Independents team up to oppose tax rise on superannuation (14 Aug 2024)
Article summary: Eight independent MPs, including six "teal" members and two community independents, have united to oppose the Australian federal government’s proposal to tax unrealised gains on superannuation balances exceeding $3 million. This plan, spearheaded by Treasurer Jim Chalmers, aims to impose an additional 15% tax on the earnings of larger superannuation balances, bringing the total tax rate to 30%. However, the proposal faces significant resistance, not only from these MPs but also from key crossbench senators, making its passage uncertain.
The MPs, including Kate Chaney, argue that taxing unrealised gains—valuation increases of assets like property and shares before they are sold—is unfair and impractical. They express concern about the negative impact on farmers, small business operators, start-ups, and public servants with defined benefit pensions.
Chaney, who represents Curtin, criticised the tax for its impracticality and deviation from established tax principles. The MPs stress that while they support appropriate superannuation taxation, this approach would harm self-managed super funds and could lead to forced asset sales to meet tax obligations.
The opposition from these influential independents, coupled with the scepticism from crossbench senators, signals a challenging path ahead for the government’s legislation, which aims to raise $2.3 billion annually by 2027-28. The widespread objections suggest that significant amendments may be necessary for the proposal to gain the political support needed to pass.
