Treasurer Jim Chalmers pushes back against Donald Trump's section 899 tax threatening Australian super returns
Treasurer Jim Chalmers has made Australia's case against one of Donald Trump's controversial proposals which could eat into the nation's nest egg.
The controversial section 899 of Trump's 'big beautiful bill' allows the US to implement 'revenge taxes' on nations the Administration believes unfairly treats US firms – such as tech giants Meta and Alphabet.
This could mean Australians are forced to pay upwards of 20 per cent more tax on US investments if it is approved.
Australia is under threat as the government looks to force tech giants to pay for local news through the media bargaining incentive.
The US could also consider the Pharmaceutical Benefits Scheme enough to warrant the taxes.
Many in Australia's $4.2 trillion superannuation system have expressed concerns about diminished returns if the legislation passes as hundreds of billions of dollars of members' funds is invested in the US.
Mr Chalmers on Wednesday told reporters he had discussed section 899 with US Treasury Secretary Scott Bessent and made Australia's case against the looming tax.
'I've engaged a lot with Australian investors over the course of the last couple of weeks on their concerns,' Mr Chalmers said.
'I was able to represent them and raise their concerns directly with US Treasury Secretary Bessent and I know that the Treasury Secretary is very focused on these issues as well.
'We hope that they can be resolved. We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress.'
Investors have expressed caution about investing in the United States over growing uncertainty surrounding section 899.
AMP's chief economist Shane Oliver earlier this month said section 899 of the bill, alongside other economic policies by the Trump Administration, 'called into question 'US exceptionalism' and its 'safe haven' status'.
The Future Fund chair Greg Combet also expressed concerns about the bill where he argued the US was hurting itself by thwarting investment through section 899.
'Section 899 of the Bill will potentially and dramatically escalate tax rates for Australian institutional investors like the Future Fund,' Mr Combet said in a speech to the Committee for Economic Development of Australia earlier this month.
'In combination these policies and dynamics are making the US a more risky and uncertain investment destination.'
Two versions of the bill currently exist: one from the US house and one from the senate.
Both versions need to be identical before they are shown to Trump for approval.
Pitcher Partners said if the US President greenlights the tax, Australia will have to wind back laws the US has deemed inappropriate.
'If it does pass, and Australia is identified as a country with tax practices which are subject to the Bill, it will place pressure on the Australian Federal Government to repeal its own laws so that Australia is not an 'offending' or 'discriminatory' foreign country,' Pitcher Partners said.
'However, as matters stand today, the potential impact of this Bill is certainly something that Australian taxpayers with US interests should keep a close eye on.'
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