Senator Andrew Bragg, as quoted in Investor Daily, makes some interesting points regarding Industry Funds including that such funds made record donations totalling $12.9 million in the 2021 financial year to trade unions. I’m at a loss to understand how this is not a breach of the sole purpose test. Certainly, an SMSF is precluded from donating, notwithstanding the worthiness of the cause.

Given the current government’s close ties to trade unions it is not surprising that significant double standards are being applied to APRA funds and SMSFs. This is not new, but topical, considering recent events.

The government, notwithstanding significant representations from all the accounting bodies and the SMSF Association, refused to revoke the recent non-arm’s length penalty legislation which is problematic for general expenses and positively draconian for direct expenses. Notably, APRA funds are excluded from the legislation.

The methodology for, and focus of, the proposed tax on earnings over $3m was designed to cater for APRA funds. Strong representations from the SMSF sector were ignored on the basis that measures that would have made the tax less unreasonable were opposed by APRA funds on administrative grounds.

Perhaps if APRA funds were prevented from funding political organisations SMSFs would be treated with more respect?