‘Abuse of power': Chalmers seeking to bypass parliament and impose little-known clause to ‘unilaterally' expand super, unrealised gains tax

Sky News AU

4 days ago

Opposition Leader Sussan Ley has said the Albanese government cannot be trusted after it was discovered Treasurer Jim Chalmers had embedded an arcane provision within the super, unrealised gains tax legislation that would allow the government to expand the policy after it passes parliament.
Labor's plan to hike the tax rate from 15 to 30 per cent on super accounts with over $3 million has caused widespread uproar, with fund managers, economists and union bosses joining forces to fiercely denounce the policy.
Industry magnates have argued the policy would alter the behaviour of the entire superannuation industry and spark frantic mass sell offs despite the government claiming it would only impact a small portion of Australians.
The government's plan to target unrealised capital gains, which are profits made before the asset is sold and its refusal to index the threshold has also sparked alarm, with critics stating the policy is both reckless and unprecedented in nature.
However, in a major development in The Australian that the Treasurer has embedded a clause deep within the legislation which would allow him to make modifications to the policy after it passes parliament.
Section 296-60, dubbed a Henry VIII clause would give Mr Chalmers special powers to alter the bill as he sees fit without parliamentary oversight, with some political theorists labelling the move unconstitutional.
The potential modifications could include the Treasurer increasing the number of individuals impacted by the tax, whether a superannuants interest is in retirement phase, if the interest of an individuals superannuation is a defined benefit interest and removing exemptions for certain superannuation funds.
Opposition Leader Sussan Ley labelled clause as 'ridiculous' and said the government was saying one thing but doing another.
'Revelations today that sneaky Jim Chalmers is adding extra measures to this taxation proposal that will allow Labour to raise the rate in the future, is ridiculous and it offends every principle of our taxation system,' Ms Ley told reporters in Sydney on Thursday.
'How can you actually trust this government with a measure which allows them to raise the rate if and when they choose without consultation from the Australian parliament and the Australian people.'
Ms Ley said the policy and the imposition of the provision 'should offend every single Australian.'
Meanwhile, Director of Research at the Institute of Public Affairs Morgan Begg denounced the implementation of an executive clause within the policy and said the move was 'an extraordinary abuse of power.'
'It is an extraordinary abuse of power for the Treasurer to be given the power to change laws as he sees fits without the consent of parliament,' Mr Begg said.
'If the Treasurer supposedly needs this extraordinary power to change the law to smooth over unintended consequences, this itself confirms the proposed law is fundamentally flawed.'
Mr Begg also drew attention to a section of the legislation that would enforce different laws for different people and reiterated that this undermined fundamental democratic practices.
'What's worse is that the proposed bill explicitly allows the Treasurer to make changes to the law 'in relation to an individual in different ways' meaning different people could be subject to different laws, violating the most basic principles of the rule of law,' Mr Begg said.
'Unilaterally granting powers to amend this law, according to the tax revenue being brought in, shows this as nothing but a brazen tax grab by the federal government.'
The clause will also severely limit the influence of the Greens who the government needs to work with to pass the legislation in the Senate, with Mr Chalmers now able to freely amend or redact negotiated amendments.
The policies threshold, which is currently set at $3 million could also be amended after the fact by the Treasurer.
Mr Chalmers has not directly provided a justification for imposing the contentious clause, but it is understood his office views the provision as routine procedure to ensure that necessary changes can be swiftly made to legislation if need be.
Treasury predicts the tax will generate $2.3 billion in its first year and over $40 billion over the next decade.