermore, Block spoke to the key considerations and factors that the RBA should consider when considering regulatory intervention:

The powers that the RBA has can be highly interventionist, potentially overriding the commercial arrangements that private sector players have put in place and even going as far as regulating price in some cases. So we think these are the matters that need to be considered before you start regulating a new industry like buy-now pay-later: What proportion of payments does that new sector take up in the economy? Is it a dominant form of payment? What is the level of competition like? What other role do these players play in the market for payments?[101]

1.114Block gave evidence that their payment services represent 0.7 per cent of payments in Australia “and three per cent of the entire consumer credit market”.[102] They also argued that Australia has a highly concentrated market when it comes to the credit card industry:

... the big four banks have 93 per cent of the market share of all credit cards in Australia. It's a highly concentrated market, and it's a much more concentrated market relative to comparable economies. The level of concentration in the UK economy, for example, is around 45 per cent by the major banks, versus 93 per cent in Australia.[103]

1.115In their submission, Block said that the RBA should be required to demonstrate a market failure has occurred before intervening:

Using policy levers designed for non-competitive or market failure environments to highly competitive sub-sectors will yield unintended consequences. This approach risks entrenching incumbents, hindering innovation and new entrants, and ultimately leads to poorer outcomes for merchants and consumers.

To safeguard against unintended consequences and ensure regulatory measures are proportionate and effective, regulators should be required to demonstrate that a market failure exists or has occurred before imposing regulations designed to address such instances.[104]

1.116FinTech Australia, in their submission, expressed similar concerns:

Under the proposed changes, the regulatory perimeter for payments is expanded to a far greater range of payment-related functions. Many of these will not have the same market characteristics as those that are currently regulated. As fintechs have emerged, many payment-related functions are becoming highly competitive and dynamic. In these circumstances the same regulatory obligations are unlikely to yield the same results and may have adverse impact on the ability for new entrants to emerge and innovate.

In this sense, adequate oversight mechanisms should be established to ensure accountability and prevent regulatory overreach. This includes formal requirements that show appropriate and analysis about decisions have been undertaken.[105]

1.117To ensure the confidence that we can avoid unintended consequences and unnecessary regulation, then the Parliament must have appropriate oversight over the delegated authority with the power to make these new rules.

1.118At the hearing, the RBA confirmed that any new rules or interventions by the RBA would not be disallowable:

Senator BRAGG: And would that be disallowable?

Mr Connolly: My understanding under the existing legislation is that RBA standards are not disallowable, but could I just invite Troy Gill to speak.

Mr Gill: That's my understanding as well.[106]

1.119In order for the Parliament to have oversight over the RBA’s delegated rulemaking authority, these rules or standards must be disallowable.

1.120This is an important policy space, and the Parliament must have a view here. It shouldn’t be entirely delegated to a regulator.

1.121That the amendments to the Payment Systems (Regulation) Act 1998 in Schedule 8 of Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 be amended so that rules or designations made by the Reserve Bank under the Act are disallowable.

Senator Andrew Bragg Senator Dean Smith

Deputy ChairSenator for Western Australia

Senator for New South Wales

Footnotes

[1]Rachel Clun, ‘PM rules out major changes to super amid tax concessions debate’, The Sydney Morning Herald, 22 February 2023, https://www.smh.com.au/politics/federal/pm-rules-out-major-changes-to-super-amid-tax-concessions-debate-20230222-p5cmho.html (accessed 7 May 2024).

[2]Ellen Ransley, ‘Anthony Albanese reiterates no big changes for superannuation’, News.com.au, 24 February 2023, https://www.news.com.au/finance/superannuation/anthony-albanese-drills-down-on-superannuation-call/news-story/4f741e9fe2c17bbdc6cb00e6ed3adea5 (accessed 7 May 2024).

[3]Mr Adam Hawkins, Acting First Assistant Secretary, Retirement, Advice and Investment Division, Department of the Treasury, Proof Committee Hansard, 18 April 2024, p. 43.

[4]See, for example, SMSF Association, Submission 12, pp. 12-14.; CAANZ, Submission 17, pp. 17-18.

[5]Business Council of Australia, Submission 1, p. 3.

[6]Centre for Independent Studies, Submission 2, p. 2.

[7]Financial Services Council, Submission 5, p. 2.

[8]Dialogue between Senator Bragg and Mr Blake Briggs, Chief Executive Officer, Financial Services Council, Proof Committee Hansard, 18 April 2023, p. 4.

[9]Mr Blake Briggs, Chief Executive Officer, Financial Services Council, Proof Committee Hansard, 18 April 2024, p. 5.

[10]Wilson Asset Management, Submission 8, p. 2.

[11]Wilson Asset Management, Submission 8, p. 2.

[12]SMSF Association, Submission 12, p. 3.

[13]Mr Peter Burgess, Chief Executive Officer, Self Managed Super Fund Association, Proof Committee Hansard, 18 April 2024, p. 17.

[14]CPA Australia, Submission 13, p. 2.

[15]Mr Tony Negline, Superannuation and Financial Services Leader, Chartered Accountants Australia and New Zealand, Proof Committee Hansard, 18 April 2024, p. 8.

[16]Mr Tony Negline, Superannuation and Financial Services Leader, Chartered Accountants Australia and New Zealand, Proof Committee Hansard, 18 April 2024, p. 8.

[17]Mr Phil Broderick, Director and Chair, Superannuation Policy and Technical Committee, Institute of Financial Professionals Australia, Proof Committee Hansard, 18 April 2024, p. 8.

[18]Mr Richard Webb, Superannuation Lead, Certified Practising Accountants Australia, Proof Committee Hansard, 18 April 2024, p. 8.

[19]Mr Richard Webb, Superannuation Lead, Certified Practising Accountants Australia, Proof Committee Hansard, 18 April 2024, p. 12.

[20]Institute of Financial Professionals Australia, Submission 15, p. 4.

[21]National Farmers Federation, Submission 39, p. 3.

[22]Mr Blake Briggs, Chief Executive Officer, Financial Services Council, Proof Committee Hansard, 18 April 2024, p. 3.

[23]Ms Julie Abdalla, Senior Counsel, Tax and Legal, The Tax Institute, Proof Committee Hansard, 18 April 2024, p. 27.

[24]Mr Ross Clare, Director, Research, Association of Superannuation Funds of Australia, Proof Committee Hansard, 18 April 2024, p. 17.

[25]Mr Ross Clare, Director, Research, Association of Superannuation Funds of Australia, Proof Committee Hansard, 18 April 2024, p. 17.

[26]Mr Matthew Linden, Executive General Manager, Strategy, Super Members Council, Proof Committee Hansard, 18 April 2024, p. 17.

[27]Dialogue between Senator Bragg and Mr Adam Hawkins, Acting First Assistant Secretary, Retirement, Advice and Investment Division, Department of the Treasury, Proof Committee Hansard, 18 April 2024, p. 42.

[28]Mr Adam Hawkins, Acting First Assistant Secretary, Retirement, Advice and Investment Division, Department of the Treasury, Proof Committee Hansard, 18 April 2024, p. 43.

[29]Sarah Ison, ‘Treasury unsure how many people will be impacted by super change’, The Australian, 26 October 2023, https://www.theaustralian.com.au/nation/politics/treasury-unsure-how-many-people-will-be-impacted-by-super-change/news-story/14645b8b45b9376d51cb9d895bc56a2c (accessed 7 May 2024).

[30]Dialogue between Senator Bragg and Mr Adam Hawkins, Acting First Assistant Secretary, Retirement, Advice and Investment Division, Department of the Treasury, Proof Committee Hansard, 18 April 2024, p. 43.

[31]Department of the Treasury 003: Answers to Written Questions on Notice asked by Senator Andrew Bragg on 18 April 2024 - (received 7 May 2024).

[32]Department of the Treasury 002: Answers to Questions on Notice asked by Senator Andrew Bragg at Public Hearing on 18 April 2024 in Canberra - (received 3 May 2024).

[33]Various Accountant Witnesses 001: Answers to Questions on Notice asked by Senator Andrew Bragg at Public Hearing on 18 April 2024 in Canberra - (received 2 May 2024), p. 4.

[34]Business Council of Australia, Submission 1, p. 4.

[35]Centre for Independent Studies, Submission 3, Attachment 1, pp. 5–6.

[36]Financial Services Council, Submission 5, p. 2.

[37]Wilson Asset Management, Submission 8, p. 1.

[38]Wilson Asset Management, Submission 8, p. 2.

[39]Institute of Financial Professionals Australia, Submission 15, p. 3.

[40]Mr Jesse Hamilton, Chief Financial Officer, Wilson Asset Management, Proof Committee Hansard, 18 April 2024, p. 4.

[41]Institute of Public Accountants, Submission 10, p. 5.

[42]Institute of Public Accountants, Submission 10, p. 2.

[43]Mr Tony Greco, General Manager, Technical Policy, Institute of Public Accountants, Proof Committee Hansard, 18 April 2024, p. 9.

[44]Mr Phil Broderick, Director and Chair, Superannuation Policy and Technical Committee, Institute of Financial Professionals Australia, Proof Committee Hansard, 18 April 2024, p. 8.

[45]Dialogue between Senator Bragg and Mr Phil Broderick, Director and Chair, Superannuation Policy and Technical Committee, Institute of Financial Professionals Australia, Proof Committee Hansard, 18 April 2024, p. 10.

[46]Various Accountant Witnesses - 001: Answers to Questions on Notice asked by Senator Andrew Bragg at Public Hearing on 18 April 2024 in Canberra - (received 2 May 2024), p. 1.

[47]SMSF Association, Submission 12, p. 11.

[48]Mr Peter Burgess, Chief Executive Officer, Self Managed Super Fund Association, Proof Committee Hansard, 18 April 2024, p. 18.

[49]Various Accountant Witnesses - 001: Answers to Questions on Notice asked by Senator Andrew Bragg at Public Hearing on 18 April 2024 in Canberra - (received 2 May 2024), p. 2.

[50]Certified Practicing Accountants Australia, Submission 13, pp. 3-4.

[51]Institute of Financial Professionals Australia, Submission 15, p. 2.

[52]Financial Regulator Assessment Authority, Effectiveness and Capability Review of the Australian Prudential Regulation Authority, June 2023, p. 5.

[53]Financial Advice Association Australia, Submission 16, p. 3.

[54]Chartered Accountants Australia and New Zealand, Submission 17, p. 13.

[55]Chartered Accountants Australia and New Zealand, Submission 17, p. 13.

[56]The Tax Institute, Submission 20, p. 4.

[57]The Association of Superannuation funds of Australia Ltd, Submission 11, p. 3.

[58]The Association of Superannuation funds of Australia Ltd, Submission 11, p. 3

[59]Actuaries Institute, Submission 6, p. 1.

[60]Department of the Treasury (Treasury), Better targeted superannuation concessions: draft regulations, March 2024, https://treasury.gov.au/consultation/c2024-478149 (accessed 7 May 2024).

[61]Business Council of Australia, Submission 1, p. 6

[62]Mr Blake Briggs, Chief Executive Officer, Financial Services Council, Proof Committee Hansard, 18 April 2024, p. 5.

[63]Mr Tony Negline, Superannuation and Financial Services Leader, Chartered Accountants Australia and New Zealand, Proof Committee Hansard, 18 April 2024, p. 10.

[64]Mr Tony Negline, Superannuation and Financial Services Leader, Chartered Accountants Australia and New Zealand, Proof Committee Hansard, 18 April 2024, pp. 10–11.

[65]Mr Tony Negline, Superannuation and Financial Services Leader, Chartered Accountants Australia and New Zealand, Proof Committee Hansard, 18 April 2024, p. 11.

[66]Mr Phil Broderick, Director and Chair, Superannuation Policy and Technical Committee, Institute of Financial Professionals Australia, Proof Committee Hansard, 18 April 2024, p. 11.

[67]Dialogue between Senator Bragg and Mr Tony Negline, Superannuation and Financial Services Leader, Chartered Accountants Australia and New Zealand, Proof Committee Hansard, 18 April 2024, pp. 11–12.

[68]Mr Phil Broderick, Director and Chair, Superannuation Policy and Technical Committee, Institute of Financial Professionals Australia, Proof Committee Hansard, 18 April 2024, p. 12.

[69]Institute of Financial Professionals Australia, Submission 15, p. 5.

[70]Mr Adam Hawkins, Acting First Assistant Secretary, Retirement, Advice and Investment Division, Department of the Treasury, Proof Committee Hansard, 18 April 2024, p. 44.

[71]SMSF Association - 001:Answers to Questions on Notice asked by Senator Andrew Bragg at Public Hearing on 18 April 2024 in Canberra - (received 2 May 2024), p. 4.

[72]SMSF Association - 001:Answers to Questions on Notice asked by Senator Andrew Bragg at Public Hearing on 18 April 2024 in Canberra - (received 2 May 2024), p. 4.

[73]Mr Michael Clough, Legal Adviser, Private Capacity, Proof Committee Hansard, 18 April 2024, p. 26

[74]Mr Michael Clough, Legal Adviser, Private Capacity, Proof Committee Hansard, 18 April 2024, p. 27.

[75]Australian Judicial Officers Association, Submission 34, p. 4.

[76]Australian Judicial Officers Association, Submission 34, p. 7.

[77]The Hon Michael Black, AC KC, Private Capacity, Proof Committee Hansard, 18 April 2024, p. 30.

[78]Chief Justices Mortimer and Alstergren, Submission 40, pp. 1–2.

[79]Mr Adam Hawkins, Acting First Assistant Secretary, Retirement, Advice and Investment Division, Department of the Treasury, Proof Committee Hansard, 18 April 2024, p. 46.

[80]Department of the Treasury 001: Answers to Questions on Notice asked by Senator Nick McKim at Public Hearing on 18 April 2024 in Canberra - (received 3 May 2024).

[81]Commonwealth of Australia, Budget Measures; Budget Paper No. 2 2023-24, p. 214.

[82]Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Final Report - Volume 1, p. 41.

[83]Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Final Report - Volume 1, p. 41.

[84]Financial Services Council, Submission 5, pp. 2–3.

[85]Mr Blake Briggs, Chief Executive Officer, Financial Services Council, Proof Committee Hansard, 18 April 2024, p. 5.

[86]Mr Blake Briggs, Chief Executive Officer, Financial Services Council, Proof Committee Hansard, 18 April 2024, p. 6.

[87]Governance Institute of Australia, Submission 29, p. 2.

[88]Governance Institute of Australia, Submission 29, p. 2.

[89]Dr Andy Schmulow, Submission 37, p. 2.

[90]Dr Andy Schmulow, Submission 37, p. 5.

[91]Dr Andy Schmulow, Submission 37, p. 6.

[92]Dr Andy Schmulow, Submission 37, p. 6.

[93]Mr Brenton Philp, Deputy Secretary, Markets Group, Department of the Treasury, Proof Committee Hansard, 18 April 2024, p. 41

[94]Mr Tim Baird, Assistant Secretary, Payments System and Financial Innovation Branch, Markets Group, Proof Committee Hansard, 25 October 2023, p. 103.

[95]Mr Tim Baird, Assistant Secretary, Payments System and Financial Innovation Branch, Markets Group, Proof Committee Hansard, 25 October 2023, p. 103.

[96]Mr Tim Baird, Assistant Secretary, Financial System Division, Markets Group, Senate Economics ReferencesProof Committee Hansard, 1 November 2023, p. 4.

[97]Mr Ellis Connolly, Head, Payments Policy Department, Reserve Bank of Australia, Proof Committee Hansard, 18 April 2023, p. 34.

[98]Reserve Bank of Australia - 212: Answers to Written Questions on Notice Asked by Senator Andrew Bragg at Estimates hearing on 15 February 2024 - (received 5 April 2024), p. 2.

[99]Reserve Bank of Australia - 212: Answers to Written Questions on Notice Asked by Senator Andrew Bragg at Estimates hearing on 15 February 2024 - (received 5 April 2024), p. 5.

[100]Mr Michael Saadat, Head, International Public Policy, Block, Proof Committee Hansard, 18 April 2024, pp. 36-37.

[101]Mr Michael Saadat, Head, International Public Policy, Block, Proof Committee Hansard, 18 April 2024, p. 38.

[102]Mr Michael Saadat, Head, International Public Policy, Block, Proof Committee Hansard, 18 April 2024, p. 36.

[103]Mr Michael Saadat, Head, International Public Policy, Block, Proof Committee Hansard, 18 April 2024, p. 38.

[104]Block, Submission 35, p. 7.

[105]FinTech Australia, Submission 22, p. 2.

[106]Dialogue between Senator Bragg and Mr Ellis Connolly, Head, and Mr Troy Gill, Senior Manager, Payments Policy Department, Reserve Bank of Australia, Proof Committee Hansard, 18 April 2023, p. 35.