Superannuation is one of Australia's most important vehicles for building a comfortable retirement. Yet many of us only start paying attention to our super balances later in life. So why is super hitting the news and why am I raising it?
The Federal government is planning a super heist and wants to change the goal posts on retirement savings. They are proposing to double the tax rate from 15 per cent to 30 per cent on all super balances valued above $3 million. This is a very bad tax and a very bad economic policy. I am deadset opposed to the proposed tax in any form and I will tell you why.
Firstly, those with large balances will almost certainly look to divest assets to fall below the $3 million threshold. I would be gobsmacked if those with large balances were not already putting in place plans to move investment away should the tax come in. That means billions could leave the super system, reducing total funds under management. Less capital in super means lower investment returns for everyday Australians.
Secondly, this tax undermines confidence in super itself. Australians have been encouraged to put more into super to secure their retirement. But this change signals that the rules can change at any time, and not in a positive way. That uncertainty will discourage additional contributions and weaken the entire system.
Third, the proposal unfairly targets asset-rich but income-poor Australians, particularly farmers. Many family farms are held in self-managed super funds as part of intergenerational planning. These aren't "wealthy investors". Under Labor's plan, an on-paper increase in farmland value could trigger a huge tax bill, even though no cash is received.
My question to Anthony Albanese is, how do you expect our Aussie farmers who are already doing it tough, to pay a tax bill for a fictional profit? If more farmers sell their land off as a consequence, there will be less fresh Aussie produce on the shelves and higher prices at the checkout.
Lastly, the plan in its current form is that this new super tax will not be indexed and additionally, once legislated, future governments could reduce the threshold even further. This isn't just a tax on today's high-balance holders, it's a tax on middle-income Australians of the future.
If Labor is prepared to break the promise on super, what do they plan next? If this tax goes through, could it open the door for Labor to tax the family home?
A change to super affects everyone and the consequences go well beyond a handful of millionaires.
Andrew Willcox MP
Federal Member for Dawson
Shadow Assistant Minister for Manufacturing and Sovereign Capability
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