04-06-2025
Treasurer Jim Chalmers accuses opponents of 'extremely generous' super tax changes of 'lies'
Treasurer Jim Chalmers has accused critics of his super tax plan of a bad-faith campaign against the "modest" but "meaningful" reform, declaring his intention to pass the new tax into law without amendments.
There has been renewed attention since the election on the two-year-old Labor proposal to double the earnings tax on super balances of at least $3 million, from the current 15 per cent to 30 per cent.
Critics say the method for applying the tax, which includes "unrealised" growth in the value of assets as taxable, is unfair to those who keep multimillion-dollar homes, farms or paintings in their funds.
There is also criticism of the decision not to index the $3 million threshold, which would see it fall in real terms to $2 million in 15 years' time.
But Mr Chalmers said he believed those attacks were unfounded, and an excuse for those who wanted to retain "the extremely generous tax concessions, not the slightly less extremely generous tax concessions" he proposes.
"People will say it's about the calculations, some people will say it's about the indexation, but in a lot of instances … it's not really," he told reporters on Wednesday.
"These changes were announced almost two-and-a-half years ago now; we did multiple rounds of consultations … We provided years of opportunities for people to suggest different ways to calculate that liability and nobody has been able to come up with one."
Treasury recommended the unrealised gains approach, owing to feedback from large super funds that it would be difficult to calculate it any other way.
"The concessions here are still very generous. We're not eliminating tax concessions for people with big balances, we're still providing very substantial tax breaks, just slightly less substantial," he said.
"I think we should resist the temptation to think that because overwhelmingly two media outlets don't like this change, to assume that that concern is kind of broadly and deeply felt in the Australian community."
Shadow Treasurer Ted O'Brien made a fresh critique of the policy on Wednesday, saying the proposal was "an absolute disgrace" and would be "a disaster for the Australian economy".
Mr O'Brien told The Australian last week he was open to a deal with Labor if it ditched the unrealised gains component and indexed the $3 million threshold.
But on Wednesday he said there was "no deal to be had" unless Labor agreed to "lower, simpler and fairer" taxes, a principle seemingly at odds with this tax rise.
Labor says the plan would apply to just 80,000 people initially, reducing the size of the tax concession for someone with a $3 million super balance from around $14,000 to around $13,000.
Mr Chalmers said the Coalition was not "fair dinkum" about a deal, pointing to apparently contradictory statements from James Paterson and Matt Canavan.
While he acknowledged Labor could not pass legislation without either the Greens or the Coalition, he did not signal willingness to move on Greens leader Larissa Waters's alternative proposal of a $2 million threshold with indexation.
Labor sources told the ABC the government was not enthusiastic to spend too long talking about the tax, indicating a resolution of some sort was likely.
But the treasurer said the episode didn't "augur well for bigger, broader tax reform".
"I think that there's an issue here when it comes to tax reform. A lot of people say they're in favour of tax reform in the abstract, but they very rarely if ever support it in the specific."
Mr Chalmers also reiterated that those who have "defined benefit" pensions, including federal politicians elected before 2004, would be subject to alternative arrangements to pay an equivalent amount of tax.
Defined benefit funds pay out a set amount each year in retirement, different from the normal "defined contribution" funds where the payout is determined by what someone has contributed and earned.
That makes an earnings tax difficult to apply, with the workaround to be a tax applied during retirement.
The treasurer said that workaround was "consistent with a longstanding approach taken in other areas of superannuation…".
"It's a function of necessity, [and] we charge an interest rate on those liabilities to make sure that people don't receive an inappropriate advantage from the necessity," he said.
The group of politicians with access to the old defined benefit scheme includes Anthony Albanese, prompting Coalition frontbenchers to accuse Mr Chalmers of planning a "tax break for his boss".
The treasurer said the "lower echelons" of the Coalition had been "shamefully" lying about this.
"It's been abundantly clear in black and white, and people have lied about it."
