In their joint submission, the groups argue that "the proposed changes outlined in the exposure draft introduce a distinction between different segments of the superannuation sector in relation to taxation." They further explain that by exempting large APRA-regulated funds from general and specific expenses within the NALI/E regime, a tax differential is created, leading to different treatment for different types of superannuation funds.
This differential treatment raises questions, as the trustees of these funds are subject to the same statutory best financial interests duty, common law fiduciary obligations, and the sole purpose test, making the discrepancy in treatment questionable. The joint submission firmly states that they do not support differential treatment of superannuation funds unless it is absolutely necessary.
It is important to recall that the original purpose of the NALI policy was to impose income tax penalties on superannuation funds involved in non-arm's length transactions. It was not intended to bypass contribution caps or allow members to breach their transfer balance cap, as suggested in the Treasury Consultation Paper released in January this year.
The joint submission made by CPA Australia, Chartered Accountants ANZ, the SMSF Association, the Institute of Public Accountants, and the Tax Institute stands in contrast to the stance taken by organizations representing major superannuation funds. The Association of Superannuation Funds of Australia (ASFA) and the Australian Institute of Superannuation Trustees (AIST) not only support the exclusion of APRA-regulated funds from the NALE regime but also advocate for back-dating that exclusion to 2018.
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