A plan by the Albanese Government to slug super fund members whose super had gone over the $3 million mark, with a 30% tax on any dollar amount over $3 million, is set to be rejected. Treasurer Jim Chalmers called this “unfinished business”, but Parliament is set to finish all conversations on this subject.

According to The Australian’s Rosie Lewis, the Better Targeted Super Concessions Bill will be KO’d by the crossbenchers, with seven out of 10 giving the possible legislation the thumbs down. Even the Greens opposed the Bill because they wanted the 30% slug to kick in at $2million!

Before examining why the crossbenchers opposed the Treasurer’s super tax, let’s look at the Bill. Here goes:

1. It would have applied to the value of super over $3 million.
2. For that part of super over $3million, the tax would have gone to 30% instead of the usual 15%.
3. It would hit gains that would have happened but hadn’t been realised as income. Effectively, this means that paper gains from stocks and other assets in a person’s super fund would be taxed as prices or values rose.
4. Those people who might have their farms, factories or business premises inside their super fund could be forced to sell these assets to pay tax on their more valuable super assets!
5. The $3million benchmark wouldn’t be indexed so over time young people’s super would gradually end up bigger than $3million and the super tax would net more money for Treasury.

Not surprisingly, the National Farmers Federation and the Council of Small Business Organisations Australia were publicly angry in their opposition to the Bill. “This bill must be blocked,” NFF president David Jochinke told The Australian. “Thousands of farmers have placed their assets in super so they can lease the farm business to the next generation. It provides retirement income for parents while often giving their children the oppor­tunity to continue the family farm. This tax will undermine all of this.”

Lewis says David Pocock, David Van, Gerard Rennick, One Nation’s Pauline Hanson and Malcolm Roberts, Ralph Babet and Tammy Tyrrell rejected the “super tax”, while Jacqui Lambie has spoken against the proposed measure but has not categorically said ‘no’ to it.

Clearly, this is dead in the water, at a time when speculation is mounting that the Federal election now looks like it will be called for April 12, just after the WA state election, which will be held on March 8. The alternative dates for the Federal poll would then be May 3 or May 10 and it has to happen no later than May 17.

Whatever the date, it’s clear that Labor has a fight on its hands to retain power, so losing this super tax battle might be more of a plus than a negative for the Prime Minister. Undoubtedly, the Coalition would have invoked the arguments used against Bill Shorten’s super and tax changes in 2019 that were portrayed as Shorten shrinking the inheritances of younger Australians from their parents and grandparents.

Here's the latest poll findings and underlines how close the election is set to be.

Source: politicalpulse.net

This was the tax we Aussies and Labor did not have to have!