The Tax Institute welcomes the opportunity to make a submission in response to the call by the Minister for Housing and Assistant Treasurer, the Hon Michael Sukkar, on 6 December 2021 for such submissions from individuals, businesses, and community groups on their views regarding priorities for the Federal Budget 2022–23.
In addition to the matters raised in our 2021–22 submission, we wish to bring to the Government's attention, several significant issues within our tax and superannuation system. Key among these are the anomalous outcomes resulting from changes to the superannuation non-arm's length income provisions. These changes have the potential to improperly and unfairly impact superannuation members and their balances. Further, the myriad of superannuation caps and thresholds, along with the approach to proportional indexation of the transfer balance cap, have created a system which discourages, and in certain cases, penalises, saving in superannuation. These provisions require urgent reform to ensure our superannuation system can best support Australians saving for, and transitioning into, retirement.
We also draw to the Government's attention certain steps that can ensure that the tax system can better support those in greatest need of assistance. In this regard, further support beyond existing funding levels of the National Tax Clinic program should be prioritised. The National Tax Clinic program plays an important role in providing advocacy and assistance for vulnerable taxpayers. However, the estimated number of people who need assistance is far greater than that for which the program is able to accommodate.
We urge Government to act on our recommendations and work towards creating a sustainable tax system that promotes efficiency, simplicity and equity.Â