Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Hansard source

I thank Senator McKenzie for the question. As senators in this place would know, under prudential requirements all superannuation funds are required to consider diversification in liquidity when making investments, and, if funds are doing this, they should have some liquid assets to meet any tax liabilities. There are a range of cashflow requirements within an SMSF, not just tax liabilities, which trustees must consider. These include, for example, accounting administration costs, investment fees and the costs associated with maintaining real assets, such as property. For SMSFs with balances in the retirement phase, liquidity is also required for the purpose of meeting pension payments, including on those minimum drawdown requirements. Individuals can also hold their assets in super and elect to pay the tax or any tax liabilities they have by using savings outside of superannuation to avoid paying from their business assets.

So, we have been clear on what this change is about. It is for those with high-balance accounts—over $3 million. We know there are accounts with hundreds of millions of dollars in them. Superannuation is primarily about having a dignified retirement and being able to have savings available to you during your retirement years. What we are doing is making a very modest change to the concessional arrangements that remain concessional for those with balances over $3 million. As to individual superannuation advice, I'm not in a position to give it, but I have made clear—