Super backlash 'doesn't augur well for tax reform'

The Advertiser

2 days ago

The uproar over proposed changes to superannuation tax concessions does not bode well for the government's chances of passing broader tax reform, Treasurer Jim Chalmers says.
First introduced two years ago, the plan would double the concessional tax rate to 30 per cent on the portion of superannuation balances above $3 million.
The policy aims to limit high net-worth individuals from using superannuation as a tax reduction strategy rather than solely for their retirement, as intended.
Over time, this has eroded the government's tax base and undermined the progressive nature of the tax system, with the wealthiest 10 per cent receiving 40 per cent of superannuation tax breaks.
But a concerted campaign to kill the proposal, mounted in some sections the media since Labor's re-election in May, has turned up the heat on the government to change two contentious elements of the plan.
Critics say the policy's introduction of a tax on unrealised capital gains goes against the fundamentals of the tax system and would have unintended consequences, such as driving investment off-shore and threatening Australia's financial stability.
Unrealised gains are 'paper profits' - increases in the value of assets such as properties or shares that haven't been cashed in.
Shadow treasurer Ted O'Brien said it would be a disaster for the economy.
"When it comes to Labor's super tax, there is no reason to be anything but critical. It is an absolute disgrace," he said.
In a full-throated defence of the policy, Dr Chalmers accused the coalition of acting in bad faith and simply wanting to shut down attempts to improve superannuation concessions rather than provide alternative proposals.
"It doesn't augur well for bigger, broader tax reform, when such a modest and methodical change is being resisted in some quarters," he told reporters on Wednesday.
People were lying if they claimed the prime minister or other federal politicians on defined benefits schemes would be exempt from the change, the treasurer said.
The treasurer then took aim at those in the media that have amplified the claims, of which The Australian and The Australian Financial Review newspapers have been the biggest critics.
"We should resist the temptation to think that because overwhelmingly two media outlets don't like this change, to assume that that concern is broadly and deeply felt in the Australian community," he said.
"We're talking about half a per cent of people with superannuation being impacted, people with more than $3 million balances."
The other sticking point is the government's decision not to index the $3 million threshold, meaning more people will get captured by the tax over time.
The Greens support the legislation in principle but have called for the threshold to be lowered to $2 million and indexed in line with inflation.
With the coalition seemingly dead against the plan, securing the support of the Greens is the government's best bet for getting it passed, given they hold sole balance of power in the upper house.
Greens treasury spokesman Nick McKim said he looked forward to constructive discussions with the treasurer.
The uproar over proposed changes to superannuation tax concessions does not bode well for the government's chances of passing broader tax reform, Treasurer Jim Chalmers says.
First introduced two years ago, the plan would double the concessional tax rate to 30 per cent on the portion of superannuation balances above $3 million.
The policy aims to limit high net-worth individuals from using superannuation as a tax reduction strategy rather than solely for their retirement, as intended.
Over time, this has eroded the government's tax base and undermined the progressive nature of the tax system, with the wealthiest 10 per cent receiving 40 per cent of superannuation tax breaks.
But a concerted campaign to kill the proposal, mounted in some sections the media since Labor's re-election in May, has turned up the heat on the government to change two contentious elements of the plan.
Critics say the policy's introduction of a tax on unrealised capital gains goes against the fundamentals of the tax system and would have unintended consequences, such as driving investment off-shore and threatening Australia's financial stability.
Unrealised gains are 'paper profits' - increases in the value of assets such as properties or shares that haven't been cashed in.
Shadow treasurer Ted O'Brien said it would be a disaster for the economy.
"When it comes to Labor's super tax, there is no reason to be anything but critical. It is an absolute disgrace," he said.
In a full-throated defence of the policy, Dr Chalmers accused the coalition of acting in bad faith and simply wanting to shut down attempts to improve superannuation concessions rather than provide alternative proposals.
"It doesn't augur well for bigger, broader tax reform, when such a modest and methodical change is being resisted in some quarters," he told reporters on Wednesday.
People were lying if they claimed the prime minister or other federal politicians on defined benefits schemes would be exempt from the change, the treasurer said.
The treasurer then took aim at those in the media that have amplified the claims, of which The Australian and The Australian Financial Review newspapers have been the biggest critics.
"We should resist the temptation to think that because overwhelmingly two media outlets don't like this change, to assume that that concern is broadly and deeply felt in the Australian community," he said.
"We're talking about half a per cent of people with superannuation being impacted, people with more than $3 million balances."
The other sticking point is the government's decision not to index the $3 million threshold, meaning more people will get captured by the tax over time.
The Greens support the legislation in principle but have called for the threshold to be lowered to $2 million and indexed in line with inflation.
With the coalition seemingly dead against the plan, securing the support of the Greens is the government's best bet for getting it passed, given they hold sole balance of power in the upper house.
Greens treasury spokesman Nick McKim said he looked forward to constructive discussions with the treasurer.
The uproar over proposed changes to superannuation tax concessions does not bode well for the government's chances of passing broader tax reform, Treasurer Jim Chalmers says.
First introduced two years ago, the plan would double the concessional tax rate to 30 per cent on the portion of superannuation balances above $3 million.
The policy aims to limit high net-worth individuals from using superannuation as a tax reduction strategy rather than solely for their retirement, as intended.
Over time, this has eroded the government's tax base and undermined the progressive nature of the tax system, with the wealthiest 10 per cent receiving 40 per cent of superannuation tax breaks.
But a concerted campaign to kill the proposal, mounted in some sections the media since Labor's re-election in May, has turned up the heat on the government to change two contentious elements of the plan.
Critics say the policy's introduction of a tax on unrealised capital gains goes against the fundamentals of the tax system and would have unintended consequences, such as driving investment off-shore and threatening Australia's financial stability.
Unrealised gains are 'paper profits' - increases in the value of assets such as properties or shares that haven't been cashed in.
Shadow treasurer Ted O'Brien said it would be a disaster for the economy.
"When it comes to Labor's super tax, there is no reason to be anything but critical. It is an absolute disgrace," he said.
In a full-throated defence of the policy, Dr Chalmers accused the coalition of acting in bad faith and simply wanting to shut down attempts to improve superannuation concessions rather than provide alternative proposals.
"It doesn't augur well for bigger, broader tax reform, when such a modest and methodical change is being resisted in some quarters," he told reporters on Wednesday.
People were lying if they claimed the prime minister or other federal politicians on defined benefits schemes would be exempt from the change, the treasurer said.
The treasurer then took aim at those in the media that have amplified the claims, of which The Australian and The Australian Financial Review newspapers have been the biggest critics.
"We should resist the temptation to think that because overwhelmingly two media outlets don't like this change, to assume that that concern is broadly and deeply felt in the Australian community," he said.
"We're talking about half a per cent of people with superannuation being impacted, people with more than $3 million balances."
The other sticking point is the government's decision not to index the $3 million threshold, meaning more people will get captured by the tax over time.
The Greens support the legislation in principle but have called for the threshold to be lowered to $2 million and indexed in line with inflation.
With the coalition seemingly dead against the plan, securing the support of the Greens is the government's best bet for getting it passed, given they hold sole balance of power in the upper house.
Greens treasury spokesman Nick McKim said he looked forward to constructive discussions with the treasurer.
The uproar over proposed changes to superannuation tax concessions does not bode well for the government's chances of passing broader tax reform, Treasurer Jim Chalmers says.
First introduced two years ago, the plan would double the concessional tax rate to 30 per cent on the portion of superannuation balances above $3 million.
The policy aims to limit high net-worth individuals from using superannuation as a tax reduction strategy rather than solely for their retirement, as intended.
Over time, this has eroded the government's tax base and undermined the progressive nature of the tax system, with the wealthiest 10 per cent receiving 40 per cent of superannuation tax breaks.
But a concerted campaign to kill the proposal, mounted in some sections the media since Labor's re-election in May, has turned up the heat on the government to change two contentious elements of the plan.
Critics say the policy's introduction of a tax on unrealised capital gains goes against the fundamentals of the tax system and would have unintended consequences, such as driving investment off-shore and threatening Australia's financial stability.
Unrealised gains are 'paper profits' - increases in the value of assets such as properties or shares that haven't been cashed in.
Shadow treasurer Ted O'Brien said it would be a disaster for the economy.
"When it comes to Labor's super tax, there is no reason to be anything but critical. It is an absolute disgrace," he said.
In a full-throated defence of the policy, Dr Chalmers accused the coalition of acting in bad faith and simply wanting to shut down attempts to improve superannuation concessions rather than provide alternative proposals.
"It doesn't augur well for bigger, broader tax reform, when such a modest and methodical change is being resisted in some quarters," he told reporters on Wednesday.
People were lying if they claimed the prime minister or other federal politicians on defined benefits schemes would be exempt from the change, the treasurer said.
The treasurer then took aim at those in the media that have amplified the claims, of which The Australian and The Australian Financial Review newspapers have been the biggest critics.
"We should resist the temptation to think that because overwhelmingly two media outlets don't like this change, to assume that that concern is broadly and deeply felt in the Australian community," he said.
"We're talking about half a per cent of people with superannuation being impacted, people with more than $3 million balances."
The other sticking point is the government's decision not to index the $3 million threshold, meaning more people will get captured by the tax over time.
The Greens support the legislation in principle but have called for the threshold to be lowered to $2 million and indexed in line with inflation.
With the coalition seemingly dead against the plan, securing the support of the Greens is the government's best bet for getting it passed, given they hold sole balance of power in the upper house.
Greens treasury spokesman Nick McKim said he looked forward to constructive discussions with the treasurer.