The upper house was home to a fiery debate on Thursday after Senator Michaelia Cash presented a motion to discharge the $3 million super tax bill.
Although the motion was defeated, this bill is unlikely to be put to the Senate before the election given Thursday was the last sitting day before Labor presents its budget on 25 March.
Speaking to InvestorDaily’s sister brand, SMSF Adviser, Peter Burgess, CEO of the SMSF Association, said it’s time for the government to take this measure off the table.
“The Senate does not support the bill,” Burgess said.
He suggested the government’s determination to pass the bill centres on the budget revenue it was expected to generate.
“It’s now all about the revenue,” Burgess said, explaining that a conversation in Parliament this week between the Treasurer and his shadow revealed that if the bill fails, an alternative revenue source will need to be found.
“There was a question from shadow treasurer Angus Taylor in Parliament earlier in the week about taxing unrealised capital gains. The Treasurer replied that if the opposition was not going to approve this bill, then they would have to figure out where they will get their revenue from,” Burgess said.
In presenting the motion for dismissal on Thursday, Senator Cash accused the government and the Greens of eyeing off Australia’s superannuation “pot”.
“You have the audacity to say to hard-working Australians who go into work every day, they work hard, they are putting money away for their retirement, ‘It’s not your money, it’s the Labor Party’s money, and it’s the Green Party money’,” she said.
“’It doesn’t matter how hard you worked. Guess what? It’s a pot of money and we are going to take it from you’.”
She added that although the government stated that the inflated tax for balances over $3 million will only impact some 80,000 Australians, Treasury figures suggest that number will end up being much larger, closer to one in 10.
On the opposite side of the aisle, Minister for Finance Katy Gallagher accused the opposition of attempting to undermine the system with its motion.
“Those opposite oppose superannuation every time, from its inception, where they voted against it, to now, when they continue to look at ways to undermine superannuation,” she said.
“They cannot stand working people having access to capital to fund their retirement. That’s ultimately what this is about. You cannot bear it. You can’t bear the size of the superannuation industry. You can’t bear working people, particularly industry funds, actually having resources in this country, on behalf of their members.”
Greens senator Nick McKim added in Senate: “The Liberals have come in here today, and they are basically asking us to think about the bloated, tiny cohort of wealthy superannuants with balances over $3 million.
“Well, the Greens are going to think of people who can’t get their teeth fixed and get to the dentist. We’re thinking of people who don’t go to the GP, because they can’t afford to see a doctor,” he said.
“And we’re thinking of them because we believe big corporations and billionaires should be forced to pay their fair share of tax.”
A national poll commissioned by the FSC, and published this week, revealed Labor’s perseverance at passing its new tax on super savings has convinced voters that it is likely to implement further unannounced taxes if it is re-elected later this year.
Specifically, when asked whether the Labor Party was likely to introduce further tax changes on superannuation if they are re-elected, a net positive 46 responded in the affirmative.
The distrust in Labor’s super policy increased from mid to end-January – a period during which Labor seesawed on the $3 million super tax bill, scrapping it and reintroducing it to the Senate debate schedule.
“Australians do not trust politicians with their superannuation but are particularly unnerved by the government’s renewed push to increase taxes on their retirement savings in the final weeks of this Parliament,” Blake Briggs, FSC chief executive, said.
“Labor’s perseverance in raising taxes is eroding Australians’ trust in the government on the eve of the federal election.”
Much of the financial services industry has spoken out in opposition of the bill, with the FSC’s Briggs calling for the bill’s withdrawal in favour of an economy-wide and evidence-based tax review after the next election.
“The government’s superannuation tax breaches fundamental tax policy principles, by taxing unrealised gains, and the incidence of the tax will have the greatest impact on young Australians as a result of the deliberate decision not to index the $3 million threshold,” Briggs said.
“It is disingenuous to say this tax targets older and wealthier Australians when in reality, it targets younger, middle-income Australians, designed to establish what is known as a ‘structural saving’ in the budget that will be impossible for future governments to unwind.”
The Coalition has fiercely opposed the bill while also putting the spotlight on Labor’s pre-election promises not to touch superannuation settings.
Namely, in the lead-up to the 2022 election, both Anthony Albanese and Stephen Jones promised not to tinker with super, a promise they retracted less than a year after assuming government.
