Interview with Chris Kenny, Sky News
6 March 2023
CHRIS KENNY: So as you know, Labor have defended their broken promise on superannuation taxation, the doubling of the tax on accounts worth more than $3 million. They've defended that by declaring that only one in every 200 people will be affected. That is 0.5% of people with super will be hit by the new tax hike. Well, that goes up every year of course, it'll be double that by the end of the decade and today, in the Senate, Matt Canavan, managed to extract a timeline for when one in 10 Australians will pay the extra tax.
EXCERPT FROM SEN. GALLAGHER: In 30 years Treasury projects that roughly only the top 10% of earners will retire with superannuation balances of around 3 million or more.
CHRIS KENNY: So one in 10. That's quite a few people, right? That's 20 times more people than Labor is talking about right now and 30 years is some way off. Fair enough. But of course, that means that tens of thousands of people who are now paying super will be hit, like people in their 20s and their 30s. Now, at least 10% of them will now pay the double tax on their superannuation eventually. I spoke to finance minister Jane Hume, the Shadow Finance Minister Jane Hume earlier about how this is quite a different reality to the tiny little cohort that Labor's been talking about.
JANE HUME: That's exactly right. Last week, we heard that it was only going to be 36,000 people that were going to be affected. Then the week before after that it became 80,000 People only point 5% of the population. Now we're hearing that it's going to be 1% of the population by 2030 and 10% of the population by 2050. So you can see why this policy is so tricky. Why Labor have not just gone back on a promise, but they've developed a policy that by its intentional design features will cost Australians more and more as the years wear on. This is not just about the top end of town, the people with $3 million in superannuation today, this is going to affect generations to come. Talk about intergenerational equity. I don't think Labor's money is where its mouth is, or they're not walking the talk. I probably should say they've got plenty of money where their mouth is.
CHRIS KENNY: Yeah, look Labor would have known these figures all along. They've had to be squeezed out of them through Senate questioning today and then in the House of Reps and Labor are really downplaying the revelations. Here's what the treasurer Jim Chalmers said in Parliament.
JIM CHALMERS EXCERPT: Right now in 2025, less than half of 1% of people will be impacted. By the time we, let me finish. Wait for it. Let me finish. By the beginning of next decade. It will be around 1%. And the answer that Senator Gallagher, Minister Gallagher, the great finance minister and the other place gave a moment ago is in 30 years, one in 10 People will be impacted by it.
CHRIS KENNY: Now, this is interesting, Jane, because when you're talking about Super, of course, you're talking about the future. What happens in 10, 20, 30 years is important. So what this admission means today is that if you're under 35, if you're in the workforce and you're under 35, then there's a 10% chance, 10% of those people will end up being caught by this super tax doubling.
JANE HUME: And the number 10% doesn't seem to mean an awful lot to people. However, today the top 10% of income earners earn above $131,000. That doesn't sound like an awful lot. So you can understand why people would be rightly nervous, not only has this policy been framed in such a way that unrealised capital gains or all of a sudden are able to be taxed. That's a giant change to the tax system. One we've never seen before in Australia, indeed in any other jurisdiction really. And the fact that it's not indexed means the net grows wider and wider every year. But most importantly, I think, Chris, is that this policy is designed to rake in money for budget repair, not to improve the superannuation system, not to make the superannuation system more sustainable into the future, not to help more young people save for their retirement. It's for budget repair now and of course, the best way to repair the budget is to stop spending, to control those spending urges and that's what we'd like to see the government do. Not come after the hard-earned savings of retirees who have relied on a system set up the way it is.
CHRIS KENNY: Nonetheless, Newspoll today shows that almost two thirds of Australians support this tax increase. How do you deal with that level of popularity for the measure?
JANE HUME: Well, I wonder what would have happened if that question that was surveyed was not do you agree that people in the top point 5% should be taxed more on their superannuation balances to pay for budget repair? Rather, it was, do you think that governments should be allowed to break their election promises willy nilly or perhaps do you agree that in 30 years time that 10% of people should have to pay more tax on their superannuation earnings? I think if those questions hadn't been asked, you might have got a very different response.
CHRIS KENNY: Yeah, we will see, the debate has got a long way to play out Senator. When it comes to this policy, Peter Dutton has made it very clear that the coalition will promise to repeal this tax increase. But is that all you would do or will you take a package to the next election that proposes some sort of reform, clarification, simplification, whatever you like to describe it, of the superannuation tax situation?
JANE HUME: Well, I think that Australia will be very clear on exactly what our superannuation policy proposals will be prior to the next election, but we will go to the election promising to repeal this legislation this unfettered-
CHRIS KENNY: But you'll have more than that. There'll be some sort of reform that you will take to the election?
JANE HUME: We will take a package to the next election that is about superannuation, that I think will encourage Australians to save for their retirement, that will encourage people to put money away, but also will give them a much better chance of financial security in retirement, rather than surprising people with a brand new tax on their retirement savings. So they're breaking promises right, left and center. This is on top of, you know the promise of $275 off your energy bills. This is another broken promise from this government and only nine months in.
CHRIS KENNY: Senator Jane Hume, thanks so much for joining us.
JANE HUME: Great to be with you, Chris.