“There was always the possibility that they would run out of time. There have been some amendments put forward to the bill, which the association has been a part of, and even though the government has the numbers in the lower house, it would not have been a quick passage,” he said.

Burgess spent Tuesday and Wednesday in Canberra in discussions with members of the Senate crossbench and said feedback suggested that if the bill is introduced in its current form to the Senate, the government does not have the necessary crossbench support for it to pass.

“We expect the government will need to work closely with crossbench senators to pass the bill through the Senate,” he said.

“There is still time before the legislation is due to come into play – 30 June 2026 – but what is important at this stage is that we get it right, and there are significant issues with this bill.”

Burgess said the association is still advocating for the removal of schedules 1-3 in the bill or amendments to be made to address the unintended consequences and unfair outcomes.

“No doubt there is some uncertainty [in the sector]. It is looking likely that an election will be called next year, and any bills that have not been passed by that stage will lapse,” he said.

“The Teals will be more important in a minority government, and we know they are not supportive of this tax. I have been informed the government hasn’t had discussions with crossbench senators as yet, and based on our discussions, it doesn’t appear to have the numbers to pass the bill in its current form.

“It is possible the government may offer indexation to secure the required number of crossbench votes. But as we have stressed to the crossbench, while that amendment would be welcomed, it still doesn’t address the taxation of unrealised capital gains.”

Aaron Dunn, CEO of Smarter SMSF, said the fact there is continued dialogue would suggest there is enough support for the concerns that have been raised to be addressed.

“The intention is to remove schedules 1-3, and whether that would occur or whether the government is prepared to make changes is something it will have to work out,” Dunn said.

“The problem now is it is another month of waiting to find out what is going to happen, and the last thing you want is for clients to take any action given the state of flux the legislation is in.”

Dunn said it is a double-edged sword for the sector as the longer the legislation remains in Parliament, there is the potential that things could change.

“I feel that is happening now. The longer it goes on, the more likely there could be some change, and it could be as little as indexation, or it may go back to the drawing board. In some respects, the longer it drags out, the better if an election is called,” Dunn said.

He said the difference between this piece of legislation and the NALI regulations, which took more than five years to finalise, is that the government was then prepared to listen to industry concerns about the unintended consequences of the NALI bill.

“This time, one of the concerns is the by-product of not allowing an adequate period of consultation, and from an industry perspective, we need to flag these things because clients will be impacted by these measures,” he said.

“There are a lot of peripheral issues with this legislation around things like valuation and strategies that shouldn’t end up evolving if they came up with more workable solutions. It is a double-edged sword because you want clarity, but you also want to continue to fight the fight to say this is poorly designed, so if it is going to be introduced, it needs to be workable for everyone in the industry.”

Dunn said Paid Parental Leave was one of the preconditions the Greens insisted the government address if they were to give their support to the Division 296 tax, but the party has now added other conditions off the back of the Senate inquiry into the legislation, including lowering the threshold to $2 million.

“It is in a state of flux at the moment, and it is frustrating in trying to prepare for it, but it is equally positive in so far that all of the pushback from the industry is cutting through,” he said.

Meg Heffron, director of Heffron, said it is becoming frustrating waiting for clarification on the legislation.

“This is an important tax that will influence where people make new investments. They deserve to have some certainty over this now, as many of their decisions will be very long-term. It looks like we’re going to be waiting for a while,” she said.

“One element of the bill is changing the definition of total super balance from 30 June 2025. For some people, not even impacted by Div 296, that will impact contribution plans for next year (and so this year, too). So, it seems outrageous that they have to plan without that information.”