Speaking to SMSF Adviser, Wealth Within’s chief analyst Dale Gilham said the ATO is “struggling” to keep up with its normal tax duties and is “under resourced completely.”
“With SMSFs over the last five years, on top of a GFC, no wonder the tax department can’t’ keep up. And changes to superannuation are just constant,” Mr Gilham said.
“If [the ATO is] not properly resourced, then there’s going to be people getting scammed and there’ll be a meltdown in that SMSF area in some form or other.
“If you don’t have enough resources you’ll get people trying to bend the rules and manipulate the system.”
Mr Gilham also said APRA would be a more appropriate regulator of SMSFs, even if the ATO was given additional resources.
“APRA has been managing superannuation for a long time. They’re already set up to manage superannuation and they understand what it’s all about,” he said.
“Whereas the ATO, it’s the tax office, so what has tax got to do with superannuation? I never understood why [SMSFs] came under the tax office,” he added.
“Adding another thing onto the tax office is just another burden to an over-burdened government organisation anyway.”
The ATO is not the most efficient body or organisation. It now has two roles, that of regulator and that of tax collector. The ATO does a reasonable job of keeping them apart, but it is not perfect. However, what are the alternatives? APRA or ASIC or a separate stand alone organisation?
APRA could not look after approx. 300,000 SMSF’s 15 years ago, let alone more than 500,000 now. I cannot see that position having changed.
ASIC would like to empire build but I cannot see them efficiently regulating SMSF in a way that would be sympathetic to SMSF. I also have doubts that they would be capable.
A separate new organisation. Hoorah, another bureaucracy!, just what this country needs.
I think the ATO does an OK job – a long way from perfect, but not bad enough that we should be seriously looking at alternatives. As mentioned before, funding should not be an issue. They should get more than $150m from SMSF’s in the next year and it will only go up
risk of a meltdown – any evidence of this?
Sounds like vague unjustified commentary seeking change for changes sake rather than understanding the issues, if they actually exist and making the system work.
APRA is not the answer. They were happy to get rid of the SMSF’s when they did because they were not interested in small superannuation funds. A fund of 150 members was considered too small for them in those days and they tried to “strongly suggest” that these small 150 member funds merge with larger funds. They had absolutely no interest in funds of one to four members, which is why it was moved to the ATO.
Remember this is the same APRA that was woeful in having the large funds efficiently rollover member benefits to an SMSF. Does APRA really have a record that engenders confidence that it would be able to look after SMSFs.
Anyone tried to speak to the ATO in regards to the Tax Portal? my firm had technical issues, it took my staff over 3 hours of calls with various departments to obtain a resolution. It was a browser issue. This is an example of the inefficiencies of the ATO. We are taxpayers and don’t we pay a SMSF supervision levy that has tripled in the last few years with over 500,000 SMSFs…..where is the money?
Cheers, Ivan
Do we always have to be repeating the same tired and old arguments?
If anyone wants to know why the ATO is the SMSF regulator then please read the Wallis Inquiry Report, the 1998 Budget Papers and the Explanatory Memorandum of Superannuation Legislation Amendment Act (No. 3) 1999.
It’s important to remember that APRA is a prudential regulator. SMSFs have been designed not to be prudentially regulated.
The ATO isn’t under resourced for its SMSF supervision functions. One of its tasks is to make sure it has appropriate systems and processes in place to cope with the ongoing growth in the SMSF space over the medium to long term.