Sky News' Peter Stefanovic accuses Labor's super tax reform of falling under 'socialism umbrella' as MP cornered over the bill's long-term effects
Assistant Foreign Minister Matt Thistlethwaite has been forced to defend the Albanese government's proposed superannuation reforms which seek to tax unrealised gains and apply an additional tax on balances over $3 million.
The proposed legislation will apply a 30 per cent tax rate to super balances more than $3 million, including unrealised capital gains.
The $3 million threshold has not been indexed, meaning it will gradually drag more taxpayers into the tax net over time.
The measure has been projected to raise $2.3 billion in the first year and $40 billion over a decade.
Sky News First Edition host Peter Stefanovic pressed the Labor MP on the policy and said it seemed 'unreasonable' and 'totally bizarre' to tax an unrealised gain.
Mr Thistlethwaite said the proposed legislation would only affect a 'very, very small proportion' of people, but was then held to the fact more would be affected by the framework over time as wages increase.
'Essentially, it's an equality argument. We're saying that people shouldn't be able to shift income into superannuation to avoid paying their fair share. Now, if you don't tax it in that manner, then it means that people will simply shift all of their assets into property,' Mr Thistlethwaite said.
Asked why the tax was being put on unrealised gains instead of other kinds of revenue, such as businesses investments, Mr Thistlethwaite repeated it was based on an 'equality argument'.
'The average Australian worker, a nurse, a teacher, a childcare worker, they can't shift much of their income into superannuation to avoid paying their fair share of tax,' he said.
'But that less than one per cent of the population can because they're high-income earners. We don't believe that that's fair. We think that everyone should pay their fair share.'
Mr Thistlethwaite's response attracted scepticism from Stefanovic, who pounced on the 'one per cent' argument.
'I think a lot of economists agree that there's opportunity in super - there is opportunity in super - it's just the idea of taxing something that hasn't happened yet, that's under the socialism umbrella,' Stefanovic said.
Mr Thistlethwaite said if the legislation was not set up in such a way, there was a risk of 'undermining the actual purpose' of why the framework was being put in place.
He said people could simply shift their money into other assets and avoid paying the tax.
Asked who would be affected by the taxable threshold of $3 million in 20 years, Mr Thistlethwaite said 'at the moment, it's less than one per cent of the population'.
Stefanovic repeated the question, to which the Labor Assistant Minister said the government could 'always adjust policies into the future'.
' We did take it to the election, so it's not like we're springing it on people. And it's essentially an equality argument,' he said.
Outgoing Liberal Senator for NSW Hollie Hughes, who joined the panel, said it was 'just unbelievable' the Labor government was coming down on unrealised gains.
'We've now got such a high proportion of our tax system based in income tax. There are ways that it could be reformed,' she said.
' As someone departing the parliament, I hope that the Labor Party, in a similar way that Bob Hawke worked with John Howard, that there was able to be significant tax reform with serious parties of government actually able to work through this constructively. And again not this pie in the sky,' she said.
'I mean, unrealised gains is just unbelievable theft.
'But they're not relying on the Greens to pass this stuff, because if you want socialism, you'll get out and out communism if you let the Greens near it.'
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