This fuss about taxing megaprofits on super is awful, vulgar and grasping

The Advertiser

4 days ago

Look, I love comfort as much as the next person. I want fancy Boomer holidays. I also wish to spoil my grandchildren rotten (partly because there is nothing more hilarious than incurring the wrath of my actual children).
But the fuss about the new tax on megaprofits on super is awful, vulgar and grasping. No one needs to have more than $3 million in their superannuation accounts. Anyone who does, can afford to pay more tax than they already do. And maybe taxing the investment income of super funds at a flat rate of 15 per cent before retirement and zero after retirement isn't doing much to stem the tide of wealth inequality in Australia.
Here's what's happening. About two years ago, Treasurer Jim Chalmers announced a plan to increase the tax rate on super annual earnings for balances exceeding $3 million from 15 per cent to 30 per cent. The tax would apply only to the earnings of the amount above $3 million. So it's not like these poor darlings will be slugged for earnings on the whole amount.
I asked Miranda Stewart, professor of law at the University of Melbourne Law School, about what she thought of the fuss. As ever, calm and clear in her response.
"We aren't banning people from having more than $3 million in super. They can keep it. It's only a slice above the three million," she says.
Would she be grumpy if she was in that category?
"I would be delighted if I had more than three million in my super fund. I'd be happy. This change would not really make me miserable."
The existence of superannuation is a gift from god, aka Paul Keating. It was supposed to improve the budget bottom line by reducing age pension costs. They are projected to fall from 2.3 per cent to 2.0 per cent of GDP over the next 40 years, compared to the OECD, which is predicted to rise to 10 per cent by 2060. But at a high cost - tax breaks for superannuation cost about $50 billion a year and will soon exceed the cost of the pension.
Longtime economics guru Ross Gittins was scathing this week about rich men wanting to stay rich. Fair enough and absolutely right. But what I'm missing from this conversation - entirely - is anyone from the richy riches thinking about others. Where are the richy riches when it comes to those on welfare? Where are they when we talk about raising the rate for those on welfare, for example? Why aren't the wealthy championing the cause of the poor?
Or as Cassandra Goldie, longtime CEO of ACOSS, told me this week:
"We would welcome a greater level of outrage about the failure to fix the adequacy of Jobseeker and Youth Allowance, which condemns people to live in terrible poverty."
Me too.
Now you'd be forgiven for thinking we are killing their darlings for the fuss that's gone on. The pamphlet for the wealthy, The Australian Financial Review, has had a field day. In summary, it's just plain cruel to tax the rich. It reminds me of the goings-on before the 2019 election, when Labor took real tax reform to the people and was roundly rejected after a successful scare campaign from the then member for Goldstein, Tim Wilson, and his family member, Geoff, a fund manager. Stewart tells me I'm being a bit mean - the proposed changes then would have affected more people than the one being suggested now. Still, there is always resistance when people think they have something to lose. Now it turns out the Wilsons have joined forces again to do battle on this proposal.
Real tax reform is hard because the people who don't want it are self-interested. We all are, to some extent. But being self-interested to the point where you don't care whether some people eat or die, that's shocking to me.
MORE JENNA PRICE:
For years now, the Australian Council of Social Service has been campaigning to raise the rate of payments made to those in need. So I asked the ACOSS team about their response to the complaints made by the uberwealthy.
The proposed tax change would very modestly slow the accumulation of riches that would otherwise flow to already wealthy men. Is that me being sexist? By no means. ACOSS tells me that the people with those huge balances are pretty much all men. Also, tax breaks for super cost $50 billion a year, almost as much as the age pension. I'd prefer more of that $50 billion to be in favour of all those payments which help people lead lives that aren't crushed by hunger, freaked out by rental payments.
As Goldie says: "This is a modest measure that barely touches the sides of some of the most inequitable and outrageous tax breaks in this country, egregiously generous tax breaks for people who will never need to rely on the age pension."
Forgive me if you know this, but superannuation is a tax shelter. You pay less tax on superannuation than you do on normal earnings. Previous Coalition governments allowed Armaguard (OK, maybe not them specifically) truckloads of money to be deposited into super accounts. That's now been stopped, fortunately. Surprisingly, it was the Morrison government that ended the lurk.
I'm not exactly sure how people get to be rich. What I do know is that some of them do not exhibit traits such as kindness or generosity (unless it's to a charity of their choice where they can bask in reflected glory). I'm also not sure how we can make the best tax policy in this country and maybe this proposed reform is just tinkering at the edges. But according to Gittins and a whole bunch of others, just 80,000 people will be impacted by these changes.
They can live with it.
Look, I love comfort as much as the next person. I want fancy Boomer holidays. I also wish to spoil my grandchildren rotten (partly because there is nothing more hilarious than incurring the wrath of my actual children).
But the fuss about the new tax on megaprofits on super is awful, vulgar and grasping. No one needs to have more than $3 million in their superannuation accounts. Anyone who does, can afford to pay more tax than they already do. And maybe taxing the investment income of super funds at a flat rate of 15 per cent before retirement and zero after retirement isn't doing much to stem the tide of wealth inequality in Australia.
Here's what's happening. About two years ago, Treasurer Jim Chalmers announced a plan to increase the tax rate on super annual earnings for balances exceeding $3 million from 15 per cent to 30 per cent. The tax would apply only to the earnings of the amount above $3 million. So it's not like these poor darlings will be slugged for earnings on the whole amount.
I asked Miranda Stewart, professor of law at the University of Melbourne Law School, about what she thought of the fuss. As ever, calm and clear in her response.
"We aren't banning people from having more than $3 million in super. They can keep it. It's only a slice above the three million," she says.
Would she be grumpy if she was in that category?
"I would be delighted if I had more than three million in my super fund. I'd be happy. This change would not really make me miserable."
The existence of superannuation is a gift from god, aka Paul Keating. It was supposed to improve the budget bottom line by reducing age pension costs. They are projected to fall from 2.3 per cent to 2.0 per cent of GDP over the next 40 years, compared to the OECD, which is predicted to rise to 10 per cent by 2060. But at a high cost - tax breaks for superannuation cost about $50 billion a year and will soon exceed the cost of the pension.
Longtime economics guru Ross Gittins was scathing this week about rich men wanting to stay rich. Fair enough and absolutely right. But what I'm missing from this conversation - entirely - is anyone from the richy riches thinking about others. Where are the richy riches when it comes to those on welfare? Where are they when we talk about raising the rate for those on welfare, for example? Why aren't the wealthy championing the cause of the poor?
Or as Cassandra Goldie, longtime CEO of ACOSS, told me this week:
"We would welcome a greater level of outrage about the failure to fix the adequacy of Jobseeker and Youth Allowance, which condemns people to live in terrible poverty."
Me too.
Now you'd be forgiven for thinking we are killing their darlings for the fuss that's gone on. The pamphlet for the wealthy, The Australian Financial Review, has had a field day. In summary, it's just plain cruel to tax the rich. It reminds me of the goings-on before the 2019 election, when Labor took real tax reform to the people and was roundly rejected after a successful scare campaign from the then member for Goldstein, Tim Wilson, and his family member, Geoff, a fund manager. Stewart tells me I'm being a bit mean - the proposed changes then would have affected more people than the one being suggested now. Still, there is always resistance when people think they have something to lose. Now it turns out the Wilsons have joined forces again to do battle on this proposal.
Real tax reform is hard because the people who don't want it are self-interested. We all are, to some extent. But being self-interested to the point where you don't care whether some people eat or die, that's shocking to me.
MORE JENNA PRICE:
For years now, the Australian Council of Social Service has been campaigning to raise the rate of payments made to those in need. So I asked the ACOSS team about their response to the complaints made by the uberwealthy.
The proposed tax change would very modestly slow the accumulation of riches that would otherwise flow to already wealthy men. Is that me being sexist? By no means. ACOSS tells me that the people with those huge balances are pretty much all men. Also, tax breaks for super cost $50 billion a year, almost as much as the age pension. I'd prefer more of that $50 billion to be in favour of all those payments which help people lead lives that aren't crushed by hunger, freaked out by rental payments.
As Goldie says: "This is a modest measure that barely touches the sides of some of the most inequitable and outrageous tax breaks in this country, egregiously generous tax breaks for people who will never need to rely on the age pension."
Forgive me if you know this, but superannuation is a tax shelter. You pay less tax on superannuation than you do on normal earnings. Previous Coalition governments allowed Armaguard (OK, maybe not them specifically) truckloads of money to be deposited into super accounts. That's now been stopped, fortunately. Surprisingly, it was the Morrison government that ended the lurk.
I'm not exactly sure how people get to be rich. What I do know is that some of them do not exhibit traits such as kindness or generosity (unless it's to a charity of their choice where they can bask in reflected glory). I'm also not sure how we can make the best tax policy in this country and maybe this proposed reform is just tinkering at the edges. But according to Gittins and a whole bunch of others, just 80,000 people will be impacted by these changes.
They can live with it.
Look, I love comfort as much as the next person. I want fancy Boomer holidays. I also wish to spoil my grandchildren rotten (partly because there is nothing more hilarious than incurring the wrath of my actual children).
But the fuss about the new tax on megaprofits on super is awful, vulgar and grasping. No one needs to have more than $3 million in their superannuation accounts. Anyone who does, can afford to pay more tax than they already do. And maybe taxing the investment income of super funds at a flat rate of 15 per cent before retirement and zero after retirement isn't doing much to stem the tide of wealth inequality in Australia.
Here's what's happening. About two years ago, Treasurer Jim Chalmers announced a plan to increase the tax rate on super annual earnings for balances exceeding $3 million from 15 per cent to 30 per cent. The tax would apply only to the earnings of the amount above $3 million. So it's not like these poor darlings will be slugged for earnings on the whole amount.
I asked Miranda Stewart, professor of law at the University of Melbourne Law School, about what she thought of the fuss. As ever, calm and clear in her response.
"We aren't banning people from having more than $3 million in super. They can keep it. It's only a slice above the three million," she says.
Would she be grumpy if she was in that category?
"I would be delighted if I had more than three million in my super fund. I'd be happy. This change would not really make me miserable."
The existence of superannuation is a gift from god, aka Paul Keating. It was supposed to improve the budget bottom line by reducing age pension costs. They are projected to fall from 2.3 per cent to 2.0 per cent of GDP over the next 40 years, compared to the OECD, which is predicted to rise to 10 per cent by 2060. But at a high cost - tax breaks for superannuation cost about $50 billion a year and will soon exceed the cost of the pension.
Longtime economics guru Ross Gittins was scathing this week about rich men wanting to stay rich. Fair enough and absolutely right. But what I'm missing from this conversation - entirely - is anyone from the richy riches thinking about others. Where are the richy riches when it comes to those on welfare? Where are they when we talk about raising the rate for those on welfare, for example? Why aren't the wealthy championing the cause of the poor?
Or as Cassandra Goldie, longtime CEO of ACOSS, told me this week:
"We would welcome a greater level of outrage about the failure to fix the adequacy of Jobseeker and Youth Allowance, which condemns people to live in terrible poverty."
Me too.
Now you'd be forgiven for thinking we are killing their darlings for the fuss that's gone on. The pamphlet for the wealthy, The Australian Financial Review, has had a field day. In summary, it's just plain cruel to tax the rich. It reminds me of the goings-on before the 2019 election, when Labor took real tax reform to the people and was roundly rejected after a successful scare campaign from the then member for Goldstein, Tim Wilson, and his family member, Geoff, a fund manager. Stewart tells me I'm being a bit mean - the proposed changes then would have affected more people than the one being suggested now. Still, there is always resistance when people think they have something to lose. Now it turns out the Wilsons have joined forces again to do battle on this proposal.
Real tax reform is hard because the people who don't want it are self-interested. We all are, to some extent. But being self-interested to the point where you don't care whether some people eat or die, that's shocking to me.
MORE JENNA PRICE:
For years now, the Australian Council of Social Service has been campaigning to raise the rate of payments made to those in need. So I asked the ACOSS team about their response to the complaints made by the uberwealthy.
The proposed tax change would very modestly slow the accumulation of riches that would otherwise flow to already wealthy men. Is that me being sexist? By no means. ACOSS tells me that the people with those huge balances are pretty much all men. Also, tax breaks for super cost $50 billion a year, almost as much as the age pension. I'd prefer more of that $50 billion to be in favour of all those payments which help people lead lives that aren't crushed by hunger, freaked out by rental payments.
As Goldie says: "This is a modest measure that barely touches the sides of some of the most inequitable and outrageous tax breaks in this country, egregiously generous tax breaks for people who will never need to rely on the age pension."
Forgive me if you know this, but superannuation is a tax shelter. You pay less tax on superannuation than you do on normal earnings. Previous Coalition governments allowed Armaguard (OK, maybe not them specifically) truckloads of money to be deposited into super accounts. That's now been stopped, fortunately. Surprisingly, it was the Morrison government that ended the lurk.
I'm not exactly sure how people get to be rich. What I do know is that some of them do not exhibit traits such as kindness or generosity (unless it's to a charity of their choice where they can bask in reflected glory). I'm also not sure how we can make the best tax policy in this country and maybe this proposed reform is just tinkering at the edges. But according to Gittins and a whole bunch of others, just 80,000 people will be impacted by these changes.
They can live with it.
Look, I love comfort as much as the next person. I want fancy Boomer holidays. I also wish to spoil my grandchildren rotten (partly because there is nothing more hilarious than incurring the wrath of my actual children).
But the fuss about the new tax on megaprofits on super is awful, vulgar and grasping. No one needs to have more than $3 million in their superannuation accounts. Anyone who does, can afford to pay more tax than they already do. And maybe taxing the investment income of super funds at a flat rate of 15 per cent before retirement and zero after retirement isn't doing much to stem the tide of wealth inequality in Australia.
Here's what's happening. About two years ago, Treasurer Jim Chalmers announced a plan to increase the tax rate on super annual earnings for balances exceeding $3 million from 15 per cent to 30 per cent. The tax would apply only to the earnings of the amount above $3 million. So it's not like these poor darlings will be slugged for earnings on the whole amount.
I asked Miranda Stewart, professor of law at the University of Melbourne Law School, about what she thought of the fuss. As ever, calm and clear in her response.
"We aren't banning people from having more than $3 million in super. They can keep it. It's only a slice above the three million," she says.
Would she be grumpy if she was in that category?
"I would be delighted if I had more than three million in my super fund. I'd be happy. This change would not really make me miserable."
The existence of superannuation is a gift from god, aka Paul Keating. It was supposed to improve the budget bottom line by reducing age pension costs. They are projected to fall from 2.3 per cent to 2.0 per cent of GDP over the next 40 years, compared to the OECD, which is predicted to rise to 10 per cent by 2060. But at a high cost - tax breaks for superannuation cost about $50 billion a year and will soon exceed the cost of the pension.
Longtime economics guru Ross Gittins was scathing this week about rich men wanting to stay rich. Fair enough and absolutely right. But what I'm missing from this conversation - entirely - is anyone from the richy riches thinking about others. Where are the richy riches when it comes to those on welfare? Where are they when we talk about raising the rate for those on welfare, for example? Why aren't the wealthy championing the cause of the poor?
Or as Cassandra Goldie, longtime CEO of ACOSS, told me this week:
"We would welcome a greater level of outrage about the failure to fix the adequacy of Jobseeker and Youth Allowance, which condemns people to live in terrible poverty."
Me too.
Now you'd be forgiven for thinking we are killing their darlings for the fuss that's gone on. The pamphlet for the wealthy, The Australian Financial Review, has had a field day. In summary, it's just plain cruel to tax the rich. It reminds me of the goings-on before the 2019 election, when Labor took real tax reform to the people and was roundly rejected after a successful scare campaign from the then member for Goldstein, Tim Wilson, and his family member, Geoff, a fund manager. Stewart tells me I'm being a bit mean - the proposed changes then would have affected more people than the one being suggested now. Still, there is always resistance when people think they have something to lose. Now it turns out the Wilsons have joined forces again to do battle on this proposal.
Real tax reform is hard because the people who don't want it are self-interested. We all are, to some extent. But being self-interested to the point where you don't care whether some people eat or die, that's shocking to me.
MORE JENNA PRICE:
For years now, the Australian Council of Social Service has been campaigning to raise the rate of payments made to those in need. So I asked the ACOSS team about their response to the complaints made by the uberwealthy.
The proposed tax change would very modestly slow the accumulation of riches that would otherwise flow to already wealthy men. Is that me being sexist? By no means. ACOSS tells me that the people with those huge balances are pretty much all men. Also, tax breaks for super cost $50 billion a year, almost as much as the age pension. I'd prefer more of that $50 billion to be in favour of all those payments which help people lead lives that aren't crushed by hunger, freaked out by rental payments.
As Goldie says: "This is a modest measure that barely touches the sides of some of the most inequitable and outrageous tax breaks in this country, egregiously generous tax breaks for people who will never need to rely on the age pension."
Forgive me if you know this, but superannuation is a tax shelter. You pay less tax on superannuation than you do on normal earnings. Previous Coalition governments allowed Armaguard (OK, maybe not them specifically) truckloads of money to be deposited into super accounts. That's now been stopped, fortunately. Surprisingly, it was the Morrison government that ended the lurk.
I'm not exactly sure how people get to be rich. What I do know is that some of them do not exhibit traits such as kindness or generosity (unless it's to a charity of their choice where they can bask in reflected glory). I'm also not sure how we can make the best tax policy in this country and maybe this proposed reform is just tinkering at the edges. But according to Gittins and a whole bunch of others, just 80,000 people will be impacted by these changes.
They can live with it.