Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Superannuation Legislation Amendment (Reform of Self Managed Superannuation Funds Supervisory Levy Arrangements) Bill 2013 implements the changes to the self-managed superannuation fund (SMSF) supervisory levy announced in the 2012-13 Mid-Year Economic and Fiscal Outlook.

The SMSF supervisory levy is a cost recovery levy designed to cover the costs of the Australian Taxation Office (ATO) regulating the sector. However, the current levy does not fully recover the ATO’s cost of supervising this rapidly growing and diverse sector.

This Bill will ensure the levy is collected from SMSFs in a more timely way, and will increase the levy to ensure the Taxation Office's costs of regulating the SMSF sector are fully recovered.

To this end, the Bill increases the maximum levy payable by a self managed fund for a year of income from $200 to $300. However, the actual levy payable from the 2013-14 income year will be $259 and this amount will be prescribed in the Regulations.

This Bill also allows for the change in timing of collection of the SMSF levy so that it is levied and paid in the same financial year, rather than the following financial year. The change will ensure consistency with super funds regulated by the Australian Prudential Regulation Authority (APRA), which pay the superannuation supervisory levy in the same financial year it’s levied. The Government considers that this is appropriate for a cost recovery levy.

It should be noted that the lodgement of returns will continue as normal, and the timing of the collection of the levy will be phased in over two years, to give the sector time to adjust.

Accordingly, in 2013-14, SMSFs will pay the $191 levy for the 2012-13 income year, and half the $259 levy for the 2013-14 income year (that is, a total of $321, rounding up).

Then in 2014-15, they will pay the other half of the $259 levy for the 2013-14 income year, and the $259 levy for the 2014-15 income year (or a total of $388, rounding down).

And from 2015-16, funds will pay the $259 levy in the relevant income year. Just to clarify, the amount of the levy payable for a year of income will not exceed the cap, as the total amount payable for 2013-14 and 2014-15 each represents the levy for one and a half years, while the levy for the particular income year will be below the cap.

In addition, I can assure the ATO is working to minimise any compliance costs associated with these measures.

I note that the SMSF levy is intended to help offset the costs of implementing the Government’s SMSF Stronger Super reforms, which aim to improve the operation, efficiency and integrity of the SMSF sector.

This Bill will enhance the ATO’s ability to deliver these important reforms and continue to effectively regulate the self-managed super fund sector.

Finally, as I mentioned before, SMSFs are a rapidly growing and diverse sector. For example, between 30 June 2008 and 30 June 2012, the number of SMSFs increased from almost 376,000 to over 478,000, representing growth of over 27 per cent.

Let’s be clear – the Government strongly supports self-managed superannuation funds. At their core, these reforms are about improving the integrity of the SMSF sector, and providing for better regulation, and ultimately better protection, for fund members.

Full details of the amendments in this Bill are contained in the explanatory memorandum.

Debate adjourned.