Anthony Albanese’s plan to double taxes on super balances over $3 million has been dealt a blow, with the Greens refusing to approve it on the last day of parliament of the year.
The Greens, whose support Labor needs in the Senate to get the legislation passed, continue to block Labour’s Better Targeted Retirement Concessions and Other Measures Bill 2023.
This was despite leader Adam Bandt on Thursday listing 10 more Labor-related economic policy points he would endorse, including Reserve Bank reforms.
Failure to pass this controversial pension bill could mean politics is dead if Labor fails to win the next election scheduled for May, or if the Senate continues to filibuster legislation early next year before it is passed. dissolve parliament.
Labor had hoped to end the year with a plan to punish the top 0.5 per cent or 80,000 retirement savers with a new 30 per cent tax on savings over $3 million, starting in July 2025.
This would be double the usual super contribution tax rate of 15 per cent.
But the Greens oppose it because they want the threshold lowered to $1.9 million to cover 104,141 people, or 0.6 percent of the population.
Labour’s super policy also includes a plan to tax unrealized profits over $3 million.
Anthony Albanese’s plan to double taxes on super balances over $3 million has taken a hit, with the Greens refusing to approve it on the last day of parliament of the year (pictured right with his fiancée Jodie Haydon).
This would see self-managed super funds tax assets that have not yet been sold.
This is a radical break from the common capital gains tax practice of taxing assets after they have been sold and their value has been realized.
The bill is creating uncertainty for self-managed super funds that own real estate and farms, as Labor’s proposed law would require a valuation of assets above a $3 million threshold.
No other country in the world has taxed unrealized retirement gains, and countries like Sweden only apply that approach to general wealth.
The Coalition opposes Labour’s super politics, while MPs Allegra Spender, Kylea Tink and David Pocock have raised concerns about taxing unrealized profits.
The SMSF Association, which represents self-managed super funds, was relieved that Labor’s super bill had stalled, with chief executive Peter Burgess lobbying against taxation of unrealized gains, known as tax split 296.
“At the end of the day, what became clear, at least to me, is that this tax is very unlikely to be passed in the current session week and, assuming the election is not called beforehand, its passage during the session scheduled for February 2025 also seems unlikely,” he said.
‘Suggestions that the bill could be passed during the February 2025 Senate sessions appear to contradict the considerable reservations expressed by MPs.
The Greens, whose support Labor needs in the Senate to pass the legislation, have not yet backed the Better Targeted Retirement Concessions and Other Measures Bill 2023 (pictured, leader Adam Bandt with his deputy Mehreen Faruqi)
“Concerns about the design of this tax appear insurmountable without a substantial revision of the bill.”
Shadow treasurer Angus Taylor also criticized the bill for focusing solely on accrued superannuation but ignoring defined benefit.
This would exempt members of parliament elected before October 2004, including Prime Minister Anthony Albanese and opposition leader Peter Dutton, who would be entitled to a guaranteed lump sum payment based on their time in parliament.
“This regime proposes a different approach for a farmer or small business owner than for a public official, judge or politician,” Mr Taylor told Daily Mail Australia.
‘Those like the Prime Minister, who are lucky enough to have a defined benefit scheme, will enjoy deferred payments and tax rates set entirely by regulation, not legislation.
‘This is a wealth tax, plain and simple. But the Prime Minister has exempted himself.
But a Treasury document explained that the bill would actually target defined benefit retirement.
“The Government’s intention is to ensure treatment broadly proportional to defined benefit interests,” he said.
“Treasury will consult further on the appropriate treatment for defined benefit interests.”
Treasurer Jim Chalmers and other Labor cabinet ministers have yet to publicly accuse the Coalition of spreading false information, even though the Opposition since May has criticized Labour’s proposed laws for excluding defined benefits.
The opposition first raised the issue six months ago in a dissenting report to a Senate economy committee tasked with examining Labour’s super bill.