commentary<\/a>, while academically sound, underplays the practical harm this policy will cause. Let me be clear: Division 296 sets a dangerous precedent, and it fundamentally misunderstands what superannuation is \u2014 and what it is not.<\/p>\nSuper is not a piggy bank for Treasury<\/p>\n
The idea that superannuation is somehow being abused by the wealthy \u2014 that it\u2019s a tax haven that needs reigning in \u2014 is an oversimplified narrative. Yes, super comes with tax concessions. But these were not designed as a gift. They were an incentive. A promise. A contract between individuals and government: lock your money away for decades, and in return, we\u2019ll give you a stable, tax-effective environment to grow your retirement savings.<\/p>\n
Now, with Division 296, the rules are being changed mid-game \u2014 and not in a small way. Taxing unrealised gains breaks the fundamental principle of fair taxation: you pay tax on income or capital gains you\u2019ve actually received. Anything else is not just unprecedented \u2014 it\u2019s unjust.<\/p>\n
A tax based on fantasy numbers<\/p>\n
Dr. Peng mentions that only a “minority” of SMSF members will struggle with liquidity under this policy. But let\u2019s call that what it is: academic minimisation. That \u201cminority\u201d still represents thousands of Australians who followed the rules, planned responsibly, and now face the possibility of being taxed on paper profits they may never realise.<\/p>\n
In the real world \u2014 not the modelling rooms of Treasury \u2014 property markets fluctuate, share prices drop, and assets are illiquid. Forcing retirees to sell property, unwind long-term investments, or scramble for external cash just to pay a theoretical tax bill is more than inefficient \u2014 it\u2019s reckless.<\/p>\n
Equity? Or envy?<\/p>\n
The government frames this as a fairness issue. But fairness is not about punishing people because they\u2019ve done well. It\u2019s not about shifting the goalposts because you\u2019re chasing short-term budget wins. Division 296 is not about fairness \u2014 it\u2019s about revenue. Let\u2019s not pretend otherwise.<\/p>\n
The \u201cequity\u201d argument collapses when you consider that wealthy retirees already pay 15% tax on their accumulation accounts, and the estate pays capital gains tax when those assets are eventually sold. To say that super can be used to \u201cdefer tax indefinitely\u201d is misleading \u2014 and frankly, disingenuous.<\/p>\n
Administrative simplicity? At what cost?<\/p>\n
Another point raised is administrative simplicity \u2014 that it\u2019s easier to tax unrealised gains than to track when assets are sold. Yes, it\u2019s easier. But so is taking people\u2019s money upfront rather than waiting for them to earn it. Simplicity should never trump justice.<\/p>\n
Requiring annual revaluations of unlisted and illiquid assets isn\u2019t simple. It\u2019s complex, costly, and subject to manipulation. It will create inconsistencies, increase disputes, and force super funds \u2014 especially SMSFs \u2014 to divert resources away from investing and toward compliance.<\/p>\n
The true purpose of super<\/p>\n
Let\u2019s not forget: many SMSF trustees do not see super simply as a \u201cretirement income stream.\u201d They see it \u2014 rightly \u2014 as an intergenerational wealth structure. Why? Because retirement is not just about the day you stop working. It\u2019s about financial security, family support, and yes, legacy. Are we really saying that the moment someone accumulates more than an arbitrary threshold \u2014 $3 million \u2014 their financial planning becomes morally suspect?<\/p>\n
Dr. Peng argues that super should not become a \u201ctax-free inheritance vehicle.\u201d But super is not tax-free. And inheritance is not a dirty word. Australia has no inheritance tax \u2014 do we now intend to backdoor one through super policy?<\/p>\n
The slippery slope has already begun<\/p>\n
Make no mistake: once you open the door to taxing unrealised gains \u2014 even for a small group \u2014 it will not stop there. Division 296 is the beginning of a broader shift toward pre-emptive taxation. If this precedent takes hold, who\u2019s next? Property investors? Business owners? Everyday Australians with volatile assets?<\/p>\n
I do not deny that reforms are needed in superannuation \u2014 transparency, caps, and reasonable limits are all part of a fair system. But taxing fantasy gains is not reform. It\u2019s desperation disguised as progress.<\/p>\n
Division 296 is not about fixing the super system. It\u2019s about breaking the rules of tax fairness to plug budget holes. We should be very clear-eyed about that \u2014 and resist it with everything we\u2019ve got.<\/p>\n
Nazneen Randeria is a registered SMSF auditor, and the managing director of Reliance Auditing Services.<\/p>\n","protected":false},"excerpt":{"rendered":"As someone who has spent decades helping Australians navigate the complexities of superannuation and wealth building, I find…\n","protected":false},"author":2,"featured_media":149459,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,131,132],"class_list":{"0":"post-149458","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/149458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=149458"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/149458\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/149459"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=149458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=149458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=149458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}