Hubris has been the downfall of many a government fresh from a landslide election win, and so has legislative overreach. In 2004, the John Howard coalition won a sweeping victory, including a rare win in both houses of parliament. Buoyed by its claimed mandate, the government introduced the contentious WorkChoices legislation, inviting a vicious backlash.
At the next election, Kevin Rudd’s Labor wiped the floor with another landslide. Rudd’s popularity was stratospheric, easily eclipsing even Jacinda Ardern’s at her height (today, Rudd is equally hated as much as Ardern: there’s a lesson there, somewhere). Then Rudd introduced his mining super tax: the backlash was even more vicious than against WorkChoices. Rudd was deposed by his own party, which barely clung to government in a hung parliament at the next election.
Anthony Albanese might want to keep this in mind as his triumphant Labor party rushes straight into introducing a new, wildly unpopular tax. Labor is taxing unrealised capital gains on superannuation accounts. That is, people’s retirement savings will be taxed on money they haven’t even earned yet. Sure, the tax currently only applies to super balances over $3m, but the Greens are already seeking amendments to lower the threshold.
Worse for the government, they’ve been forced to admit that politicians will be wholly exempt from the tax.
The government’s hubris already seems to be biting it in the arse. Not least in the public displays of unity between the PM and his own Treasurer.
Jim Chalmers has declared he will not negotiate with the coalition on superannuation tax reforms just a day after Anthony Albanese left the door open to a compromise, with the Treasurer preferring to do a deal with the Greens that retains the contentious tax on unrealised capital gains.
Dr Chalmers lashed out at opponents of the government’s proposed tax hike on superannuation balances above $3m, accusing critics of pretending to dislike the model of taxing unrealised capital gains while actually being against clamping down on tax concessions for the wealthy.
In fact, the opposite is true.
The unrealised gains tax component of Labor’s proposal has received stiff opposition from some of the highest-ranking business and economic voices, who are in favour of a clampdown of superannuation tax concessions.
From the CEOs of some of Australia’s biggest companies, to former Treasury secretaries and Reserve Bank governers, a raft of critics have agreed that taxation on superannuation accounts needs to be reformed, while remaining adamant that taxing unrealised capital gains is an abomination.
Even the most avid opponent of unrealised capital gains, Geoff Wilson, concedes that higher taxes on earnings and capital gains would be fine as long as there was not an unrealised capital gains tax introduced.
In an embarrassing tit-for-tat, the day after the Treasurer contradicted the PM, the PM again slapped down the Treasurer.
Anthony Albanese has again left the door open to the coalition putting forward proposed changes to Labor’s tax on superannuation balances higher than $3m, saying that he would allow the Greens and the Liberal Party to make suggestions.
“Disunity is death,” as John Howard once said. Both Howard and his predecessor Bob Hawke knew only too well the cost of getting into public shit-fights with an ambitious Treasurer.
Nationals deputy leader Kevin Hogan has seized on Jim Chalmers’ admission that he is negotiating with the Greens to pass a new tax on super balances higher than $3m, attacking the government for acting in an “alliance” with the minor party […]
“This is going to be a really high spending Labor-Greens alliance over the next three years, a very arrogant one.
“And when they’re going to be spending more of your money, they’re spending more of your money, they’re going to start coming in, getting more of it. And I think this is their stage one…. they want more of your money.”
Name a Labor or Greens politician who ever didn’t.
