Time for some parliamentary Drano

From the Editor Darin Tyson-Chan (Inaugural SMSF Association Trade Media Journalist of the Year)

I attend just about every SMSF technical presentation held throughout the year and I know a good number of you, our readers, do too. An update on the regulation and legislative amendments that have occurred recently in the sector is a common and popular topic covered during these sessions.

Now, of course, it’s always useful to get a quick summary of the new rule changes that will govern SMSFs into the future. But there is one element of these seminars I’m getting a little sick of and I’m wondering if you are too.

That is the almost never-changing list of pending legislation yet to be passed. I mean some of these items awaiting formal introduction via legislation have been put on the back-burner since the lead-up to the last election.

Specifically, I’m referring to the amendment to the law that will see an increase in the maximum number of members an SMSF is allowed to have from four to six. When announced it was widely speculated this was a measure to potentially combat Labor’s disastrous franking credit policy proposal.

Well I’m sure I don’t have to remind the federal government there is an election looming that will take place either sometime this year, and if not, definitely in 2022. I would remind Scott Morrison and Jane Hume, though, that if the legislation addressing this change is not passed before then, it means the government will have completed a whole elected term, a time frame of three years, without putting this law in place.

Is that good enough? I think not.

Worse still there are a number of other pending changes to the SMSF and superannuation landscape also stuck treading water. These include allowing 65 and 66 year olds the ability to access the non-concessional contribution bring-forward rules and finalising the method by which exempt current pension income can be calculated.

Add to this list the ATO’s decision to continue to kick the final interpretation of the non-arm’slength expense rules can down the road and we really do find ourselves in a holding pattern when it comes to putting in place effective SMSF strategies to steer funds into the future.

Perhaps the most concerning aspect of this situation is many of the aforementioned items have a retrospective effect either by design or due to the fact the associated implementation dates have now since lapsed. Nothing is more disconcerting than that characteristic.

In Australia when we have a drain or sink blockage, we traditionally get out a can of Drano to have the plumbing systems in question flowing effectively again and I think it’s time to apply the same theory to the blockage of legislation and regulations currently affecting the SMSF sector.

We all know the key to success, SMSF related or not, comes with being able to properly plan for the future. With so many of these legal balls still up in the air, how can advisers and their clients do this?

Human beings crave certainty and it’s time the government and other agencies got their acts together and delivered this aspect to the SMSF sector. Surely they’ve had enough time to do so.