Interview with Laura Jayes, AM Agenda
1 March 2023
LAURA JAYES: Well the fight over superannuation will rage all the way to the next election. Yesterday's announcement has ensured that the Prime Minister stands accused of breaking an election promise by doubling tax on multi million dollar nest eggs. Joining me live now is shadow finance minister Jane Hume. Thanks so much for your time. I get the thin edge of the wedge argument. But if we could just stick on this one change for a moment. What's so wrong with this change?
JANE HUME: Well, other than the fact that it is a massive broken promise and a breach of faith to the Australian people, Laura, where do I begin. Before the election, Jim Chalmers and Anthony Albanese said that there would be no changes to superannuation. They said that there would be no changes to taxes other than multinational tax, Jim Chalmers made that pledge. He has gone back on that pledge less than nine months in to a new government. So where do we go from here? Last week, Jim Chalmers and Anthony Albanese started a conversation with the Australian people about the purpose of superannuation. Well, we now know what the purpose of superannuation is in Labor's mind. It's to tax Australians more Australians that have relied on a superannuation system, put more money in because they had the opportunity to do so, sold businesses and put money into superannuation, sold a family home and put money into superannuation. Well, they wouldn't have made those decisions had they known that this was coming had Anthony Albanese and Jim Chalmers stuck to their guns and stuck to their promises.
LAURA JAYES: Okay if you look at this tax change, it's a doubling of the tax essentially, if you have $3 million in your superannuation account, though, you can still draw down about $180,000 a year in retirement. Still pretty decent, isn't it?
JANE HUME: That's potentially so, but if not indexed, Laura, which means that $3 million today is going to be very different to $3 million in five years time even $3 million in two years time when this kicks in. We know that 80,000 Australians are caught in the net now. Let's ask labor how many Australians they expect to be caught in its net by 2025. And for younger people that are saying this won't affect me. Well, when you retire, what will $3 million be worth then? So this has all sorts of potential implications for lots of Australians, not just the first 80,000. And let's be frank, last week, labor was saying it was only 36,000 pay, but now it's 80,000. It does seem to be changing from day to day. It does seem to have been quite rushed, quite knee jerk. This seems to me to be a response from Anthony Albanese because he could see the superannuation conversation running away from him. And sure enough, the next conversations are running away too. Just this morning, we saw that Jim Chalmers and Anthony Albanese can't agree on whether they're going to rule out changes to capital gains tax, particularly those on the family home. We've seen Stephen Jones coming out and talking about the cost of investment properties to the budget as well. So what else are they going to come after in the name of budget repair that is going to affect every Australian out there? They promised no new taxes. They've already broken that promise.
LAURA JAYES: You're right, a good reminder. Last week, the brief was it will only affect 36,000. Yesterday it was 80,000. But when you look at inflation and where this is going to be in the next couple of years, it's going to be far more than 80, 000 people but back onto the sustainability argument. Perhaps Angus Taylor said it best when he was a little younger, have a look.
ANGUS TAYLOR EXCERPT: We need a fairer superannuation system, which has integrity. And this means that those of us who can afford to pay should be paying our fair share. This is not a change that's going to send people broke. It's a fair change. And it's an integrity measure which allows us to pay for other things. Some people were contributing millions of dollars into super. And it's totally inappropriate that someone who's contributed millions and millions of dollars continues to get those difficulties.
LAURA JAYES: I'm sure Angus loves that we're playing that ad nauseam at the moment but he did make the argument that those that can pay or should, it's an integrity measure. It's about fairness. What has changed?
JANE HUME: Well, I can tell you exactly what's changed. First of all, back then it was about making the superannuation system fairer, not not paying off your budget, not managing your budget using people's retirement savings. Second of all, that change allowed us to allow more people to put more money into super when they could afford to do so. Like when you sell a business, like when you downsize your family home to a smaller home and people trusted us and said you've given us that opportunity. And now Labor have reneged on that promise. This is not about making the superannuation system more sustainable. This is about making the budget more sustainable. There is a better way of making your budget more sustainable. How about you reign in your spending? How about labor stop that spending ambition already $23 billion more in spending in the last budget alone and who knows what we're going to come up with in May. It's become perfectly obvious that when Labor run out of money, they come after yours. This time it's retirees.
LAURA JAYES: Okay, let's look at that. The fairness argument, Kieran Gilbert asked the PM yesterday about the defined benefit scheme for politicians. I don't think that should be changed but in the sake of fairness, they're setting this fairness argument up. Is that fair game now?
JANE HUME: Well, it certainly shouldn't be because we know that that's just as expensive to the public purse as his private savings. And in fact, some of those more generous public sector schemes would see the equivalent of balances in the tens of millions of dollars. Now if you're going to challenge those in the private sector, you should also challenge those in the public sector. And that includes politicians that are going to be leaving office with very large balances indeed, the equivalent of very large balances indeed.
LAURA JAYES: I mean, I don't know if, is this a Coalition policy now? You know, would you change this on your own volition at the next election? Because I think there's still a great nobility and, you know, dedicating your life to public service. We still want the best and brightest people in there. We know the long hours and that the sacrifices that are made sure, and you're paid pretty well. But is this the quid pro quo that you dedicate a portion of your life to politics and then you get the payoff at the end?
JANE HUME: Well, if you're going to make retrospective changes, and let's be honest, this is a retrospective change because it isn't grandfathered. It is a retrospective change and that people have relied on making decisions in the past that are going to be affected by this in the future. I think what's good for the goose is definitely good for the gander. Understand that public servants now are not under that old system. They like politicians now pay money into superannuation, just as normal people in the private sector would do. But those in the past that have taken advantage of a very generous system will be on pensions for a very long time that will cost the public purse. I'm not entirely sure why the Labor Party would exempt public servants, but impose that upon those that have saved in the private sector, specifically those that have put money into a self managed super fund and taken control of their own financial future within the rules that existed at that time. That seems profoundly unfair to me. If you want a fairer super system, it should be fairer for all Australians, not just some Australians.
LAURA JAYES: You've got a chance to fight for this at the next election. If it is legislated this term but it doesn't come into effect until after the next election. What is your commitment today, that you will repeal it?
JANE HUME: Well, we will see exactly what this legislation entails. We'll certainly block it. We'll certainly amend it but we know that it's going to sail through the Senate with the help of the Greens and potentially the independents as well. Although I would think that they would have pause for thought on this one. A lot of those people that will be affected are in their electorates and they'll probably want to consult with them before they make a definitive decision and not be blinded by the rhetoric of this Labor government, which is talking about fairness in the superannuation system. But in fact, this is simply a budget repair measure. We would hope that you're rather than legislate in this time of Parliament, Labor would be true to their word, they would seek a proper mandate and legislate in their next term of Parliament, which is exactly what the Coalition did back in 2016, flagged the change, we were elected in, implemented the change that's the way it should be. Anything else is simply tricky.
LAURA JAYES: Okay, but if you're so incensed about this announcement yesterday, if it's such a bad broken promise, why can't you say today that black and white, if you're elected at the next election, you'll reverse this decision?
JANE HUME: Well, I think that we would love to be able to do that. However, as you know, Laura, getting things through a hostile senate is never easy. This is an easy senate for the Labor Party, you know that the Greens are going to help them. The next Senate is unlikely to be friendly towards a Coalition government. It would be very difficult for us to put that legislation forward with any expectation that it would get through. Now let's reassess what the Senate looks like. Let's reassess what a Coalition government would look like in government after the next election.
LAURA JAYES: It's all about negotiation isn’t it, that was the whole last term?
JANE HUME: I think if there is there is a large greens component in the next Senate, we would find that we would never get any repeal to this sort of legislation through and I think you know that too, that's why we want to see it blocked now, that's why we want to see amended now to make sure that it doesn't affect those people that have relied on the system the way it was, rather than the way that Labor would like it to be. Their purpose is Superannuation is to use it as a cash cow to pay for their spending committees. We would like to see Labor control their spending in the budget rather than coming after your money.
LAURA JAYES: Should we take that to mean that you will be making policy this term based on what you think can get through the Senate?
JANE HUME: Well, we'll always make policy based on our principles and our principles will always be do not tax where you do not need to. We are always going to be a party of lower taxes and we certainly don't intend to make retrospective changes particularly on people's retirement savings when they have relied on a system in the past and made decisions based on that system in the past. So I think you know exactly where the Coalition would be coming from on superannuation and on managing the budget too, we want to spend within our means.
LAURA JAYES: Alright, thanks so much for your time, Jane. Really appreciate it. We'll be speaking to some of the teal independents as well. It will be really interesting to see what they say about this change.
JANE HUME: Thanks so much. Great to be with you, Laura.