Another budget has landed. And whilst you don’t expect a pre-election budget to include major shake-ups, this year’s budget feels a little like the school assignment I left to the last minute – handed in but hastily put together.
There wasn’t anything new in the Budget about superannuation, but there was also no mention of existing proposals either.
Importantly there was no revision made with regards to the Government’s proposed Division 296 tax. No changes were proposed to the revenue it is expected to raise or the timing of its commencement.
Whilst the proposed change to the definition of total superannuation balance included in the Division 296 bill is a sensible one (including updating the valuation methodology of defined benefit interests from 30 June 2025), this change is only expected to be legislated if the bill is passed in its entirety.
We still await progress of the bill in the Senate, which after tomorrow, is not due to meet until May. If an election is called before the measure is passed, the bill will lapse and would need to be reintroduced into parliament after the election.
We continue to await a relaxation of the residency requirements for self-managed superannuation funds. Whilst the Government previously reaffirmed its commitment to extending the safe harbour rule for the central management and control test from two to five years and removing the active member test, draft legislation has yet to be introduced. Given these changes could be implemented relatively quickly and easily, it remains perplexing why they haven’t yet been addressed - bigger fish to fry I suppose.
There was mention of setting aside funds to further improve Australia’s business registers including linking Director ID numbers to ASIC’s Company Register and further funding for the ATO to continue its program of ensuring the timely payment of tax and superannuation liabilities by medium and large businesses. But as far as budget nights go, it was a quiet one, without surprises but what one would expect ahead of an upcoming election.
If you haven’t already registered, join us this afternoon for our Post Budget Webinar where we’ll unpack what this means for Div 296 and have a look at the super policy positions of the major parties ahead of the calling of the election.