Albanese government accused of hiding truth over super tax rules for politicians on old pension scheme

Sky News AU

2 days ago

The Albanese government has faced scathing criticism for failing to be upfront about how Labor's controversial $3 million super tax will apply differently to politicians.
It comes after it was revealed that Mr Albanese and other politicians under the generous defined benefit pension schemes will not have to pay the tax until after they retire.
Sky News also revealed recently that state officials on the old pension schemes are not expected to be taxed at all due to constitutional protections.
Shadow industrial relations minister Tim Wilson told Sky News the super tax was 'one of the worst taxes' he had ever seen.
'It's reckless, it is dangerous, it' irresponsible and the family savings tax must be defeated,' he said on Tuesday.
'The government is looking at this as a way to get revenue. But what it actually means is young Australians won't be able to then go on and secure jobs in growth industries.'
The comments come amid questions about how transparent Labor has been in the tax's applications to politicians, compared to other high-net-worth superannuants.
Employment and Workplace Relations Minister Amanda Rishworth recently admitted to Sky News Sunday Agenda that some politicians would be 'treated differently'.
'They are treated differently. There is interest payable that is calculated in a defined benefit scheme,' she said.
'It is the same way that other superannuation tax changes and other changes have been applied to the defined benefit schemes.'
Unlike ordinary superannuants with balances above $3 million, politicians on the old pension will only begin paying after they retire.
Interest will accumulate on the tax owed at the long-term government bond rate of about 4.5 per cent.
Mr Albanese deflected on Sunday when asked by Sky News whether he and others on these legacy schemes would pay the tax later than other superannuants.
'Look it applies to us as it applies across the board, but the legislation, of course, has yet to be carried by the parliament,' he said.
The 'different' treatment has infuriated critics, who say the government has been deliberately opaque.
Shadow finance minister James Paterson slammed the government's approach as dishonest and self-serving, warning it created a 'double standard'.
'Let me be helpful and answer the question: yes, it is deferred. You do not pay it during your working life,' Mr Paterson told Sky News Sunday Agenda.
'Every other taxpayer, if they exceed the threshold, has to pay it during their working life, but people like Anthony Albanese, on a defined benefit pension, only have to pay it after they retire.
'I think the government has to be open and transparent, much more transparent than the (Employment) Minister (Ms Rishworth).
'The Prime Minister should stand up today and explain his understanding of this different treatment between different categories of retirees.'
When Treasurer Jim Chalmers was asked on May 14 by Sky News whether the tax would apply to politicians like Mr Albanese and Peter Dutton, he insisted it would.
'Yes, and we've made that clear... Politicians on defined benefit will be impacted if they've got very substantial balances by the changes we're proposing,' he said.
However, Mr Chalmers' answer failed to clarify that the tax would not apply annually but instead would be deferred until retirement for defined benefit members.
The government has attempted to justify its approach by saying it mirrors previous governments, including the Coalition, handling of tax legislation.
A spokesperson for Mr Chalmers recently told Sky News the primary legislation makes it "clear that all federal politicians … will be subject to the measure'.
"This is the case regardless of when they entered into parliament and whether have a defined benefit interest or not.'
The superannuation tax, which the government claims will affect fewer than 0.5 per cent of superannuants initially, has been projected to raise $40 billion over a decade.
However, critics warn that the unindexed $3 million threshold will subject increasing numbers of Australians to the tax over time.
AMP Deputy Chief Economist Diana Mousina conducted modelling that showed the average 22-year-old will be hit by the tax by the time they retire.
CPA Australia's Superannuation Lead, Richard Webb, called on policymakers to ensure the policy will be indexed to inflation.
'Bracket creep is already having a silent eroding effect on personal finances,' Mr Webb said in a statement.
'Allowing this further erosion of superannuation savings is contrary to the fundamental principles of our tax system.'