EDITORIAL: Hubris creeps as Labor steams ahead with super tax

The ill-will between Anthony Albanese and the Greens is plain to see.

It was particularly evident this week, with the Prime Minister barely able to contain his glee as he stood next to his newest Senator Dorinda Cox as she dropped buckets of scorn on the party she turned her back on (after they first turned their backs on her).

But neither Mr Albanese or the Greens is going to let that bad blood stand in the way of pushing through the Government’s controversial changes to the way superannuation is taxed.

A deal looks all but certain to be sewn up, with Greens treasury spokesman Nick McKim affirming his party’s strong in-principle support for the reforms, which would see Australians with superannuation balances greater than $3 million pay an extra 15 per cent tax on their account earnings.

“Over time Australia’s superannuation system has become less about providing a dignified retirement for working people, and more of a vehicle for wealth accumulation. This needs to change,” Senator McKim said.

“The Greens want to ensure that very wealthy Australians pay their fair share of tax, so that governments can do more to support people who need it.”

The Greens look likely to walk away from their demand Labor drop the balance threshold from $3 million to $2 million.

The minor party’s readiness to support the Bill means that the Coalition’s stated opposition to the policy is merely symbolic. They will have no power to stop or water down the changes, which tax experts warn represent a fundamental upheaval of our nation’s long held taxation principles.

Treasurer Jim Chalmers has waved off that criticism as breathless, self-interested hysteria and not reflective of the concerns of the broader Australian public.

“The concessions here are still very generous. We’re not eliminating tax concessions for people with big balances, we’re still providing very substantial tax breaks, just slightly less substantial,” he said this week.

“A lot of the same (critics) say we need to dramatically increase defence spending, we need to dramatically cut the company (tax) rate, we need to abandon the changes to make superannuation tax concessions fairer, and we need to deliver bigger surpluses.”

Is this the first sign of hubris creeping in again after Labor’s election win? Critics of the plan are genuine in their concerns that taxing unrealised gains — money that superannuants are yet to see and may never eventuate — is a dangerous path with an unknown destination. Once the concept of taxing unrealised gains has become embedded into our tax system, it’s suddenly a lot easier to apply it to other assets or investments.

Labor’s steadfast refusal to index the $3 million threshold, which would confine it to the very rich Dr Chalmers says are its target, has allowed its critics to argue that it won’t take long before a much wider group of earners will eventually fall foul.

His glib dismissal of those concerns bodes poorly for the character of this term of Parliament.

Responsibility for the editorial comment is taken by Editor-In-Chief Christoper Dore.