The Treasury Laws Amendment Bill 2023, containing the controversial Division 296 tax on superannuation balances over $3 million has again been left in limbo. The bill was due for debate during parliament’s February sitting, however it was dropped from the agenda.
The bill was initially scheduled for debate in November 2024, but was postponed until February. Now the current government has only one opportunity to reintroduce the bill to parliament prior to the upcoming federal election, with the next parliamentary sitting scheduled for March.
If passed in its current form, Division 296 would impose an additional 15% tax on superannuation balances exceeding $3 million. This could present significant complications for super investment strategies, particularly for self-managed super funds.
It is believed that this bill was dropped due to lack of support, particularly independent senators, with the current government believing they would be unable to pass it without significant reform.
CAANZ chief executive Ainslie van Onselen has widely criticised the bill, claiming that it would unfairly target hard-working Australians.
“It would have captured unrealised gains held in self-managed funds, such as farms and small businesses, and unfairly penalised Australians who have been advised and encouraged to keep their assets in their super funds,” she said.
“For some hard-working Australians, the only way to pay these taxes would be to take out a loan or sell their assets – a frankly ridiculous notion.”
The future of the bill remains unclear and even if tabled during the scheduled senate seating in March, it appears unlikely that it will pass.
