Superannuation tax debate ramps up, Coalition's shadow ministry revealed

Australia Broadcast Center

4 days ago

Welcome back to your weekly federal politics update, where Brett Worthington gets you up to speed on the happenings from Parliament House.
There's been no shortage of "old man yells at cloud" feelings about the government's plans to increase the tax paid on superannuation balances above $3 million.
The hysteria coming from some quarters, most noticeably two daily newspapers, makes it seem like it was a tax that was suddenly sprung on voters after an election.
But this is far from a "there will be no carbon tax under the government I lead" moment.
It's been more than two years since Treasurer Jim Chalmers stood in the prime minister's courtyard at Parliament House to announce a doubling of a tax rate.
The plan was to legislate it but not have it come in for two years, noticeably after the 2025 election.
Currently, the government charges 15 per cent tax on superannuation fund earnings, but only while you are still working and contributing money into it, known as the accumulation phase.
The increase to a tax rate of 30 per cent will apply to accounts with $3 million or more during the accumulation phase.
Treasury estimates around 80,000 people, or 0.5 per cent of super balances, would be hit with the higher tax bracket for every dollar above $3 million.
When he announced the change, Chalmers said one account held more than $400 million in superannuation, a scheme originally designed for people to have a comfortable retirement. He said 17 people had more than $100 million in their account and while the average balance of accounts over $3 million was close to $6 million, the average super balance had just $150,000.
Chalmers introduced the legislation into parliament in November 2023 and it passed the House of Representatives in October 2024 but Labor was unable to find the votes to pass it through the Senate before the election.
Having just been delivered a whopping electoral victory, critics have been quick to hysterics that the government might actually do what it said it would do.
The most contentious parts are that it isn't indexed (meaning the $3 million threshold won't increase with inflation) and that the plan to tax unrealised gains.
There have been no shortage of claims about farmers having to sell their farms or property investors their places because they'll face having to pay tax on assets that have increased in value, even if its only on paper.
Supporters of the tax change say the Chicken Little critics, carrying on as if the sky is falling in, are only behaving like that because they're wealthy individuals who'll have to pay more tax after having long benefited from concessional tax rates.
Tax minimisation, or worse avoidance, is the reason so many of those assets — be it the farm or investment properties — were put into superannuation in the first place.
Labor has faced no shortage of critics for lacking ambition in overhauling not just Australia's taxation system but the broader federal budget, which is heavily reliant on personal income tax.
A failure to implement even the smallest of tax changes has some fearing it will all but kill off any broader ambition to overhaul how the government raises revenue.
Covering the Coalition break up cum make up has been akin to writing recaps of Married at First Sight, except in the case of the Nationals more people watch the reality program than voted for the country party.
Labor too revelled in the chaotic scenes coming from the Coalition, announcing a contentious gas project as the Liberal and Nationals leaders stepped up to announce their parties were getting back together.
The off again, on again antics left no shortage of people wondering what it was all for.
David Littleproud emerged with no shortage of dints in his leadership of the Nationals.
Having not gained the extra cabinet seat he wanted, one of the only tangible thing that emerged from it was the sudden friendship from one-time rivals Barnaby Joyce and Michael McCormack. You know what they say about the enemy of your enemy, but we digress.
Littleproud claimed he had opted for generational renewal in who he appointed to the frontbench. Joyce pulled out the the receipts, eager to point out just how many of the frontbenchers were older than him.
Joyce also said Littleproud need not have rung in him to tell him he wasn't getting a job, telling the ABC he'd already read about it in the papers.
More unorthodox was new Liberal leader Sussan Ley's decision to call every single member of her party. The blokes who preceded her usually just called the victors.
Oh to have been on the call with Jane Hume, undoubtedly the biggest victim in the new-look opposition.
The architect of the disastrous work from home policy, Hume received a call from Ley to learn she'd be working from the backbench, joining fellow former shadow cabinet members Sarah Henderson and Claire Chandler.
An unhappy Henderson was quick to say high-profile women were being overlooked. Earlier in the week she'd derided former leader Peter Dutton for being too focused on cost of living in the campaign (others would argue that was the least of the disastrous campaign's problems).
Female representation in the shadow cabinet has undoubtedly gone backwards since the last term.
Ley pointed to the promotion of new women to the outer ministry as a sign of renewal coming through the ranks.
"This is their first step, but it's far from their last," she said.
Ley rewarded those who supported her bid for leadership, while also keeping senior conservatives in high profile roles, even if not in the job they were asking for.
James Paterson made no secret of his desire to stay in a national security role but was moved to finance, replacing Hume, while Andrew Hastie, who wanted a social or economic portfolio, replaces Paterson at home affairs.
Ley also appointed Tim Wilson and Giselle Kapterian to roles despite recounts playing out in their seats.
"Gisele's appointment is a vote of confidence in the future of women in our party and it's a clear message to communities, like Bradfield, that if you support your local Liberal member, they will have a direct say in the decisions that change the direction of this country," she said.
Labor's post-election honeymoon, which to date has seen a RBA rate cut and a Coalition implosion, saw the good news continue to flow at the start of the week with confirmation it had just elected Australia's youngest ever senator, South Australian Charlotte Walker whose 21st birthday was election day.
The party also picked up an extra senate seat in Victoria and the ABC is projecting the party will retain the Melbourne seat of Calwell, meaning Labor didn't lose a single seat in the election.
After facing a nervous wait, Tasmanian Jacqui Lambie held off a challenge from Labor and One Nation to retain her Senate seat.
With the NSW race yet to be called, Labor is on track to win 29 seats in the upper house, meaning the Greens are the only crossbenchers needed to pass legislation. It could have got as high as 30 but Labor lost the final WA senate seat to One Nation, taking Pauline Hanson's ranks to three.
It hasn't all been smooth sailing for the good ship Albanese.
The factional warlords who oversaw Ed Husic's demise from the cabinet are getting a reminder of just how useful MPs can be from the backbench (RTYI Jane Hume).
Initially opting for an opinion piece in Guardian Australia, the former industry minister criticised his own government for its response to Israel blocking aid getting into Gaza.
By Monday, Albanese was offering his strongest criticism of the Israeli government.
He said Israel's "excuses and explanations" for blocking aid were untenable and "completely unacceptable" and "an outrage".
While Husic was calling for Australia to call in Israel's ambassador, privately the government insisted that was unnecessary given the prime minister had gone a step further and raised his criticisms direct with the country's president when the two men were in Rome recently.
Albanese's approach to contentious foreign affair issues has been to step out with leaders of like-minded nations, especially Canada and New Zealand.
Husic was quick to note that didn't happen this time when the UK, France and Canada threatened to impose sanctions on Israel.
While praising the PM for speaking out, he insisted now was the moment for actions, not just words.
No longer bound by collective responsibility and cabinet solidarity, Labor's leaders are getting a reminder of the consequences of kicking someone unafraid to use their voice outside of the tent.