Phillip Thompson (Herbert, Liberal National Party, Shadow Assistant Minister for Defence) Share this | Hansard source

When this Labor government runs out of money, it comes after yours. This is the same group of people who wanted to go after our farmers. They wanted to tax unrealised gains. This government wanted to tax out of existence those who put grain, food, fibre and meat on your plate. That is an absolute shame.

I've never in my seven years here seen a government who is so blatantly going after hard-working Australians, taxing them more to bump up their revenue stream because they've run out of money. They've gone after hard-working Australians and gone after our farmers. We then get the hubris from the Treasurer, time and time again, who says that Australians have never had it so good—they've never had it better, and he's doing everything that the Australian people want. That couldn't be further from the truth. People are working harder and keeping less of what they make. People are working double the time in the workplace and extra jobs to keep up with inflation and cost-of-living pressures.

Australians deserve clarity from this government, but it's not what they are getting. They need clarity and honesty on the direction that the country is travelling. Is this just an isolated adjustment, or is this the opening chapter in a high-tax, high-spending manifesto? We know the answer. This is exactly what life under Labor governments looks like. You pay more, you get less, and your future is never safe.

The Coalition and community pressure has forced Labor to abandon the taxation of those unrealised gains and the indexation freeze, but, make no mistake, given half a chance if the door was left open, then this Labor government would come after your hard earned money and come after your life savings, because that's what they do. This government have been found out and are retreating under pressure thanks to sustained scrutiny from the coalition, from the superannuation sector and, most importantly, from small businesses, the backbone of this nation, as well as from everyday Australians who saw a government trying to sneak through changes to try and prop up their budget. We forced Labor to step back from the most outrageous elements of this proposal. This was not a proposal that was aimed at hurting retirees; this was aimed at hurting future generations, stealing the future of young Australians, and stealing it away from them without their knowledge.

We exposed a clear breakdown in the relationship between the Prime Minister and the Treasurer. The original design to tax unrealised gains represented a fundamental break within the longstanding principles of the Australian tax system. Australians have always understood that tax is paid when income is realised—when cash is actually in hand. You cannot tax people on what you think they might make. A one-paddock grazier who hasn't had a good season would go bankrupt and lose the farm. They would lose what they have always lived on and grown up on. The flow-on effect to our economy would mean fewer farmers, less Australian produce and less of the choice that you have to buy Australian at the supermarket.

To propose taxing paper gains, particularly in volatile asset classes, was not just a minor tweak. This was a structural shift that would have set a dangerous precedent across the whole tax base. Equally concerning was the government's refusal to index the $3 million threshold. In an inflationary environment being made worse by this treasurer and his willingness to pour debt petrol on the inflation fire, failing to index thresholds was a silent tax hike. Over time, more Australians would have been captured, not because they were in some wealthy top one per cent, but because inflation eroded the value of the threshold. That is bracket creep by design and a flawed policy. If it wasn't a flawed policy, it was a sneaky trick to take more of your hard earned savings. The government's backdown demonstrates one thing clearly—this was never settled policy grounded in principle. It was a blatant revenue grab that was exposed and collapsed under scrutiny. Tax policy reform should not be done with haste; it should be done in consultation.

It's my belief that this Labor government can't be trusted. They say one thing in the community and do another thing here. At the last election, Australians were not presented with a policy to tax unrealised gains in superannuation. They were not told that longstanding superannuation settings would be fundamentally altered. They were not warned that indexation would be stripped away. Promises matter in a democracy. Major structural tax changes should be put clearly and transparently to the Australian people. Instead, this proposal appeared out of nowhere, with limited to no consultation and a rushed legislative timetable. That is why this debate has resonated so strongly. Australians instinctively understand when something has been slipped in without their consent. When it comes to retirement savings—the nest eggs built over decades of hard work—the bar for legitimacy must be higher.

We have a government that cannot be trusted. We were promised by Labor, by this treasurer, that they had beaten inflation and higher interest rates. We were told by this government that they were going to make life easier for families, yet families have had less flexibility and less choice. In life it's been harder for hardworking Australians to pay the mortgage, to pay the energy bill and to make ends meet. Right now around Australia people are making hard decisions, whether they're paying insurance, cancelling sporting events for their children, putting food on the table or making those tough sacrifices because of how hard it is to make ends meet in this country.

The fact of the matter is that inflation and high interest rates have beaten this treasurer and this government. When Sally McManus, Bill Kelty and Paul Keating say the family-savings tax is a bad idea, it's a bad idea. If your Labor front line, union officials and Paul Keating come out and say this is a bad idea, that Labor has lost its way and is not doing the right thing, then the Labor government should listen. Labor said it would only target the few, but even Labor's mates are out there calling out the fibs. The Secretary of the Australian Council of Trade Unions, Sally McManus, warned:

I do think it's got to be indexed because you've got to make sure eventually people don't end up there.

Former ACTU secretary Bill Kelty has said:

I think taxing unrealised capital gains is bad policy. It distorts the effective tax. Changes your income flows, and if it was on superannuation generally, there would be a revolution about it. It would destroy super.

The father of the superannuation system, Paul Keating—the person that Treasurer Chalmers looks up to the most—has said that workers would be caught up. Industry analysis has found the claim by the government that it would only hit a small number of Australians is a furphy; it was going to hit 1.8 million Australians.

Those are the Labor heavyweights saying that this is a bad policy, yet, if the Treasurer saw an opening, he would take it, because he knows that he, as the Treasurer, and the Prime Minister cannot manage a budget. They've run out of money. They've run out of ideas. Now they're coming after Australians' money.

The problem confronting our country is structural spending growth that is outpacing sustainable economic growth. Labor has a spending problem, not a revenue problem. When governments spend beyond their means, they reach for new taxes to fill a gap—to fill the hole. This is precisely what we are witnessing here. Rather than confronting waste, rather than prioritising programs and rather than restoring fiscal discipline, Labor has chosen to hunt for new pools of capital to tax. Trust is fundamental in tax reform. Australians accept reform when it is principled, predictable and based on consultation. They do not accept retrospective tinkering, ad hoc changes and ideological experiments dressed up as 'just modest adjustments'. This proposal reinforces a broader pattern: high spending first, then new taxes to pay for it later. That is not reform. That is fiscal mismanagement.

Tax policy cannot be designed in isolation when retirement income settings need confidence and the entire system is eroded. This Labor government is once again trying to leave the door ajar to come after hard-working Australian tax dollars. Make no mistake; they have run out of money. They have not prioritised the Australian people correctly. They are trying to cut programs, tax you, raise revenue wherever they can and blame everyone else. I'm sure something that's happening in the Middle East, or somewhere around the world, will be the cause of this treasurer trying to sneak in another sneaky tax.

The Australian people, the community—those who came out so hard, in their masses, and said, 'We do not support taxing unrealised gains'—and small businesses have got better things to do than fight a government on a tax they're trying to creep in. They are the engine room of the economy. They're the ones that keep the lights on here—the private sector, our small businesses—not the government. The coalition stood side by side with our small businesses, with our farmers, and said, 'We will not support it.' We had to take the fight up to the government.

I don't think that a lot of the policies the Treasurer has tried to rush through will help Australians. I think we'll see the pain. It's normally after politicians have left this place, when they're in retirement somewhere. That's when the pain will flow through the hardest. The Treasurer, the Labor Party and this Labor government need to listen, work and deliver for the Australian people rather than listen, work and deliver for their mates in the unions and the CFMEU—well, not the ACTU because they came out and they didn't support this policy. That's why there are a lot of coalition members coming in here today to speak against some of the most drastic and draconian tax policies that a government has tried to ram through this place—at least in my lifetime.

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