Treasurer Jim Chalmers has strongly hinted that Labor won’t compromise with the Opposition to increase taxes on super balances above $3million – despite assurances from Anthony Albanese the government would do such a deal.
The federal government wants to double earnings taxes to 30 per cent for the top 0.5 per cent of retirement savers in a bid to raise $2.3billion a year in revenue.
The Coalition has confirmed it would consider passing Labor’s superannuation policy provided it dropped a plan to slap a new 15 per cent tax on unrealised gains on balances above $3million.
That means a self-managed super fund would be hit with a capital gains tax on the notional value of assets before they are sold, should the paper value of shares or properties in the portfolio increase.
But Chalmers has told 7.30 host Sarah Ferguson the government wasn’t interested in negotiating with the Opposition to get its bill through the Senate, adding he would prefer to deal with the Greens.
‘I’m not convinced that they’re fair dinkum when it comes to making superannuation tax concessions a little bit fairer, and I think my opposite number has made that clear that they’re not interested in that,’ he said.
‘We’ll obviously have discussions with other parties in the Senate to do what we can to pass that legislation.’
This refusal to negotiate with the Opposition was made despite Albanese this week saying the government would negotiate with the Coalition over super policy.
‘We do not have a majority in the Senate; we obviously work with different parties,’ the Prime Minister said.
While Labor has a landslide majority in the House of Representatives, it needs the support of 10 Greens senators to get its legislation passed through the upper house of Parliament.
The Greens want the proposed super tax threshold lowered to $2million, down from $3million under Labor, but indexed for inflation.
Progressive crossbencher senators David Pocock and Jacqui Lambie last year refused to support Labor’s plan to tax unrealised gains, meaning the government could only rely on the Greens in the Senate.
Shadow treasurer Ted O’Brien this week said the Coalition would be open to negotiating with the government on super provided it dropped plans to tax unrealised gains and indexed the $3million threshold.
‘When it comes to all policies, including this one, the Coalition will always be open however that doesn’t mean a blank cheque,’ he told Sky News.
‘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. Now, if he caves in on all of those things and wants to talk about super reform, let’s have a chat about super reform.’
But Chalmers argued his Coalition counterpart had kept on changing his position.
‘Obviously I’ve seen the comments that they’ve been making publicly, including, I think my opposite number said today that they weren’t interested in negotiating,’ he said.
‘He’s disagreed with himself. He had a different view yesterday or the day before.’
While Parliament is unlikely to sit again until next month, Labor is hoping to pass the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill and have it backdated to July 1.
Accountants argue taxing unrealised gains would stop self-managed super funds from investing in technology start-ups.
AMP calculated that refusing to index the $3million threshold for inflation would see the average 22-year-old worker affected in four decades’ time, even if compulsory employer super contributions stayed constant.
They are rising to 12 per cent on July 1, up from 11.5 per cent.