Recent data from the Australian Taxation Office (ATO), which would appear to show a large decrease in the establishment of new self-managed super funds (SMSFs), is misleading, experts say.
SMSF Academy managing director Aaron Dunn said the figures, which reveal 5,840 SMSFs were established in the March 2013 quarter – the least of any quarter in the past five years – contain a traditional time lag.
There is a 60-day timeframe within which a new SMSF will become regulated by the ATO, and as a result, the figures published initiallly for previous quarters were subsequently upgraded quite significantly.
Mr Dunn pointed out that the original figures for the previous quarter, December 2012, showed 7,014 establishments, but this was later upgraded by almost 40 per cent to 9,748.
There was also a 40 per cent upgrade to the original 8,183 SMSFs nominated as established in the September 2012 quarter, to 11,466. The June 2012 quarter saw a massive 60 per cent increase on the originally listed 7,197 establishments, to 11,610, according to Mr Dunn.
He estimated the true figure for establishments within the March quarter as being closer to 8,000, and said “on good authority” that the ATO expects around 48,000 new SMSFs to be established for this financial year, a significant jump on previous years.
Tria Investment Partners managing partner Andrew Baker was scathing of recent media coverage suggesting a drop in SMSF growth due to government super tinkering, describing reports as “breathless” and the interpretation as “simply not true”.
In his most recent Trialogue update, Mr Baker stated that even the ATO doesn’t yet know how accurate those numbers are. “That’s because the numbers the quarterly reports are based on are just estimates, based on data which is most likely nearly two years old,” he wrote.
“Frankly we don’t know why the ATO bothers with publishing quarterly data, given its outputs could be criticised as being anywhere between heroic and misleading. Gospel it is not,” Mr Baker said.
“The facts are that there is only one really useful and representative source of truth when it comes to SMSF data, and that is SMSF annual tax returns.”
Even those returns are lacking in terms of capturing a “broad swathe” of SMSF data, especially around things like asset exposures, Mr Baker said, while also pointing to the time lag involved in reporting.
“So the idea that the ATO is publishing accurate March 2013 SMSF data is simply preposterous. It’s probably still based on June 2011 data at the moment,” Mr Baker said.