Hume & McAllister, Sky News
3 March 2023
TOM CONNELL: Well each week shadow finance minister Jane Hume and Assistant Climate Change and Energy Minister Jenny McAllister to face off and fire up on the big news and political developments. Jane, Jenny, welcome. Of course it's a truncated version. We'll start with you this week. Of course you both get an opportunity to fire up. If you'd like to, Jenny. How would you like to kick things off?
JENNY MCALLISTER: Oh, good morning. Well, I'm actually joining you from Tokyo and over the coming days, I'm going to be engaging with counterparts from Japan but also around Southeast Asia, about the arrangements we will put in place together as we head towards Net Zero. We've always said that the world's climate emergency is Australia's jobs opportunity. And this is a really important opportunity here in the next couple of days to talk with other countries in our region about the economic opportunities that lie ahead for Australia and that's been an important part of the domestic agenda. It mattered that we legislated our targets and the matters that in the coming weeks we'll put in place clear and certain arrangements for businesses so they understand what their carbon reduction obligations are. That of course has been welcomed by business groups across the spectrum. The only group of people who are actively opposing it, of course, the Liberal Party, we had 10 years of denial, delay and dysfunction when it came to climate and energy policy. And unfortunately, in opposition, the liberals do not appear to have changed. It's a missed opportunity and it's a shame but we're getting on the job.
TOM CONNELL: Alright, Jane can't possibly think what you might be fired up over this week?
JANE HUME: It's been a pretty bad week, I think for Jim Chalmers, Tom. First of all, his national conversation on superannuation was cut short by Albo who pushed him out with an overegged but undercooked super policy, which was a blatant lie, a breach of faith for the Australian public. Second of all, Jim opened the door to capital gains tax on the family home, that went well. Albo had to come out and clean up that mess as well. Poor old Jim was out there with his tail between his legs, certainly a chastened man at a press conference. This whole debacle has essentially opened up internal rivalries between inside the Labor Party and in fact, I think that Jim probably went out there and kicked the cat because who's been absent from the debate this week? It's none other than the Coalition's favorite Labor Minister Assistant Treasurer, Stephen Jones, Stephen Jones, often wrong but never in doubt, the self opening pinata of the Labor Party was clearly told to stop talking about superannuation and just talk about what he knows. Narrow guardrails indeed. So this has been a very bad week, but can I give Albo some advice because there is one labor minister that knows more about superannuation than any other, more than Jim Chalmers, certainly more than Stephen Jones and more than Anthony Albanese, and I'll bet that she hasn't even been part of these policy deliberations. Jenny McAllister, where are you when Labor needs you? I don't even think you've been in the room for this development of this policy and yet we know that you could do a much better job. So my message Albo is time for that reshuffle. Stephen Jones, Jim Chalmers out, Jenny McAlister in.
TOM CONNELL: We have one panelist that has asked me for a promotion for the other but Jenny's far too humble, I can see her shaking her head. I'm disappointed though. Jane. We had Stephen Jones on the program. You must have missed that edition of news day. We'll send you a clip. Let's run through what the debate was like this week, they're maintaining this is not a major change. And it won't come into effect until after the 2025 election has been held as well. The opposition saying still broken promise?
TOM CONNELL: Let's jump off on the indexation Jenny because the current arrangement for the tax free element is indexed but the 30% at 3 million is not indexed. Why not?
JENNY MCALLISTER: Look there's a range of different arrangements and the tax system for indexation. You'll know for example, that income tax is not indexed. We've picked $3 million as the benchmark because we think that that is more than enough for a comfortable retirement and certainly it exceeds the benchmarks that have been established by the major industry groups. The truth is that this is a modest change. It will affect a very small group of superannuants and even though superannuants will still receive tax concessions, just not as generous as the ones that they received at the moment. The truth is that the budget we inherited has a very significant amount of debt. Interest on that debt is one of the fastest growing areas of expenditure in the budget. We need to take responsible steps to repair the budget and this is one of them.
TOM CONNELL: The interesting part about this Jane is the Coalition just voting no, there's no sort of amelioration because in opposition you can look at a bill and say we don't like that aspect, we'll change it. So that means you entirely back say that 32 super accounts with $100 million plus getting very generous tax concessions. That seems fair to you?
JANE HUME: Well, it's not those accounts that we're concerned about Tom, it’s in fact not just the 88 or so thousand people that are going to be caught up in this net and let's remember that it was only 34,000 last week or 36,000 last week. This week it's 88,000 and now we're hearing that in fact, half a million Australians are going to be caught up in this net because that cap is an index. It's an intentional trap, so that more and more people will fall into the net of taxation their superannuation.
TOM CONNELL: Why not just say index it, we’ll support it, but index it, why not?
JANE HUME: I 100% agree. Let's index it. Let's make sure that it's indexed. Let's make sure that we're not taxing unrealised capital gains, yet another thing that hasn't been thought through. Let's make sure that I'm dealing with poor people that have been saving away for forever in a day and those with self managed super funds. What about those people that have already walked away with their superannuation, are we going to start taxing them as well? You know, this is so badly thought out this policy. It is so undercooked and yet they're out there trying to sell a dead horse. I don't even think it's gonna get off the ground. We know too, if it was indexed, it wouldn't raise anything like the amount of money that they're talking about.
TOM CONNELL: So would you be moving such amendments in the Senate, for example, move to index it?
JANE HUME: I'm absolutely certain we'll be moving all sorts of amendments to this because this is really bad, it's going to be bad legislation and we're going to have to try and make a silk purse out of this sow's ear, but we simply can't back it most importantly, because it's a broken promise. It's a lie. They said to you before the election, they would not change super. They would not increase taxes. They're doing both. So what's next, we can't support it.
TOM CONNELL: For the question coming up, Jenny, Jane has endorsed you as the superannuation guru. So taxing notional gains, there's no other tax that does this even the 15% tax on Super so why is Labor moving to tax notional gains and and can you be upfront and say that might mean wealthier people need to sell, for example, an investment property as part of their superannuation portfolio?
JENNY MCALLISTER: Look, I'm not really accepting Jane's endorsement about my role. I'm very confident about the role of all of our finance and economic portfolios by its people and actually very heavily occupied in the role I'm in at the moment. However, on the specific question that you asked about the taxation of unrealised capital gains, at the moment self managed super funds, the trustees need to report and make a valuation of their assets to the tax office. That's not changing. It will be the tax office as they do now that's responsible for making that decision.
TOM CONNELL: But not pay a tax on it each year.?
JENNY MCALLISTER: So the earning, the value of the asset and the earnings associated with it, that'll be worked through with the tax office.
TOM CONNELL: But the paper that has been released says that what will happen is, whatever increase that asset has, so if an investment property goes from $500,000 to $600,000 in value, that's $100,000 that that account has earned, that's considered earnings. And you pay tax on that. Are you comfortable saying that?
JENNY MCALLISTER: That is a point of detail that you will need to take up with the Treasurer. I'm here in Tokyo working with colleagues around energy transition questions, but the point is that it's a very small group of people who have assets at $3 million. It's half a percent of the Australian population and honestly, these are not average Australian balances. Now well done on people who've managed to accumulate $3 million dollars, that's terrific. But we do need to tailor our tax support for those parts of the community that need it most. This is a really modest change, but it does make some important impacts on the budget going forward and it's a step that we think is reasonable and we're happy to put it before the Australian people.
TOM CONNELL: Jenny we know you've got a very tight schedule over there in Tokyo, we'll let you get away. I'm sure it's work and it's not nigiri and sake. But maybe you'll fit in a time for a little bit of that because when in Tokyo, you're shaking your head, it's okay. I know. But we'll let you go. Don't worry. We'll let you go. I'll just ask you one more question, Jane. Because I know you've got a busy schedule too. But you got caught in traffic so you get a bonus one, we'll call it at that. When you spoke before about amendments in the Senate, is there a level at which you think increasing tax from 15 to 30% is fair, I mean, you mentioned $100 million accounts. Would that be fair? Or 20 million or 10 million? Is it about finding a level and making that fair, or is it just indexing at 3 million would that be 3 million now?
JANE HUME: You’re talking about deliberations that haven't even gone to my shadow cabinet yet. In fact, I questioned whether this policy even went to a Labor cabinet and if it did, it was done at haste because clearly they hadn't worked through these details and you picked up on some of those issues. You know, they can't even work out how the tax is going to be applied to this new measure. Is it going to be applied by the superannuation funds? Is it going to be applied by the ATO, the ATO doesn't have eyes in as to what the capital gain might be. The superannuation funds don't have eyes into how many super funds you might have. So this is a disaster from go to woe, it has been so poorly thought out. We'll wait to see what that legislation actually looks like rather than a hastily put together discussion paper, which is all we've got to work on right now, which quite frankly, accountants, financial advisors, retirees, and self defined benefit holders. So many people have gone what on earth does this mean for me and the rest of Australia has said, well, what does this mean for me if they can break this promise? What's next? Is it negative gearing? Is it capital gains on houses is like Jim Chalmers said, where to next is the real issue.
TOM CONNELL: But very broadly, are you saying that there is at least debate here around whether there's some more changes that could be made that would be fair, that would, would that would be fair enough too, but you just want to land on what they might be?
JANE HUME: So fair for what Tom? They can't even decide whether these changes are being made
TOM CONNELL: Let me put it this way, are there excesses there around $100 million in an account?
JANE HUME: You're asking me what's fair? Is it fair to tax people more to pay for the spending addiction of a Labor Government, they're saying this is for budget repair. This is not to make the super system more sustainable. It's for budget repair. If you want to be fair about budget repair, well you just rein in your spending surely.
TOM CONNELL: Didn't the Coalition go to the budget bottom line as well?
JANE HUME: That was to make superannuation more sustainable. You're right, Tom, but that was to make the superannuation system more sustainable and we were successful. That's what the retirement income review said. And that was why we've been able to encourage people to plow more money into superannuation, for self employed people, for people that are downsizing, for women that want to make catch up contributions. That's why that was done. And it worked. Now those people are being reneged on, you know, the Labor government have now said, thanks very much for putting all that voluntary money into superannuation we're going to tax you more for it. That's a broken promise.
TOM CONNELL: Jane Hume, we'll leave it there. Thank you.
JANE HUME: Thanks, Tom.