FAAA and NTAA on proposed treasury amendment

She said: “We feel that it has reduced taxpayer choice, and increased complexity in the system. We do not believe that it should be necessary to build the transitional arrangements around a deemed disposal and reacquisition of existing assets on 1 July 2027.”

“This significantly impacts complexity and directly affects fairness”.

A consequence of the proposed changes, Abood noted, is the unintended tax incentive for investors to do so via Self Managed Super Funds.

“We are concerned that many of them will be convinced to do so via high pressure sales tactics without the benefit of financial advice, without a full understanding of the obligations that they are accepting as trustees of a super fund and without appreciating the risks involved with such strategies”.

The reforms to superannuation switching, Abood continued, are likely unprepared and insufficient to address this risk. In this way, the FAAA recommended confronting this incentive and taking further measures to protect Australian “being the target of unscrupulous operators”, removing some of the restrictions of choice regarding potential CGT changes, and scrapping the minimum 30 per cent tax rate.

While supporting the introduction of the Working Australian Tax Offset (WATO) and Standard deductions, the FAAA also suggested that much of the reform “is subject to the discretion of the Minister and we recommend that greater certainty is provided before the BIll is passed in the Parliament".

The NTAA similarly noted the importance of ensuring measures relating to the Bill and accompanying Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026 “operate as intended and avoid unintended consequences for taxpayers and their advisers”.

On behalf of the NTAA, CEO Geoff Boxer noted: “the combined complexity of the measures - particularly the deemed sale rules and hybrid CGT discount/ indexation model - will impose a significant administrative burden on taxpayers and their advisers”.

In connection, the submission outlined the NTAA’s concerns relating to the extent to which the Bill “defers substantive elements to ministerial determination by legislative instrument” in regards to negative gearing, CGT and the working Australians tax offset.

Leaving definitions up for later determination, it was argued, is likely to have significant impacts on investors; similarly, leaving apportionment and valuation formulas up for debate will negatively affect accountants.

In this way, Boxer also addressed concerns regarding public consultation of the exposure draft legislation, the absence of which, he said, reinforced the need for closer Committee scrutiny.

“Further, although the measures commence from 1 July 2027, the Bill was introduced without period consultation and under a compressed inquiry timeframe (with submissions closing on 9 June 2026, less than two weeks after the Bill’s referral on 28 May 2026), limiting stakeholders’ ability to provide considered feedback on legislation of this complexity,” he added.

“This increases the risk of drafting issues and unintended outcomes, leading to disputes, added compliance costs, and subsequent amendments.”

As such, the NTAA recommended central matters and definitions be included in the primary legislation, remaining legislative instruments be in draft for public consultation prior to registration, and the Committee closely examine the cumulative breadth of delegated powers in the Bill.

The FAAA is scheduled to present at the Senate Economics Legislation Committee public hearing today (16 June) to discuss their submission, before the committee formally hands down its report next week, 22 June.