RAF EPSTEIN: Joining us in the studio is Jane Hume. She is the Liberal Senator for Victoria and when in government she had significant responsibility for precisely these sorts of issues. Thanks for coming in.
JANE HUME: Good to be with you Raf.
RAF EPSTEIN: If John Howard can change his mind and go to an election with a new tax to GST, why can't this Prime Minister?
JANE HUME: Because when John Howard went to an election with a new tax, he said he sought a mandate to implement that tax after the election. This has been quite the opposite, the Labor government Anthony Albanese and Jim Chalmers, want to legislate this change and then seek the mandate. Now that's just tricky. That's just a broken promise. That's exactly what this is Raf, it is very much a broken promise.
RAF EPSTEIN: Why is it tricky? If the change doesn't come in until after the election which is exactly the same as the GST? Why is it tricky?
JANE HUME: Because you know as well as I do that passing legislation is a very difficult thing to do. This will get waved through with the help of the Greens. After the election, even if the Coalition were to be reelected, to repeal it they would have to get that through the Senate-
RAF EPSTEIN: You're saying if you have to unwind it in the Senate, ok.
JANE HUME: There is no way that that will happen easily. So we know that this is not seeking a mandate. This is simply going back on a promise that Jim Chalmers and Anthony Albanese made before the election and they made it very, very clearly. They said there were going to be no changes to superannuation, and they said that there were going to be no new taxes and Jim Chalmers made that pledge. He said that we have no proposals for tax increases. This is clearly a tax increase. In fact, it's doubling the tax for around 80,000 Australians on their superannuation balances.
RAF EPSTEIN: Scott Morrison did exactly the same thing when he was Treasurer.
JANE HUME: Nope.
RAF EPSTEIN: He went to the 2016 election. His press release says, talks all about why we had to change the superannuation system, when he's Treasurer. After the 2016 election, what's the difference? And
JANE HUME: And again, we took that change to the 2016 election and legislated after the 2016 election.
RAF EPSTEIN: You didn’t tell people in 2016 that you were going to cap it at 1.6 billion?
JANE HUME: Yes absolutely, it was capped. The suggestion was that would be capped at 1.6 billion and that has made dare I say, that change has made the superannuation system sustainable. That's what the Retirement Income Review said the superannuation system is now sustainable.
RAF EPSTEIN: Yeah it did.
JANE HUME: When Anthony Albanese and Jim Chalmers talk about sustainability. They're not talking about the Super system. They're talking about the budget.
RAF EPSTEIN: George Christensen and Tony Abbott all those sort of people that are furious with Scott Morrison. They said he was doing things in 2016 as Treasurer that he did not talk about before the election.
JANE HUME: And in fact those changes that made the superannuation system more sustainable, allowed people to contribute more, in fact encouraged people to contribute more. So for instance, we then had the money to be able to do things like put money in a few downsize your house-
RAF EPSTEIN: Sure but people were taxed more.
JANE HUME: or put money in if you were a woman that had missed out on superannuation in years gone by, and allowed to make catch up contributions or allowed self self employed people to put more money into super-
RAF EPSTEIN: You haven’t mentioned that you taxed people more.
JANE HUME: That superannuation system more sustainable. We took money at the top end and put it in different places so that people could put more money into a tax effective system. This is very different. This is bringing on people that have relied on those changes and put more money in because we told them that they should and now they're being told that they're going to be taxed double the amount that they were going to be taxed. That is a broken promise, clear and simple.
RAF EPSTEIN: 1300222774 is the phone number. Jane Hume is with us. Liberal Senator, of course one of the Liberal Senators for the State of Victoria. I might in a moment play Jane Hume a little bit of one of her. One of her colleagues said to Ally Moor this morning. But Jane Hume, what would you do? You struggled to rein in the debt for a range of different reasons. I don’t want to re-prosecute the last nine years. What would you do? They're saying they're gonna get an extra 2 billion out of this. What would you do to get a little bit of extra revenue?
JANE HUME: Well, this is to mend the budget for budget repair. The best way to mend the budget is to deal with the spending side rather than the revenue side. Spend within the envelope that you have. Now yes, you're right, the last two years were exceptional because of COVID we had to make sure we had to do things that a Coalition Government-
RAF EPSTEIN: I just don't want to re-prosecute-
JANE HUME: We won't re-prosecutre. We had to do things we would never have done.
RAF EPSTEIN: So you're not going to go without any tax changes, none? Nothing?
JANE HUME: But the Labor government went to the election with $8 billion more spending than the Coalition. They spent more than $23 billion than they said, that the Coalition would have at the last budget. Who knows what we're going to face, what we're going to face in May. Now they're using this tax expenditure insights statement as essentially a wish list that looks very similar to the to the agenda that Bill Shorten took to the to the 2019, that was rejected.
RAF EPSTEIN: If we get time, what you're referring to there, there's an analysis from Treasury about, I guess about tax foregone if we get time. But there was an interesting exchange Ally Moore had Russell Broadbent on this morning, Liberal MP State of Victoria. A Victorian Liberal as well. And he essentially agreed with Ally because she was saying ‘Well hang on should someone with very little in this super get the same tax treatment as someone with a lot in their super’. He said that was a bad idea to treat them the same way. Here's the exchange between Ally Moore and Russell Broadbent.
ALLY MOORE: Do you think that the system that provides the same tax concessions for someone with $150,000 and super to as someone with 3 million, do you think that's fair and equitable?
RUSSELL BROADBENT: No I don’t.
ALLY MOORE: So what sort of change do you think we need?
RUSSELL BROADBENT: Well, I think we should look at the government's proposals and be reasonable about it.
ALLY MOORE: Have you had that conversation with Peter Dutton?
RUSSELL BROADBENT: No, no.
ALLY MOORE: Do you think he agrees with you?
RUSSELL BROADBENT: No I don't think he does.
RAF EPSTEIN: So if I can put the same question to you. Russell Broadbent doesn't think it's fair, that the person with very little in their super gets treated the same as someone with three or 4 million in their super, do you think it's fair?
JANE HUME: There are already systems within the superannuation system, as indeed there are in the personal income tax system that make the system progressive. But more importantly, superannuation has been set up to be a tax effective vehicle to encourage people to put more in exchange for locking it up for potentially forty years.
RAF EPSTEIN: And I hope you've made the point that the government you say the government's broken a promise, but I am trying to get from you a statement of principle. Do you think it is fair? I realise there's lots of other things going on in the tax system. But essentially, right now, people with millions in their super balance get treated in a very similar way to people with 10 or 20 grand in their super balance. Do you think that's fair?
JANE HUME: The superannuation system which was set up, let's face it by a Labor government, was set up 30 years ago with this calibration already there. To encourage people to put superannuation to put their money away, lock it up for 40 years or more. And they have a Tax Concession in exchange for that. Now, this is a breach of trust, a breach of faith, a promise broken by the Labor government because people have put more money into superannuation on the understanding that that was what was expected.
RAF EPSTEIN: Do you win Aston defending people with 3 million in their super balance? A genuine question. Is it gonna make, is that gonna help your cause to be defending people in the top 1% when it comes to super?
JANE HUME: This is 80,000 Australians that might have done things like sold a family business and put that money into superannuation or they-
RAF EPSTEIN: I’m not making a value judgment on them. I'm asking you if people will make a value judgment about you?
JANE HUME: But they're feeling but there are people that have trusted this system Raf. They might have sold a big family home and moved to a smaller home and they put that money into superannuation on the understanding that this was the deal. And then probably plenty of those people out in Aston as well. And now this government has broken their faith. Broken trust with those people who have relied on our systems. And the real question is, of course, what's next? What is the next promise that's going to be broken? Is it going to be negative gearing?-
RAF EPSTEIN: Well they’ve said no.
JANE HUME: Is it going to be capital gains taxes?
RAF EPSTEIN: Well they’ve said no.
JANE HUME: Well, they've said no to superannuation too Raf and they've gone back on that one. So what is next? And I think we know that there is an agenda and it's been laid out in this tax expenditure and insight statement, that all the things that have never been discussed before in that particular document, things like capital gains tax or investment property-
RAF EPSTEIN: They’re just putting numbers on it, are they not? What's wrong with putting a number on?
JANE HUME: Well they put a number on superannuation too.
RAF EPSTEIN: The Treasurer said this is not a statement of intent. He very deliberately said this is not a statement of intent. He said they're required to do it by the Charter of Budget Honesty.
JANE HUME: He wasn't required to put in all of those extra things in there, including the tax foregone on investment property.
RAF EPSTEIN: You're not against transparency are you?
JANE HUME: Absolutely not.
RAF EPSTEIN: So what’s wrong with it?
JANE HUME: But we also know that investment properties were a target by the Labor government in 2019. They've used this tax, this tax expenditure and insight statement as essentially a selling tool for this new increased tax on superannuation. Well, what else are they going to use it as a selling tool for? Will it be for negative gearing? Will it be for capital gains tax? Will it be for tax concessions on the family home because that's in there as well?
RAF EPSTEIN: Are you really accusing them of, that they're going to tax the family home?
JANE HUME: I’m accusing them of being tricky and sneaky, I certainly am. Because you don't make one commitment less than a year ago, and say that there's going to be no new taxes on superannuation. And then a year later say ‘Oh, we didn't actually mean that one, just these taxes’. You know, that is a broken promise, clear and simple. So what is going to be the next broken promise?