Chief justices admonish Treasury over $3m super tax

Two of Australia’s most senior judges have told the Federal Treasury that judges are not public servants and to believe otherwise may well result in the Government’s approach to its $3 million superannuation tax cap being challenged in the High Court.

In an extraordinary reinforcement of judicial concerns about the Government’s approach, both the Chief Justice of the Family Court, Will Alstergren and the Chief Justice of the Federal Court, Debra Mortimer, have jointly made a formal submission warning Treasury and the Government of the consequences.

In particular, the two senior judges have pointed to the attitude of Treasury officials stating: “From the evidence given by Treasury officials before the Committee, we are concerned that there is a failure to appreciate the seriousness of the likely consequences of these proposals. Those consequences include the potential for a challenge to the legislation in the High Court, on subject matter that affects each High Court Justice, as well as Judges of our Courts”.

“The most serious consequences are the likely institutional effects on recruiting to, and retaining in, the federal judiciary individuals from more diverse backgrounds, with the very best legal minds. No proper basis has been established for the federal government devaluing the incentives to take a federal judicial appointment,” the two judges said.

“After considering the evidence of the Treasury officials and some of the other evidence put before the Committee, it seems necessary to observe that judges are not public servants and have never been employees of the Commonwealth.

“Therefore, comparison of judges’ positions with the perceived need to include former federal public servants with defined benefit pensions in this new tax misconceives the position of the judiciary in a representative democracy such as ours. In any event, the comparison is invalid because there are significant differences between defined benefit schemes and statutory judicial pensions.”

“The judiciary is the third branch of government. As Michael Black so clearly explained, judicial pensions that are stable and ongoing have to this point been regarded as a core aspect of ensuring judicial independence. People who take judicial appointments, at the federal or state level, rely on the existence of these benefits, and the financial security they provide in retirement, as a fundamental part of the equation in giving up private practice.”

“The reduction of these benefits by a policy framed by the Executive and endorsed by Parliament risks being seen as an attack on judicial independence, especially in the federal sphere where so much litigation occurs with the Commonwealth as a party. The purported exemption of serving judges from an immediate imposition of this new tax does little to diminish the concerns we have identified,” the two judges said.