24-05-2025
‘Hang the rich 2025-style': Even average earners must oppose Labor's super tax that guts the foundations of the Australian tax system
If a proposed superannuation tax is targeting wealthy Australians - only 0.5 per cent or roughly 80,000 people so the messaging tells us - there's nothing to worry about, right?
Labor's plan to tax unrealised capital gains on $3 million-plus super balances is about making rich folk pay their way because all the trickery of their complicated wealth is finally being blown open.
The highly contentious plan is to slug 30 per cent of the future earnings of super balances belonging to current high-net-worth individuals while for those below $3 million, a 15 per cent tax will apply.
The extra sting is that former governors, judges, police commissioners and top bureaucrats will all get a free pass, thanks to the exemptions buried in section 995 of the bill's draft.
Known as Division 296, and divisive it is no doubt, the plan sets a precedent whereby gains you haven't made can be taxed because indexation has been ruled out.
Heaven forbid if the Federal Government, giddy with overreach and a ton of election promises to fund, realised that cutting wasteful spending was a better solution instead.
The question is: how do you plan for long-term investments if you might have to sell stuff later to cover a tax bill you can't predict?
But this is not just about our retirement funds which are meant to be an incentive, by the way, so we avoid the welfare teat later in life.
It's about Labor's appetite for your money becoming insatiable, a creeping tax regime where even prudent investment is punished.
The intent is political, make no mistake, and all about control over our decisions and, ultimately, our independence.
It's Hang The Rich 2025 style - the motive every Greens party policy is aligned too, of course.
And now Labor, emboldened by electoral dominance, is tantalisingly close to achieving this socialist-style dream on July 1 so they can target someone merely because they are wealthy.
That's because their super majority gives them the numbers in the lower house and frankly why wouldn't the Greens support it in the Senate, even though they want a more savage $2 million threshold.
Factor in a weak Opposition and fractured cross bench and it's the government laying a slow and silent tax trap.
Deputy Prime Minister Richard Marles thinks legitimate outrage is a 'scare campaign' but we are right to be suspicious of where this could head next.
It is also being robustly questioned by the most astute in our business world, such as the country's leading retailer Gerry Harvey and former RBA governor Philip Lowe, as very poor public policy.
Sky Business Editor Ross Greenwood nailed it too - this policy guts the very foundations of Australia's tax system.
In layman's terms, what might seem like a protective but high bar today could easily ensnare middle-income Australians in the future.
Even a child in primary school knows a dollar today will not hold the same value in ten or 20 years time.
Older kids understand the fundamentals of our tax system - you earn and then you pay tax.
How about you might not earn but you'll still pay?
Also, the whole point is to not raise the threshold so Labor can rope in more people with reports it is budgeted to raise $2.3bn in 2027-28, rising to $40bn over a decade.
Also what exactly is the message Labor is sending to regional Australians, such as those who buy farms through self-managed super funds for example?
What will they target next?
There's real concern that farmers and small business owners could be forced to sell off land or shares just to pay taxes on money they haven't actually seen, let alone spent.
Well, what a way to support our rural families already under excruciating pressure with flooding in the NSW's mid-north coast and drought in the Riverina and Murray regions.
If you've saved responsibly and prepared for retirement, PM Anthony Albanese's message is clear.
You did everything right, now pay the price.
Your nest egg is Labor's future revenue stream.
Louise Roberts is a journalist and editor who has worked as a TV and radio commentator in Australia, the UK and the US. Louise is a winner of the Peter Ruehl Award for Outstanding Columnist in the NRMA Kennedy Awards for Excellence in Journalism and has been shortlisted in other awards for her opinion work.
