Speaking on Sky News on Tuesday, Ted O’Brien said the position of the Coalition is that the proposed $3 million super tax is “super big and super bad”, and if Labor wants to speak to the Coalition, it will have to “walk away” from many aspects of what it has proposed in the controversial legislation.
“There’s no doubt in opposition, we will be constructive where we can, but critical where we must, and when it comes to this super tax at the moment, I see no choice but to be absolutely critical,” O’Brien said.
“I can’t pre-empt the final decision that ultimately will come through the party room, but what I can say is that there are aspects of this policy that Labor has put forward which are absolutely egregious, in particular, the unrealised capital gains and secondly, the lack of indexation.”
O’Brien continued that if Treasurer Jim Chalmers confirms he will walk away from the unrealised capital gains component and the lack of indexation, then he believes the opposition can “have a conversation”.
“That does not mean that he [Chalmers] will necessarily get support, but that’s at least the basis for a conversation because right now it is so unreasonable,” he said.
“This is such a bad policy that there is no possibility of any arrangement between the Coalition and Labor. But if Labor sees the light and walks away from a whole bunch of issues here, especially taxing unrealised capital gains and lack of indexation, then certainly, we can have a discussion now. Whether they will or not – your guess is as good as mine.”
He added that although the Coalition would be open to discussion, it does not necessarily mean they will give the government a “blank cheque”.
“If, indeed, Jim Chalmers wants to come and have a discussion with the Coalition about his super tax, he would have to, firstly, walk away from the unrealised capital gains component. At least he should be compromising on indexation,” he said.
“Now, if he caves in on all those things and wants to talk about super reform, let’s have a chat about super reform. We’ll be open to those discussions.”
O’Brien added that the Coalition learnt “some big lessons from the last election”, and one of those was the need to ensure the party stays true to being the party for lower taxes.
“As I have said before, there’s no part of what Labor’s put forward here that I like at all. I mean the fact that taxes go up, the capital gains component, the indexation, the lack of integrity in what they put forward, where actually they want to see this passed through the Parliament, and then the Treasurer will decide the treatment of the Prime Minister,” he said.
“The whole thing is a dog. It really is. So, again, if Labor wants to walk all of that back and engage in good-faith talking about the possibility for super reform, of course, we’ll be constructive where we can and critical where we must.”
Just a game of pretend.
The ALP will almost certainly do a deal with the Greens, possibly in exchange with support for a position for an unrelated topic.
The next few years will be rubbish.
The Government could and should use this as an opportunity to simplify things and equalise across different investment vehicles.
TBC increased to $2 million from 1 July. Keep this indexed.
Tax on $2 million in Pension phase is still 0%
Any balance above the TBC to be moved to a higher taxed accumulation account. 30% contributions tax. 30% income tax. 30% CGT with no discounts. No non-concessional contributions allowed.
This will keep super as a tax advantaged investment vehicle, but anything beyond that is taxed at company tax rates.
Why does Jim want to Tax Unrealsied Capital Gains ?
Is it purely because the owners of the ALP = Industry Super Funds.
And Industry Super Funds can’t / don’t separate Super Members Income Earned and Capital Movements.
So thus they have designed this tax on Unrealised Capital Gains to meet Industry Super Funds poor accounting systems.
If there is any other reason Jim for Taxing Unrealised Capital Gains, PLEASE EXPLAIN.
There’s an easy way to solve the unrealised capital gains and indexing problems, while giving the Greens the lower $2M threshold they want.
Just move all super accumulation balances above the Transfer Balance Cap to a different fund category taxed at 30% instead of 15%, in the normal way without unrealised capital gains. Retirees would still have the opportunity to move up to $2M (the TBC threshold from July 1) into an untaxed Account Based Pension, and this $2M threshold is already indexed.
Who cares was the coalition thinks or wants. They are irrelevant for the next three years due to their utter incompetence in the election campaign. Mr Chalmers can do what he wants, knowing the Greens views are more radical than his. The tax is coming in and unrealised assets will be taxed, with Mr Chalmers continuing to claim only 80,000 Australians are impacted, and they are rich so who cares.