Government in compliance U-turn

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The Government announced this week that it will scrap the related party transaction restrictions, a move heralded by Small Independent Superannuation Funds Australia (SISFA) and SPAA.

SISFA chair Michael Lorimer said they had been fighting against the change ever since it was proposed out of the Cooper Review, calling it an unnecessary “storm in a teacup”. He said that the decision not to proceed with the legislation means SMSFs can carry on business as usual, without extra worries to add to 1 July, 2013.

Lorimer says that they will continue to lobby against anything that singles out SMSFs. “If this measure had proceeded it meant SMSFs would have been subject to these measures but small APRA funds wouldn’t, and neither would large ones… To single out SMSFs particularly with all other regulations and requirements that must be complied with, just didn’t make any sense.

“There’s certainly no empirical evidence to suggest SMSFs were manipulating or abusing the current provisions. We’ve had enough experience over time with policies being introduced based on ‘we think this is happening’ or ‘anecdotally we understand this is occurring’ to know that anecdotal evidence is usually not good enough.”

The proposed legislation would have seen advisers go from organising a standard off-market transfer form when assisting listed share transfers, to having to arrange for the physical sale and repurchase of assets, or to have to go down the path of some crossing orders under the Corporations Act, says Lorimer.

He says advisers will be able to avoid a lot of extra work and a “mad rush between now and June to do certain things, possibly for all the wrong reasons”.

SPAA CEO Andrea Slattery has also welcomed the removal of costly compliance conditions for SMSFs. “We have always advocated a level playing field for all superannuation funds and the retraction of the proposed amendments will help achieve this goal,” she says.