‘Bad policy': Former ACTU President Bill Kelty condemns Chalmers super, unrealised gains tax as rancour mounts within Labor ranks
Well-known figure of the Australian Labor movement Bill Kelty has unloaded on the Albanese government, revealing his distaste at the proposed super, unrealised gains tax whilst railing against the excessive levies imposed on small businesses.
Labor's plan to double the tax rate from 15 to 30 per cent on super accounts over $3 million is set to dominate the political arena when parliament resumes in late July.
The policy, which includes targeting unrealised capital gains has sparked widespread furore from industry magnates, former Treasury and RBA officials and senior economists who have railed against the unprecedented nature of the move.
Experts have expressed fierce disapproval of Labor's insistence to target unrealised capital gains, of which are often fleeting and illusory and have stated the policy will undermine confidence in the superannuation industry.
Mr Kelty, who served as the President of the Australian Council of Trade Unions from 1983 to 2000 lashed the move as 'bad policy' and said taxing gains that a person had not yet realised in their own accounts was flawed.
'I don't mind taxing people but not unrealised earnings,' Mr Kelty told The Australian.
Mr Kelty, who was an influential force in legislating compulsory superannuation alongside former Labor Prime Minister Paul Keating said pursuing unrealised gains would establish a dangerous precedent and undermine the entire concept of super.
'I think taxing unrealised capital gains is bad policy. It distorts the effective tax. Changes your income flows, and if it was on superannuation generally, there would be a revolution about it. It would destroy super.'
The ex-trade union boss also attacked Treasurer Jim Chalmers' argument that the changes would only impact 0.5 per cent of superannuants, and argued the policy itself was fundamentally errored in principle.
'If you want to tax rich people in this way, why wouldn't you actually reform the tax system?' Mr Kelty questioned.
"This is a circuitous revolution against the rich, is it? It seems a strange thing to do. Bad policy is bad policy – for rich or poor.'
Mr Kelty called on the government to instead turn its attention to reforming the mounting tax burden lumped on small businesses and said that operators faced an impossible system to navigate.
'You have got to keep records of this, records of that. You have got to go to your accountant to get depreciation scales for this and that. You have got to keep logbooks for your car. You have got to employ people to collect and maintain all your records. You have got to go to your accountant. You're making $100,000 a year, and $10,000 of that is to try and operate your tax system.
Labor has also resisted repeated calls to index the $3 million threshold, with experts despairing that younger Australians would fall victim to the tax due to CPI and wage shifts over the coming decades.
The contentious policy is expected to pass both houses of parliament unopposed, with the Greens set to join forces with Labor in the Senate.
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