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Liz Westover : Most Recent postings

Liz Westover

Getting it right – taxation in superannuation

15/04/2015 5:36:44 AM by Liz Westover  -  Comments: 0  -  Views: [1929]

The recent release of ‘Re-think’, the Federal Government’s tax discussion paper (or tax white paper as most people are referring to it) has finally opened the door to a holistic look at taxation in superannuation. The constant amendments and announcements over many years by subsequent governments has long been recognized as a significant contributor to undermining the confidence of Australians in our super system. While this Government appears to remain committed to a hand’s off approach to supe...

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Liz Westover

What really is the outcome from misconceptions of SMSFs and tax?

19/03/2015 12:59:12 AM by Liz Westover  -  Comments: 1  -  Views: [1939]

For many years, the self-managed super fund (SMSF) industry has had to fight off many of the myths and misconceptions regarding tax laws in relation to SMSFs. That SMSFs have special tax laws would have to be one of the biggest myths of all time. Unfortunately, it is often perpetuated by those who should know better and have shown a readiness to cast dispersions on the SMSF sector. The flow of funds into the SMSF sector has been a well-documented concern of the larger funds for some time. There ...

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Liz Westover

Heading in the right direction

4/02/2015 10:42:03 PM by Liz Westover  -  Comments: 0  -  Views: [1450]

The question was recently put to me asking what my wishlist was for superannuation in 2015. Specifically, the person wanted to know what one (or two) priorities were on my policy radar for superannuation in 2015. Good question. The Cooper Review in 2010 set the way for significant change in the superannuation industry and this is certainly what has occupied copious amounts of time for me and other industry stakeholders. Advocating, negotiating and consulting on the necessary legislation and then...

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Liz Westover

Changing the super guarantee laws

23/01/2015 12:42:55 AM by Liz Westover  -  Comments: 0  -  Views: [1702]

It was with much excitement and interest that I read through the recommendations from the Board of Taxation’s Review of Tax Impediments Facing Small Business report to Government regarding changes to super guarantee (SG) laws. Chartered Accountants Australia and New Zealand has long advocated a review of the complex, confusing and onerous laws that surround the requirement for employers to make superannuation guarantee contributions for their employees. Fundamentally, a re-write of these laws is...

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Liz Westover

Borrowing in super – not OK?

17/12/2014 3:07:53 AM by Liz Westover  -  Comments: 1  -  Views: [1634]

Most people would be aware of the recommendation arising from the recently released Financial Systems Inquiry (FSI) report to ban direct borrowing by superannuation funds. Depending on where you operate in the superannuation industry, you may have differing views on whether or not this recommendation is reasonable. My concern is that the recommendation may be premature and that further, more thorough analysis is required before the government endorses or rejects the proposal. Chartered Accountan...

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Liz Westover

Why cheap (or free) is not always better

12/11/2014 11:23:26 PM by Liz Westover  -  Comments: 3  -  Views: [1813]

Another wonderful, bells and whistles SMSF setup opportunity crossed my desk this week. Almost irresistible with its free setup, administration and audit for a number of years. Too good to be true? You know what they say about things that sound like this! Sure enough, as I read through some of the details on the offer, the provider really wasn’t doing it for anything even close to free. They were most certainly being remunerated and in ways that the average trustee may not appreciate and may add...

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Liz Westover

Is the price still too high for contributing too much to super?

4/11/2014 10:59:29 PM by Liz Westover  -  Comments: 0  -  Views: [1789]

The treatment of excess non-concessional contributions into super was never fair. No tax law should ever allow an effective tax penalty rate of 93% (or more) to be imposed. It was with great relief that we are now seeing draft legislation to effect change after a commitment from the Federal Government. Under the new proposals, people would be able to withdraw excess non-concessional contributions and any associated earnings from their super instead of being slugged with a potentially massive tax...

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Liz Westover

No super, no pension – you need a plan!

17/10/2014 1:20:17 AM by Liz Westover  -  Comments: 1  -  Views: [1750]

At the recent Chartered Accountants Australia and New Zealand National SMSF Conference, Peter Bobbin from Rockwell Olivier made the following comment in the context of future developments in superannuation, “With no super and no pension until age 70 you will need to work or have a non-super retirement plan” With this statement, I think Peter is spot on. By the time most of us reach 65, there is a high probability that we will not be able to access our super nor will we be able to access the aged...

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Liz Westover

Automating audit judgement

25/09/2014 1:13:57 AM by Liz Westover  -  Comments: 1  -  Views: [1140]

Is it possible that SMSF audits could ever be fully automated? This controversial concept was floated at the recent Chartered Accountants ANZ National SMSF Conference to a suitably sceptical audience. David Smith from Smithink2020 presented to delegates on technology issues for public practice, particularly in the context of servicing the growing self-managed super fund market. It was David who was brave enough to make the statement on automated SMSF audits. While I agree there are certain aspec...

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Liz Westover

Superannuation - Small effort now, big impact in retirement

1/09/2014 10:59:00 PM by Liz Westover  -  Comments: 0  -  Views: [1658]

The thing I like most about MoneySmart Week is the focus and activity that it generates encouraging people to be become more engaged with their own personal financial affairs. The message that is being spread is that it doesn’t necessarily take great effort or lots of excess cash to make a significant impact on your financial wellbeing. Superannuation is a great case in point. Small, regular contributions over a person’s working life can make such an impact on your retirement savings. They can m...

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Liz Westover

Eyes on the future of SMSF

25/08/2014 6:49:54 AM by Liz Westover  -  Comments: 0  -  Views: [1561]

The Chartered Accountants National SMSF Conference is fast approaching and as I start writing my opening address I reflect not only on what’s happened in the SMSF industry in the past 12 months but also what the future might have in store for the SMSF sector. As I gather my thoughts, I look at the lineup of speakers and the issues being discussed and reflect on the topic of one of our speakers (Peter Bobbin) – “The First 100 years of SMSFs, from 1966 to 2066 – where should your focus be?” This t...

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Liz Westover

A considered approach to tax concessions for super

8/08/2014 3:21:47 AM by Liz Westover  -  Comments: 1  -  Views: [1361]

The debate over the distribution of tax concessions in superannuation has heightened in recent months amid the backdrop of the financial system inquiry and impending tax white paper. On the face of it, it is hard to reconcile why high income earners with substantial super balances need to be further incentivised (through tax concessions) to contribute more to their super balances when they clearly have sufficient savings for a comfortable retirement. However, I don’t think the solution is to sim...

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Liz Westover

Lifting the age of access to the aged pension

3/07/2014 12:18:42 AM by Liz Westover  -  Comments: 0  -  Views: [1158]

The Government’s announcement in the May budget to lift the aged pension access age to 70 has resulted in much discussion, with a range of strong views on whether it is appropriate or not. There is a strong argument for this change but perhaps rather than simply lifting the access age, it is time to take a step back and assess our retirement income system as a whole including how superannuation and aged pension interact and what we should be expecting from each. It is widely accepted that we hav...

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Liz Westover

All eyes on low cost SMSF audits

5/06/2014 12:31:02 AM by Liz Westover  -  Comments: 5  -  Views: [6150]

Low cost SMSF audits have been prominent in the media recently following suggestions from the Australian Taxation Office (ATO) that they are targeting this area. Much of the commentary has revolved around the idea that low cost means poor quality. There is no doubt that cost is a risk factor in determining whether a quality audit has been carried out, however we need to be careful that we don’t view a low fee as a definitive indicator of inferior work. These low cost audits have caused much angs...

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Liz Westover

Super Guarantee a certainty

16/05/2014 4:18:54 AM by Liz Westover  -  Comments: 1  -  Views: [1663]

While there weren’t too many changes for superannuation in this year’s Federal Budget, one announcement which has caused quite a stir is the rate of super guarantee. I was really pleased to see that the government confirmed the rate of 9.5% from 1 July 2014. The previously announced deferral of increases did not make it through the legislative process, meaning many employers had not appreciated their legal obligation to pay the increased amount from 1 July this year. The effective further deferr...

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Liz Westover

Raising the pension age

2/12/2013 3:08:58 AM by Liz Westover  -  Comments: 4  -  Views: [2706]

In recent weeks there have been calls from a number of sources for the aged pension access age to be lifted to 70. It’s an interesting proposition. The society we live in has changed in the last 100 years since the aged pension was introduced - people are living longer, they have the capacity to work longer and we now have a super system that ensures working Australians save for their retirement. As a society, we need to ensure that we have a retirement system that is sustainable on a long term ...

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Liz Westover

A New Government, a super change?

4/10/2013 1:37:51 AM by Liz Westover  -  Comments: 0  -  Views: [2077]

As the new government starts to settle in, the super industry has been working through new and outstanding issues that need attention. The Coalition government had previously made a commitment for no unexpected, detrimental changes to super. Their decision to not appoint a specific Minister for Superannuation appears to demonstrate their intent to stick to this commitment, and certainly at this stage, there is every indication that the new government will be looking to honour their pre election ...

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Liz Westover

Should borrowing be allowed in SMSFs?

20/09/2013 12:49:26 AM by Liz Westover  -  Comments: 1  -  Views: [2298]

This week, the Institute held its 4 th National SMSF Conference in Melbourne. The event was a resounding success with amazing feedback from delegates on the high quality technical content and calibre of speakers presenting. We were very appreciative of the regulators contribution to the conference with Stuart Forsyth from the Australian Taxation Office providing his insights into the Self-managed Super Fund (SMSF) sector along with Greg Tanzer, ASIC Commissioner discussing the recently released ...

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Liz Westover

A Super new financial year

28/06/2013 12:23:32 AM by Liz Westover  -  Comments: 0  -  Views: [2262]

Friday, 28th June - at this time of year, the planning has been done, the strategies are in place and the final super contributions have been made. It’s a big day for the accounting profession – the last business day of the financial year. Certainly in relation to super, there are important changes taking effect from 1 July in the new financial year. These changes will impact most Australians, particularly the 0.25% increase in the super guarantee payments from employers. Accountants and their c...

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Liz Westover

Balancing superannuation policy

1/05/2013 12:42:35 AM by Liz Westover  -  Comments: 3  -  Views: [3345]

Today’s timely announcements from Treasurer Wayne Swan and Minister for Superannuation Bill Shorten have put an end to the recent speculation on changes that the federal government may have introduced that would affect the superannuation savings of Australians. Much of the speculation had been wrong. What has been evident over the last few weeks, however, is the deep interest that Australians have in superannuation. Of significance, there were no real wholesale changes announced. In fact, the go...

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Liz Westover

Longevity of retirement savings

31/01/2013 1:11:46 AM by Liz Westover  -  Comments: 1  -  Views: [2250]

There is no doubt that Australia’s retirement income system needs to be sustainable in the long term. We cannot expect the aged pension to support our aging population. We must therefore promote and encourage superannuation savings if Australians are to truly achieve a comfortable retirement. In addition, however we need to assess the longevity of those savings and how they can last well into a person’s retirement. In order to address the longevity issue, some in the super industry have called f...

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Liz Westover

Budgeting for super

23/01/2013 5:57:05 AM by Liz Westover  -  Comments: 0  -  Views: [1743]

That time of year has rolled around again when interested parties put together their suggestions for consideration by the government for inclusion in the Federal Budget. As I gather my thoughts for what I will include in the Institute’s submission on superannuation matters, I am acutely aware of the government’s funding challenges as it prepares the 2013-14 Federal Budget, and that Treasurer Wayne Swan will likely look to superannuation as a source of future revenue and savings. The current tax ...

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Liz Westover

SMSFs, Related Parties and Assets

10/01/2013 11:21:20 PM by Liz Westover  -  Comments: 1  -  Views: [3244]

Next week is the closing date for submissions to Treasury on the new legislation for acquisitions and disposal of certain assets by SMSFs and related parties . This measure came about from a recommendation by Jeremy Cooper and his panel following their review of Australia’s superannuation system. The recommendation made was to require all transactions involving the acquisition and disposal of assets between an SMSF and a related party to be conducted through an underlying market, where one exist...

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Liz Westover

Excess Contributions Tax back on the radar

22/11/2012 11:06:10 PM by Liz Westover  -  Comments: 1  -  Views: [2163]

This week the Inspector-General of Taxation released the terms of reference for a number of reviews his office is undertaking in the next year. One item in particular drew my attention – the review into the Australian Taxation Office’s (ATO) compliance approach to individual taxpayers – superannuation excess contributions tax (ECT) . The Inspector-General’s review will be looking at ECT from an ATO administrative perspective, including matters such as timeliness of assessments, procedures for ve...

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Liz Westover

MYEFO announcement: some relief in super

23/10/2012 1:42:20 AM by Liz Westover  -  Comments: 3  -  Views: [2981]

It was a welcome relief to read through today’s Mid Year Economic and Fiscal Outlook (MYEFO) report. The superannuation industry was not subjected to significant overhaul and the government was restrained in using super as a budgetary tool. In fact, the announcements affecting superannuation were largely sensible and consistent with good public policy. What I was delighted to see was a policy announcement on the tax treatment of assets in pension funds following the death of a fund member. Asset...

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