Lurking within Treasurer Jim Chalmers' proposed tax changes to our superannuation is a clause that experts say give him taxing twisting powers akin to King Henry VIII!

Law experts claim that Treasurer Jim Chalmers’s super tax bill has a secret clause that’s akin to what King Henry VIII used to rule England by decree to create his own church, annul three of his marriages and behead two of his wives. Of course, while the Treasurer has less serious plans afoot, his super bill before Parliament might drag in more potential taxpayers into his super tax net!

In case you’ve forgotten, the Treasurer plans to tax the earnings of super trustees on the part of their super over $3 million at a 30% rate. And he has attracted critics for two reasons.

First, he has annoyed former PM, Paul Keating for not indexing the $3 million that will capture lots of younger super contributors over coming decades, as their super balances grow and the $3 million threshold remains unchanged.

Second, and this is the killer in his bill — he wants to tax unrealized gains over $3 million. Right now with super, you only pay tax on assets/investments when you pocket or bank the gain. When you "realise" your capital gain you get taxed, which is fair enough.

While the Treasurer says his tax will capture super earnings over $3 million from only 80,000 people, without future indexation the $3 million threshold will see 1.2 million people paying tax under this legislation in 30 years' time. Treasury thinks the new super tax would net $2.3 billion in its first year and more than $40 billion over the next decade.

But wait, there’s more. And this looks like a right royal taxing twist of Henry VIII proportions!

The Australian reports that there’s a clause in Chalmer’s Better Targeted Superannuation Concessions and other Amendments Bill thatcarries his super tax to Parliament, which will mean the Treasurer could “­adjust key parts of the tax plan once he sees how much money it is bringing into the Treasury.”

Jim Chalmers is seeking special powers that would allow him to net more people with his planned superannuation tax hike without parliamentary approval, under a little-known clause in his bill to tax the unrealised capital gains of high-value funds.

Using a so-called “Henry VIII” clause, constitutional experts said Dr Chalmers would be able to ­adjust key parts of the tax plan once he sees how much money it is bringing into the Treasury. For the political purist, The Australian says the clause is section 296-60, “which gives the Treasurer power to further modify super tax rules after the original bill is approved by parliament.” And that’s where, constitutional law expert Professor Greg Craven says the Treasurer is channelling the work of Henry VIII:

“A clause that allows the executive government to alter an act of Parliament or its effects is known as a Henry VIII clause because it bypasses the necessity for parliament to amend its own acts,” Professor Craven said.

While within a law passed by parliament, there’s always scope for rules of how a bill will work in practice, what the Treasurer is proposing has a much bigger impact.

Section 296-60 has to go, or it should be off with the Treasurer’s head — politically, of course!