06/03/23

AUSTRALIA: Zali Steggall launches attack on superannuation tax changes, claims unfair to rich.

As published on news.com.au, Monday 6 March, 2023.

A plan to slash tax concessions on superannuation balances above $3m has been slammed as a disingenuous attack on the well-off.

Independent MP Zali Steggall questioned whether the policy, which would see the tax rate on earnings double from 15 per cent to 30 per cent, was a targeted “class warfare”.

Treasury estimates the move will impact just 80,000 people, or 0.5 per cent of Australians, who have more than $3m in their super accounts.

Ms Steggall roundly criticised the policy on Monday, despite her fellow crossbenchers, such as Kate Chaney and Allegra Spender, insisting they remained open-minded.

“It is disingenuous to do this targeted attack on those that are more well-off when they are also focused on meeting that cost of retirement and aged care,” Ms Steggall told reporters at Parliament House.

“I guess I would question whether it’s to detract from a lack of fiscal policy to address (the) cost of living that is hurting Australians,” she said.

The Coalition has accused Labor of breaking an election promise by announcing the policy, given Prime Minister Anthony Albanese vowed before winning government he would make no changes to superannuation.

The government has said voters can remove Labor from government if they don’t like the proposed reform.

Ms Steggall, who represents the well-heeled Sydney electorate of Warringah, said she was frustrated the government had broken its promise.

“The question that is coming back to me is what else does the government have their sights on,” she said.

“The Albanese government went to the election with a promise to close the loopholes on multinational corporate tax and tax avoidance.

“Now, we haven’t seen any action on that front from the government, but we’re seeing this very class warfare targeting of superannuation.”

Senate kingmaker David Pocock on Monday said he was broadly supportive of the “modest” changes.

But he said it was time for a broader conversation around welfare payments and other tax concessions.

“When you want to start actually dealing with some of the root causes of the housing crisis and look at things like capital gains discount or negative gearing … good luck – the major parties simply don’t seem to want to have a sensible debate,” he told ABC Radio.

With the government’s superannuation changes sparking speculation Labor may have other tax concessions in its sights, Senator Pocock said the stage 3 cuts “have to be revisited”.

Due to come into effect from 2024, the cuts have been the source of one of the most contentious debates around tax reform in recent years.

After the first two tranches offered targeted tax relief to low and middle income taxpayers, the third tranche of cuts legislated by the Morrison government with Labor’s support will scrap the 37 per cent marginal tax bracket and lower the 32.5 per cent marginal tax rate to 30 per cent from 2024.

It will also increase the threshold for the 45 per cent marginal tax rate, so people earning between $45,000 and $200,000 will pay the same 30 per cent tax rate.

Treasury costing of the policy released late last year revealed the hit to the budget had blown out by $11bn from $243bn over a decade to $254bn.

The Labor government has so far stared down pressure to backflip on its election commitment to keep the stage 3 cuts, with critics – including some within Labor – arguing they will worsen inequity at a time when the Australian economy is struggling.

Senator Pocock suggested the money would be better spent elsewhere.

“We’re told we need to be really careful about lifting the rate of Jobseeker because that could be inflationary, yet that $250bn of tax cuts, most of that’s going to the wealthier Australians (who) are somehow exempt from being inflationary. I just don’t get it,” he said.

“You know, if we wanted to do away with bracket creep for people at the low end, there’s better ways of doing that than the stage 3 tax cuts.”

But Workplace Relations Minister Tony Burke ruled out amending the policy – at least for now.

“Our position hasn’t changed,” he told ABC Radio on Monday.

“But our determination to act on cost of living, I think, is there for people to see.”