Home Australia I thought it’d never happen in Australia, but now we have inheritance tax by stealth: PETER VAN ONSELEN exposes Albo’s shameful new super raid and reveals who will be forced to sell off their assets

I thought it’d never happen in Australia, but now we have inheritance tax by stealth: PETER VAN ONSELEN exposes Albo’s shameful new super raid and reveals who will be forced to sell off their assets

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Jim Chalmers and Anthony Albanese are willing to make one last effort to try to pass their retirement reforms, if representatives don't stand in their way.

Labour’s broken promise on superannuation is a textbook example of why politicians cannot be trusted to run the country or the economy.

And Prime Minister Anthony Albanese’s proposal, which focuses on increasing the tax on holdings over $3 million from 15 to 30 percent, is not dead yet.

Albanese specifically ruled out such changes ahead of the 2022 election. Once in power, he did a backflip, breaking his word.

Now Labor is hoping to get its super changes passed quickly in parliament in February, rather than waiting a few months and first securing a mandate at the polls.

Albo’s changes would also not take effect until the elections are over. In other words, the problem is in the tail and the government hopes you don’t notice.

Thus, Albo would get the broken promise legislated, but would prevent the people from feeling its impact until they have already voted him back into office.

It is a petty and deceptive policy. Labor hopes to deceive voters into believing that they and theirs will not be affected by the broken promise, in the hope that there will be no backlash.

Labeling the changes as nothing more than reinforcing a tax minimization loophole is misleading and deeply inaccurate; Yet that is the way Labor characterizes its broken promise.

There are multiple levels of politics to what is wrong with the proposed super changes, beyond the simple fact that it is something the current government has pledged not to do.

Jim Chalmers and Anthony Albanese are willing to make one last effort to try to pass their retirement reforms, if representatives don’t stand in their way.

Let’s start with the main policy itself. The Prime Minister and Treasurer want to increase the tax on super holdings exceeding $3 million, from 15 per cent to 30 per cent.

At first glance this does not seem far-fetched. After all, $3 million is a lot of money, so why shouldn’t someone with that amount of cash pay higher taxes?

The Treasurer uses rhetoric by claiming that 99.5 per cent of Australians will not be affected by such a change, so the majority of us should support it.

But here’s the problem. The figure of 3 million dollars is a tax on the accumulated Assets held in super that are used to earn an annual income.

On average, that would provide about $150,000 a year to live on, which is already taxed by the super laws.

Taxing capital on top of that erodes someone’s savings to fund their entire retirement over the long term, as the cost of living rises.

It therefore becomes a stealth inheritance tax.

One might still think that that is not unreasonable given the amount we are talking about. But the Labor Party proposes that figure of 3 million dollars without any indexation.

$3 million in super will have a different meaning in the coming decades and act like an inheritance tax, writes political editor Peter van Onselen

$3 million in super will have a different meaning in the coming decades and act like an inheritance tax, writes political editor Peter van Onselen

That means the tax will affect more and more of us as the years go by. Much more than 0.5 percent of people will be affected.

In the same way that a dollar today is not worth what it was worth a decade or more ago, in the years to come $3 million in super to fund retirement will be something that more and more people will have.

In tomorrow’s dollars it won’t be worth what it is worth today, but the 30 percent tax would be set in stone rather than indexed to inflation, for example.

In other words, over time, the tax will hurt more and more voters, giving the government of the day more and more tax revenue without needing to bring a tax increase to the elections.

But the policy’s failures do not end there.

Arguably the worst part of what is proposed is that it taxes unrealized gains. That means that if your super is made up of investment property, for example, if the value of that property increases, you will be expected to pay government tax on the highest appropriate assessment.

That is even if you No sell it. And even if the rent increases don’t match.

This is a policy that will force people to sell their assets, which is especially problematic for farmers and small business owners, who often put their tangible assets into super so the next generation can rent the properties and continue farming. or trading.

The next generation pays their retired parents a rent they can live on before inheriting the property to continue the business.

But this policy will end that and force asset sales, just when older retirees don’t want to sell.

It’s embarrassing, especially considering Albanese pledged not to do this before the last election.

Now he is rushing this legislative change through parliament before voters can express their collective opinion.

Three ways Albo’s retirement changes would affect Australians

* It’s a secret inheritance tax: Taxing Australians’ retirement principal erodes the savings they rely on to fund their entire retirement, all while the cost of living steadily rises.

* Over time, the cost of taxes will hurt more Australians.. In the coming years, more and more people will have $3 million in super to fund retirement. But the tax will remain the same: 30 percent.

* The plan taxes unrealized profits. That means that if your super is made up of investment property, for example, if the value of that property increases, you will be expected to pay government tax on the highest appropriate assessment, even if you don’t sell it. That’s even if the rent increases don’t match. Will force retirees to sell their assets

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