The entire self-managed superannuation sector is at risk due to the ATO being under-resourced and trustee numbers continuing to grow, according to a financial services analyst.
ATO 'under resourced completely' to deal with SMSFs: analyst
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.”