Opposition Leader Peter Dutton has vowed to repeal the government’s proposed changes to superannuation tax concessions if the Coalition wins the next federal election.
“We’re dead against it. And we will repeal it,” Mr Dutton said on Wednesday.
It came as the opposition lashed the government for a “broken election promise” with super changes it announced on Tuesday.
It wants to legislate to lift the concessional tax rate on future earnings for super balances above $3 million from 15 per cent to 30 per cent from 2025/26.
The move will affect about 80,000 Australians and is expected to raise $2 billion in the first full year and $3.2 billion over five years, which will go back into the budget rather than be spent.
But it has been slammed by the Coalition, after Prime Minister Anthony Albanese pledged during last year’s federal election campaign to make no major changes to superannuation.
Shadow treasurer Angus Taylor said the move was a “supersized” broken promise.
“This is a breach of trust with the Australian people,” he said.
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Tax concessions halved for super balances over $3m
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On Wednesday, Mr Albanese denied breaking any election pledges.
“‘No it’s not,” he told ABC radio..
“It very clearly takes effect after the next election, and what we’re doing here is a very modest change.
“This is a modest change about improving the sustainability of the system.”
Treasurer Jim Chalmers told Sky News he wouldn’t “quibble” over whether it amounted to a broken promise.
“People have got a couple of years to prepare for it,” he said.
“I think it’s entirely appropriate we legislate it before [the election].
“If Peter Dutton and Angus Taylor want to go to the wall for these half a per cent of people with very large superannuation balances, the party that gave us a trillion dollars in debt wants to borrow even more money to give for these unaffordable tax breaks [it can].”
Dr Chalmers said the government had struck the right balance with the $3 million threshold, instead of lowering it to boost revenue.
He said Australia’s superannuation system was world class but had two major imperfections.
“The cost of the tax breaks for people who don’t need them, and the gender gap in balances,” he said.
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Dr Chalmers said difficult decisions had been made in not putting the money towards paying super on paid parental leave.
“When we can afford to pay the superannuation guarantee on paid parental leave we would like to, but this change is about budget repair.”
Mr Taylor described the move as “an attack on aspirational middle Australia”.
“The Labor Party should be honest about how many Australians who are investing 20, 30, even 40 years ahead of their retirement will really be affected.
“Middle Australia should be deeply worried about the desire for this government to tax Australians.”
But he also refused to commit to repealing the legislation if the Coalition won the next election.
“I support governments keeping their election promises and we won’t resile from that position,” he said.
Mr Dutton was much firmer later on Wednesday, promising a Coalition government would reverse the changes.
“We’re not going to stand by and watch Australians attacked,” he said.
“There are 88,000 that they’re talking about now. But that figure of $3 million is not indexed, so in 10 or 15 years’ time, there will be tens of thousands, if not hundreds of thousands, of Australians who will be affected by this.”
Mr Albanese said it was hard to argue super accounts with balances of $3 million or more were about “actual retirement incomes”.
“There are 17 Australians who have over $100 million in their superannuation accounts and one has over $400 million,” he said.
“Now most Australians will would agree that’s not what superannuation is for, that’s not about providing for people’s retirement incomes.
“That’s why this change is important.”
Greens leader Adam Bandt, whose party’s Senate support will be needed to pass the changes, said he would discuss the plan with Labor, but the “modest proposal” ignored other more responsible budget policies.
“Let’s look at reining in the stage three tax cuts,” he said.
Richard Denniss, from the Australia Institute, said superannuation tax breaks were unsustainable and inequitable.
Tony Negline, from Chartered Accountants ANZ, said the change would have a big impact on a handful of people who had played by the rules.
Mr Albanese ruled out changes to capital gains tax exemptions.
“We are not going to impact the family home, full stop, exclamation mark,” he said.
– with AAP
