In an article for the web blog The Australian, Robert Gottliebsen discusses the caustic attacks being made on the SMSFs from all directions and believes that hard-hit industry funds and politicians holding vested interests should stop playing the dirty politics of spreading unfounded rumours.
SMSF according to politicians
Gottliebsen feels that the politicians have no clue to what’s actually happening in the SMSFs and this often results in wrong news being flashed about the ‘self-managed’. As an instance, if a big case is made about people ending with insufficient funds during retirement, media and politicians should also go to the depth of examining that the same SMSF allows for various asset-income tests to ensure maximised government pension. Media has got great powers but it should not use its powers irresponsibly.
Gottliebsen narrates an ‘outlandish claim’ by a paper which alleged that SMSFs evade taxes by adopting dividend washing strategies. What they forget is that the dividend franking privilege is not only open to SMSFs, but can be used by all local investors; the arc spread over all kinds of Supers.
Claims of favouritism towards SMSFs
There are too many of us who cringe about lenient tax regime of SMSFs and their environment of high borrowings and poor regulation. Gottliebsen boots home his point by giving an example where the Treasury functioning under the then Labour Government claimed that Super cost $30 billion to the nation. Interestingly, this figure they eventually arrived at used the summation of two figures which the Treasury’s researches had clearly asked not to be added. In addition, the Treasury, in its pursuit of maligning the SMSFs, added extremely high returns which was just not the case.
You can read the original article here.
In my opinion, SMSFs have played it very fair till date and the industry and retail funds are quite unhappy about the whole deal because in a very short span since the GFC, the SMSFs have taken a large share out of their pie.
Prudential regulation irrelevant for the SMSF sector
Yes, regulation has been a cause for concern but in a low-level processing environment like the SMSF, prudential regulation is not required. What is needed are efforts not to let the dubious elements creep in. Case in point being SMSF recommendations made by those real estate agents who are not licensed by the Australian Financial Service (AFS).
Why do you feel SMSFs have been able to outdo industry funds in such a short time?