Labor ‘salivating’ at nest egg raid under superannuation policy, Liberal Senator Michaelia Cash claims

Liberal senator Michaelia Cash has labelled the Federal Government’s new $3 million superannuation tax policy as an “insidious form of taxation”, telling party faithful Labor was “salivating” at raiding the nest eggs of Australians.

As Liberals gathered in Perth on Saturday for the first State council meeting since the May 3 Federal election drubbing, Senator Cash used her speech to attack the proposed tax.

Labor’s plan to tax people on gains they make on any assets held in their superannuation accounts, starting with those with a balance of $3m or more, was “one of the worst taxes ever dreamed up”, she said.

“If you have a superannuation fund of $3 million or above and it holds assets like property they want you to pay tax on the rise in value of that property over any 12 month period,” Senator Cash said.

“And here’s the real evil part about this tax — it will be levied even if you don’t sell the property to realise the gain – you will be taxed on money you’ve not actually made.

“Worse still, if that same property drops in value in later years, you don’t get any of what you’ve already paid back from the government.”

Former Reserve Bank governor Philip Lowe, former Treasury secretary Ken Henry and Wesfarmers chief executive Rob Scott are among those who have expressed concerns about Labor’s plan to tax unrealised gains in high-value super accounts.

“There are fundamental concerns with taxing unrealised gains, that does create a dangerous precedent,” Mr Scott told The AFR earlier this week. “If this was to go ahead, then the question is, what’s next?”

Dr Lowe said Labor should reconsider the tax.

“I am a supporter of good public policy design, but I am not convinced this is an example of it,” he told The Australian.

Senator Cash said Labor would get a $40 billion tax revenue windfall from the new Super hit over the next decade.

“The government has baked into its budget proceeds of the tax, which it expects will reap as much as $2.3b in its first full year and as much as $7b a year after that,” she said.

“Now Labor is trying to spin its way out of this by saying it will not affect that many Australians. And those who it will affect are rich and can afford it.

“But as always with Labor that’s not the whole truth.”

Senator Cash highlighted farmers as among those who may also be caught up in the plan, who may hold all or part of their property in their super fund.

“If it goes up in value they won’t necessarily have enough cash to pay the tax bill – they may well be forced to start selling assets,” she said. “The other insidious part of this tax is that it is not indexed.

“So while $3m sounds like a lot of money right now, in 10, 20 or 30 years many more superannuation funds will reach that level and will be forced to pay the tax on unrealised gains.”

Senator Cash said she expected the new Super tax to pass Parliament given Labor’s lower house majority and ability to team up with the Greens in the Senate.