Latest news with #Treasurer
Daily Mail
5 days ago
- Business
- Daily Mail
The world's gone topsy turvy as the GREENS become voice of reason (!) on super - as a rift festers between two of Australia's most powerful men: PVO
Who would have thought that the Greens could become the voice of reason in the current superannuation tax debate? But with negotiations between the Labor government and the opposition breaking down before they even started - courtesy of the intransigence of Treasurer Jim Chalmers - it is the Greens who have indicted a willingness to try and compromise to find common ground. Labor's starting position is that it hopes to tax super holdings above $3m at a 30 per cent rate, including unrealised gains. So earnings on balances over that sum will get taxed, as will the super assets themselves if they rise in value - even if you don't sell them. That is the taxing of paper profits - the clear worst design feature in what Labor is proposing to do. The Greens want the threshold lowered to $2m instead of $3m. But unlike Labor they are open to both indexing the rate at which the tax will be applied and discussing at least a partial removal of taxing unrealised gains. The Greens have expressed concerns at illiquid assets (think property) being taxed, because people aren't able to sell down their holdings to pay such a tax. If the Greens come to realise that you can't differentiate between liquid (think cash, shares) and illiquid assets when it comes to apply an unrealised gains tax, then we are in business. A reasonable compromise might be possible. That leaves the Greens still at the negotiating table but, at this stage at least, not the Labor party. Why? Because the Treasurer just doesn't get it. Chalmers simply can't get his non-economist head around the deficiencies of the policy as it currently stands. Even though the Greens can. What does that say about this Labor government? While some people won't like the idea that a 30 per cent tax on super earning can start to apply from a $2m threshold rather than a $3m one, that's hardly unreasonable in the world of most Australians. Especially if it is indexed, as Greens have expressed a willingness to embrace. Given the tax rates working-age income earners pay, 30 per cent on earnings on super assets above $2m isn't exactly a socialism panacea of a policy. With an ageing population it's part of the tough medicine the budget needs, especially if governments keep spending money they don't have rather than embarking on root and branch budget repairs. The opposition appears to be fundamentally opposed to lowering the threshold from $3m to $2m, but it's hard not to think that's an example of them being in the pocket of wealthy Australians who have for too long used their super balances as a means of legal tax avoidance. If Labor was more reasonable it would see opportunity in the Greens coming to the negotiation table. It might have little choice - despite Chalmers' refusal to accept a compromise - because without the support of the Greens or the opposition there is next to no chance of the super tax hikes passing the senate. Even after Albo's embrace of defecting Greens senator Dorinda Cox, who has been welcomed into the Labor fold despite the PM previously chastising Senator Fatima Payman for walking away from Labor after she was elected at the 2022 election. In Albo's myopic world view it's wrong for an elected Labor senator to do that - she should have resigned her seat according to the PM - but it's absolutely fine for a Green senator to do the same if it benefits the Labor Party. Yes it's contradictory and hypocritical, but don't let such inconsistencies prevent you from accepting Albo's explanation that it's reasonable and fine. The weird thing is Labor get little value from the defection. It doesn't chance the fact that the Greens control the senate balance of power. It doesn't make the passage of the super laws, without compromise, any easier. And there are a host of other downsides to accepting Cox into Labor's ranks, including her past anti-Labor rhetoric and accusations of bullying the PM says have been resolved but others aren't so certain about. With the Greens breaking from tradition and extending the hand of compromise to Labor, Albo now has a choice: stand by his stubborn treasurer who doesn't want to compromise the existing poor drafting of the super bills. Or overrule his subordinate and come to the table to negotiate an outcome that delivers more revenue without the design flaws currently being picked apart by experts. It could be a pivotal moment in the relationship between the PM and his Treasurer. It seems likely the opposition will use the new super taxes as a wedge political issue come the next election. If Labor sticks to its guns and somehow gets the laws past in their current format anyway, by using its election mandate to force others to acquiesce, the Opposition will have significant ammunition. If a genuine compromise with the Greens does happen, we've already seem senior opposition frontbenchers in the media attacking the 'Labor Greens Coalition', in the hope that doing so takes some shine off of the new government. This recent development has energised the PM to return to the negotiation table with the Coalition, defying the hopes and dreams of his treasurer. We now know Chalmers doesn't at all see eye-to-eye with Albo when it comes to compromising with the Coalition. Animosity between the pair will only rise if a deal gets done, brokered by a PM without the support of his minister responsible for super and tax. There is always tension between treasurers and prime ministers. It happened between Bob Hawke and Paul Keating, as well as between John Howard and Peter Costello. But when a PM and Treasurer put stakes in the ground the way Albo and Chalmers have, which way the ensuing discussions go will certainly leave one of the pair diminished. Let's wait to see who that is.
ABC News
6 days ago
- Business
- ABC News
Australia's economic growth slows to 0.2 per cent in first quarter
Australia's economy grew by 0.2 per cent in the March quarter, and 1.3 per cent through the year, coming in below expectations. Treasurer Jim Chalmers speaks to 7.30's Sarah Ferguson.
Daily Mail
6 days ago
- Business
- Daily Mail
BREAKING NEWS Australia slides back into a 'per capita recession' in major blow for Anthony Albanese government
Australia is back in a per capita recession again as immigration soars. Gross domestic product per capita - or the average amount produced by every Australian - shrunk by 0.2 per cent in the March quarter, new national accounts data released on Wednesday showed. Australia had been in a per capita recession since early 2023 until the September quarter of 2024. But it sunk into negative territory again in the December quarter, followed by another bad number in the March quarter - producing a per capita recession. Productivity was flat in the March quarter, plunging by one per cent over the year to March. Weaker hourly output also potentially risks pushing up inflation as costs of faltering output are passed on the consumers. Immigration levels were still high in the year to March with 437,440 people moving to Australia on a net permanent and long-term basis, with this net figure factoring in departures including skilled migrants and international students. Treasurer Jim Chalmers tried blaming overseas factors, as Donald Trump's tariffs hamper global growth. 'Today's national accounts show that our economy continues to grow in the face of substantial economic headwinds at home and abroad,' he said. 'While overall growth in the Australian economy remains subdued, the private sector recovery we have planned and prepared for is gradually taking hold. 'With all the uncertainty in the world, any growth is a decent outcome.
Yahoo
01-06-2025
- Business
- Yahoo
Bedouin town's treasurer inflated salary, embezzled over NIS 1.7 million from local council
It was revealed that the treasurer embezzled over NIS 1.7 million from the council by inflating salaries and paying fictitious employees, including his sons. An indictment was filed against the former treasurer of the Tuba-Zangariyye Council over embezzling millions of shekels from the council's funds, the Israel Police said last Tuesday, following an investigation by the Northern District Fraud Unit. The treasurer's sister and sons were also accused of their involvement in the crime. According to the police statement, the investigation "began following information received from an external accountant appointed by the Interior Ministry to conduct a thorough review of the council's operations, with a focus on employee salaries." As a result of the investigation, it was revealed that the treasurer embezzled over NIS 1.7 million from the council by inflating salaries, paying fictitious employees, including his sons, and depositing funds into their accounts between 2016 and 2021, says the police's statement. In January 2024, the investigation became public. The treasurer and his family members were detained for questioning by authorities, including searching the treasurer's home and council offices for evidence. By May 25, 2025, the Northern District Prosecutor's Office had filed indictments at the Nazareth District Court against the treasurer, his sister, and his two sons, "represented by Attorney Sarit Mizrahi—at the Nazareth District Court on charges of theft by a public servant, aiding and abetting theft by a public servant, fraud, and money laundering," according to the Israel Police.
Daily Mail
15-05-2025
- Business
- Daily Mail
PETER VAN ONSELEN: Here comes Labor's giant new super tax - and don't think it won't apply to you
So resounding was Labor's election win that there can be no question over its mandate to legislate the policies it took to the polls, including the taxing of unrealised gains in superannuation. However few Australians would have had that in mind when they voted, as it certainly wasn't a headline issue during the campaign, and even for those who were aware of it, many were unclear on exactly what it meant. Treasurer Jim Chalmers has been hosing down fears that his new tax is something most Australians need to worry about - after all, it only applies to those with super balances above $3million, which is only a lucky few. But the truth about this policy is much more complicated than that. Taxing unrealised super gains will not long remain a tax on the wealthy, because the way it is designed will, over time, capture millions of Australians in its net, and here's why: Unrealised gains are increases in the paper worth of assets you haven't yet sold. So in this case, if your super savings go up on paper, that increased value is classified as an unrealised gain which will be taxed. This means that for some Australians they won't only have to pay tax on the earnings from their super that they use to live on in retirement, but they'll also have to pay a tax on the superannuation investments themselves that deliver those earnings. The result will be a reduction in balances, and lower returns going forward. Labor will put a 30 percent tax on unrealised gains from superannuation accounts of $3million or more. So, for example if someone's super investment goes up by $100,000 in value, they would need to pay $30,000 in tax. If they don't have the funds to do so when the tax bill arrives, they will need to sell some of their super savings to cover the bill. A major problem with this is that super investments can also go down, just like we saw in the immediate aftermath of Donald Trump's new tariffs when sharemarkets saw a sharp sell-off. If that happens again with this new tax in place, bad luck, you'll still have had to pay the tax from when the investments previously went up. This is something many tax experts have expressed concerns about. In a joint submission to Treasury last year the superannuation lead at Chartered Accountants, Tony Negline, and the head of policy at Certified Practising Accountants, Ram Subramanian, described the proposed changes to superannuation as 'poorly designed'. That's not surprising given that the former minister for super and assistant treasurer, Stephen Jones, wasn't exactly a stellar performer in Labor's first term. He's now left the parliament, leaving his poorly designed new tax behind. Most Australians will think that this new tax won't affect them, because they don't have $3million in their super accounts and probably never will, but they should think again. This incoming tax isn't indexed, which means slowly but surely over time more and more Australians will reach that $3 million threshold. The same way that in decades gone by few would have thought they could ever afford (much less buy) a million dollar home. Now that's closer to the median house price in capital cities. That's because of inflation. Give it a few years and a $3million super balance will no longer be the reserve of the well-to-do. Tax experts have called for the new tax to be indexed to inflation, which the government has refused to do, citing that income taxes aren't currently indexed either. Precisely. And that's why more Australians keep having to pay more taxes, because inflation pushes them into higher and higher tax brackets. This bracket creep dynamic will soon afflict superannuation once this new tax comes into effect. Even if the government occasionally raises the balance at which it kicks in - something it currently has no plans to do - those increases will be highly unlikely to keep pace with inflation. Forcing people to sell down their super holdings from accounts that are based mostly on stock investments is bad enough. But what about those with super portfolios that are much less liquid than shares? Such as property for example. If you own property as part of your portfolio - as many people do - and it is assessed to have increased in value, how do you pay for that 'unrealised gain' the government is going to tax at 30 percent? Unless you have other savings to cover it, your only option is to sell the property, which can result in all manner of further costs such as real estate agent fees. It puts anyone with property investments as part of their super in a very difficult position. This is especially problematic for farming families that often have their land assets included in their super savings. Many will be forced to carve up their properties and sell them, potentially at heavily discounted prices, to cover the tax bill they will incur as a result of this new policy. But that's not the only way this new tax can hit Australians hard. If someonedies and their super investments are transferred to the surviving spouse, that widow or widower can be subject to the tax too. That makes it a form of inheritance tax by stealth. That's not something most Australians would want to deal with while grieving the loss of a loved one. While Labor has suggested that the new tax threshold could be increased above $3 million in the future to account for inflation, there are no guarantees that will happen. Indeed, it is just as likely that threshold could be lowered by a future government, to capture more people and therefore raise more tax revenue. The Greens are already demanding that it be reduced to $2million, and they now hold the balance of power in the Senate. Once the tax becomes law it will be just as easy to lower the point at which it starts to apply as it is to raise it, and lowering it gives the government more revenue out of your pocket not less. The newly elected Liberal MP for Goldstein, Tim Wilson, is very concerned about how this tax might lead to further taxes on other asset classes. He describes it as 'a family saving tax'. Expect to hear that phrase time and time again in the coming three years as the Liberal Party tries to find a way to counter-attack against a dominant Labor government. 'The sole purpose of unrealised capital gains tax is to hit family savings in superannuation,' Wilson says. 'But once applied on super will be replicated on property, shares, businesses and trusts.' If you trust governments to not put up taxes, then you have nothing to worry about. However, if you suspect governments are always looking at new ways to raise more revenue, especially when debt is as high as it currently is, then this new tax could just be the beginning. 'By applying a family savings tax on unsold assets, it will create a massive problem for households who have an asset but can't afford to pay the tax – particularly older Australians', Wilson claims. 'A family savings tax on unrealised capital gains violates basic tax principles: that a tax is applied at the value of a real economic activity. Earn an income you pay tax. Sell an asset you pay tax. It is a capital income tax but where there is no asset sold.' Now back in parliament after defeating Teal MP Zoe Daniel, Wilson was the chair of the House of Representatives economics committee prior to losing his seat at the 2022 election. Ahead of the 2019 election he led the charge against Bill Shorten's franking credits tax policy, and sees similarities in what Chalmers is trying to do now: 'This family savings tax is about one thing: revenue. Once Chalmers figures out how to administratively apply an income tax on unsold assets expect it to be replicated beyond super', Wilson argues. Could Labor's franking credits plans from six years ago also now resurface? Labor says no, but then again it also promised not to increase taxes on superannuation ahead of the 2022 election, yet here we are. For most Australians the new legislation is likely to pass largely without much notice, for now at least. But the fact it isn't indexed means they will certainly become front-of-mind pretty soon, with parliament to resume in late July. To put the signifcance of this new tax in context, including a hint as to how many Australians will be affected by it in the coming years, Treasury estimates that it will reap $40billion for government coffers over the next decade. 'The government currently projects less than 100,000 people will be captured by the family savings tax', Wilson points out. 'But as the threshold is not indexed it will cover millions of Generation Y and Z Australians by the time they hit retirement and when $2million or $3million will not be worth anywhere near its value today.' Is this the issue that Liberals might use to start appealing to younger Australians worried about their futures? There is another unintended consequence of this new tax. It risks making investments in innovative startups less likely because small speculative investments that grow rapidly in value on paper but take years to return profits will suddenly become undesirable, because that on-paper value will be taxable up front. Currently super funds heavily invest in such asset classes which often take years to deliver profits. Australia's world leading super savings - courtesy of Paul Keating's wise decision to introduce compulsory superannuation in the early 1990s - has been the bedrock of Australia's capacity to invest in start ups. That won't be possible under the looming tax change that's been flagged. Wilson claims this is why the new tax 'will kill technology companies particularly and send ideas, jobs and talent offshore'. That's the last thing Australia needs right now in the increasingly uncertain global economic environment being created by Donald Trump's presidency.
