Skip to main content

Chief justices admonish Treasury over $3m super tax

Mike Taylor8 May 2024
Parliament House

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.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

Subscribe to comments
Be notified of
5 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Treasury Rubbish Again
21 days ago

Imagine “Treasury failing to understand the seriousness of likely consequences of proposals”.
Sounds like EVERY decision Treasury makes about Financial Advisers.
Let’s reduce Advisers costs with a 7.5% GSTax INCREASE ON ADVISER FEES.
Treasury STINK,
Treasury are ideologically CORRUPT.

Anonymous
20 days ago

The proposed tax shouldn’t go ahead full stop, especially where you feel it necessary to relax the rules applying to the tax for public servants alone and not the general public.

Patrick McMenamin
20 days ago

The Judiciary should attack the fundamental injustice of taxing unrealised gains, particularly as it seems this could result in multiple taxation of the same “gain” as superfund balances rise and fall through economic cycles.

IFA Man
20 days ago

Now, while I do empathize with their dislike of the proposed tax, they should not be exempt just because they are judges.
So they think it’s ‘unfair’ to tax the judiciary the same as all other taxpayers, they don’t like it, they are not ‘public servants’, and if you try to implement it on the judiciary they will appeal to the High Court which is made up of other judges who will be of the same mind as the appellants as they are also judges impacted by this ruling. Conflict of interest, much?
But other than that, surely they would have to recuse themselves (the High Court judges) in a case for which they have a vested interest? Which would mean that a bunch of ‘normal people’ (you know, a jury of their peers) might get to judge the judges.
Oooh, pick me, pick me.
Of course if they want to attack, in the Hight Court, the very nature of taxing unrealized gains then I am all for it.

bemused
20 days ago

This is the most bizzare logic I’ve read in about 20 years. Dear Judges, the term Oxygen thieves comes to mind.