Govt faces being thwarted on $3m super tax

The Government’s efforts to navigate its $3 million superannuation tax cap legislation and associated taxation of unrealised capital gains through the Senate has hit another hurdle, with Tasmanian Independent Senator, Tammy Tyrrell scotching suggestions she had been persuaded to deliver her support.

Tyrrell went to the trouble of making a definitive statement in the Senate declaring that she would not be relenting in her opposition to the legislation – making passage of the bill through the Senate before Parliament is prorogued remote.

“Apparently, there have been a couple of rumours getting around in the last couple of weeks about where I stand with the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023. I’m here to set the record straight. I don’t support the bill,” the Tasmanian senator said.

Reflecting the level of Labor Party lobbying which has taken place in recent weeks, Tyrrell said she wanted to dispense with the rumours.

“Labor say their bill targets the top end of town. Their plan is that people with $3 million or more in their superannuation need to pay more tax. In theory, it sounds okay. Most of us would say $3 million is a fair chunk of change, but that amount won’t be indexed.

“So, as we move forward 10 years or 20 years, suddenly what seems like a lot of money now won’t be a lot of money then. It means more and more Australians will be caught up in this tax,” she said.

“….,but the real secret assassin of this bill is the unrealised gains. Think of a Tassie farmer who owns an agricultural property that’s been in their family for generations. Maybe that land is worth a few million dollars now and is classed as one of their assets. This bill would ask farmers to pay tax on that land—pay tax on something they haven’t sold and something they don’t have the cash in the bank for, Tyrrell said.

“It makes absolutely no sense at all. So, suddenly, this bill, which Labor says only targets millionaires, is targeting average, everyday working people. That’s not giving people a fair crack.”

“I agree that super needs to be taxed in a way that’s fairer and more sustainable. The administration of superannuation is needlessly complex, and it adds costs to everyone who uses the system. Super tax concessions are expensive and will require eventual wind back, but it’s got to be done in a way that reduces complexity, gives certainty and improves sustainability,” she said.

“Labor’s better targeted super concession bill isn’t the right way to do it, and that’s why I don’t support it—so rumour dispensed,” Tyrrell told the Senate.