Mary Aldred (Monash, Liberal Party) Share this | Hansard source

Too often, I see regional Australians bearing the brunt of unintended consequences at the hands of this federal Labor government. That the government has backed down on its proposal to tax unrealised gains in superannuation tells us one thing very clearly, and that is: it wasn't a very good policy to start with. It's only because of sustained pressure from the coalition, from the superannuation sector, from small-business owners, from farmers and from everyday Australians that the government has been forced to retreat on some of the most outrageous and egregious elements of this proposal.

It was not a minor policy tweak. This has been a fundamental shift in proposing how Australians are to be taxed, and had it not been challenged it would have set a very dangerous precedent across our entire taxation system. The coalition has always stood on principle when it comes to taxation—that Australians pay tax when income is realised, when a gain is crystalised, when the money is actually in hand.

But what this government has proposed is something entirely different. They are proposing taxing paper gains, gains that exist only on paper and may disappear the next day. Anyone who is invested in markets, property or business assets understands volatility. Values rise and values fall. They change with economic conditions, circumstances, interest rates and market cycles. Taxing unrealised gains ignores that reality.

This is an area I have had very strong feedback on from my regional electorate of Monash. I came to this place to make a strong stand on behalf of farming families in my community, who do so much to contribute to our national wealth and prosperity and ask for very little in return. Under this proposal, they would have been punished severely. Many older farmers in electorate have their farms in self-managed super funds, and they have done that with the intention of leaving their farms eventually to their children. That helps generate retirement income for the parents while the next generation looks to build and continue to build the family business—but not under Labor's proposal. We know that land prices have increased quite dramatically in some areas, and that does not always reflect the earning capacity of those businesses. I looked up how many farming families this might affect, particularly those with self-managed super funds. There are around 17,000 accounts that hold farmland, and, of those, 3,500 have more than $3 million in assets. That would severely cripple and hurt and disadvantage fair dinkum, hard-working farming families in my electorate of Monash, and that is why I cannot support this bill. It represents a fundamental break with the longstanding principles of Australia's tax system, and that is why Australians from city to country have reacted so strongly and so vehemently.

Equally concerning is the government's refusal to index the $3 million threshold that I've just spoken of in relation to its impact on regional communities including mine. In an inflationary environment, one that's only been made worse by this Treasurer's unwillingness to address debt fuelled spending and the impact that has on the inflation fire, failing to index those threshold amounts would amount to a silent tax increase. Over time more and more Australians would have been captured by this measure but not because they were wealthier in real terms. Many farming families are what you'd call asset rich but cash poor, and they work really, really hard. I believe that, because inflation would quietly erode the value of the threshold, this is bracket creep by design, and if it was not flawed policy then it would be a sneaky way, by sure, to take more of Australians' hard earned retirement savings. That is not the government's money. That is the money of everyday Australians, who work hard, who save hard and who do the right thing just to get ahead, and they cannot get ahead under this current government.

What we've seen over the last few weeks is a government that's been found out, a government that's retreating under pressure and a government that was clearly not prepared for the scrutiny this proposal would receive. The backdown demonstrates something very important—this was never settled policy grounded in sound economic principles. It was a blatant revenue grab, and once it was exposed it collapsed under scrutiny.

But beyond the policy flaws themselves lies another serious issue, and that is trust. It is the trust the Australian people put in their government to do the right thing, to make sound decisions and to go to elections where they put forward a set of values and policies and say: 'This is our word. If we are elected, these are the things that we will do.' The quiet part is being honest with the Australian people and not, by stealth, trying to creep in new taxes. In this case, Australians were not told of this intention to tax unrealised gains in superannuation. This government was not honest with its intentions, and that is a breach of trust. It is a breach of the compact between the Australian people and the parties of government that seek to represent them—in this case, the Labor Party that went to the last election not being upfront about its future policy intentions.

People were not warned that indexation protections would be removed. Now, promises matter in a democracy. Major structural tax reform should have been clearly put to the Australian people for their review, consideration and ultimate decision-making. Instead, this proposal has appeared suddenly, with limited consultation and a rushed legislative timetable. Australians instinctively understand when something has been slipped in without their consent, in this case at five minutes to midnight. And when it comes to retirement savings, those nest eggs have been built over decades of hard work—hard work by people in my community who spend long hours on their feet and working with their hands to make an honest day's living. The bar for legitimacy must be higher. Superannuation is not a plaything for governments looking for new revenue streams. It represents the lifetime savings of Australians who have worked hard, sacrificed and planned responsibly for their own retirement.

Unfortunately, this episode reinforces a broader pattern we are seeing from this government. Australians were promised that inflation had been beaten. They were promised that interest rates would stabilise. They were promised that life would become easier and fairer and better for Australian families. Yet, the reality for Australians today is a very different story. Families have less flexibility. They have less choice. They are finding it harder than ever to pay the mortgage, pay the energy bills and keep up with everyday costs. I had a woman approach me the other week saying she regularly has to make a decision about whether to buy groceries to put food on the table or to pay her electricity bills on time. That is not a safe, secure, sustainable and prosperous Australia.

Australians deserve better. They have been beaten down by this Treasurer, with his empty promises and silent tax grabs. And when governments lose control of spending, they inevitably start looking for new taxes—and this is exactly what we are seeing here. And it's not just the coalition saying so. Even voices traditionally aligned with Labor have warned about the dangers of this proposal. When you've got Sally McManus, Bill Kelty and Paul Keating all raising concerns about the same policy, you know something has gone pretty badly wrong. The ACTU's Sally McManus warned that the threshold must be indexed, otherwise Australians would eventually be caught. Former ACTU secretary Bill Kelty went further, saying taxing unrealised capital gains is bad policy because it distorts the tax system and disrupt income flows. And the architect of Australia's superannuation system, Paul Keating, has warned that workers would find themselves ultimately caught in this net.

Industry analysis has also made clear that the government's claim this would only affect a small number of Australians just simply doesn't add up. In fact, analysis suggests that up to 1.8 million Australians could eventually be impacted—1.8 million Australians who work hard, save hard and do the right thing to get ahead and live self-sufficiently. And many of those Australians would be small-business owners. Small-business owners in my electorate of Monash have never had to work harder for less and face more risk and red tape. This is just another example on top of the pile, because in Australia small-business owners often hold their assets through superannuation structures as part of their retirement planning.

So despite the government's rhetoric, this proposal was never going to affect only a handful of people. It would have expanded over time, because that is exactly what happens when thresholds are frozen and inflation continues to rise as we have seen under this federal Labor government, where inflation is sitting well outside the RBA's recommended band. But let's take a step back and look at the broader issue confronting our country. Australia does not have a revenue problem; Australia has a spending problem. Structural spending growth is now outpacing sustainable economic growth. We are living outside our means. When governments spend beyond their means, they inevitably begin looking for new taxes to fill the gap. Rather than confronting waste, prioritising programs and restoring the fiscal discipline, which is always a hallmark of every coalition government, Labor has chosen to hunt for new pools of capital to tax. Trust is fundamental when it comes to tax reform. Australians will accept reform when it is principled, predictable and properly consulted on. They will not accept retrospective changes, sudden policy shifts and ideological experiments dressed up as modest adjustments.

There are other risks in this legislation that should concern every member of the House, and I'll go into those shortly. But the name of this bill includes 'building a stronger and fairer super system'. There are many aspects that are not stronger, and they're certainly not fairer. They're having an everyday impact on communities like mine and on constituents like the ones I represent.

I want to briefly tell the story of Jan—I'll say Jan is her name—in my community who approached me last year. Her husband had a terminal illness. He had an account with AustralianSuper. He was eligible for early an payout of those death benefits because he had an imminent, terminal illness. AustralianSuper mucked him around for six weeks. Before he passed, Jan's husband wanted to have a conversation with their children to say: 'Look, this is not going to fix everything, but here is a little bit of money to help you get ahead in life. While I'm here, I want to be able to tell you that in person.' They shifted him from call centre operator to call centre operator, mucked him around and basically made his last few weeks an absolute heartache. After Jan's husband died, she spent nearly nine months trying to get money which was due to her. It was her money. They mucked her around, so I inquired with ASIC whether there is a mandatory minimum payout time on death benefits. And the answer is that, no, there is not. The answer is that it should be paid out as soon as practicable. This is not good enough, because this was Jan's money. It was not AustralianSuper's money.

I think this is a fundamental unfairness—this is a personal view I have—that we have aspects of the superannuation system that do not act fairly and that do not make a stronger system. I will continue to raise my constituent's case on this issue in any context relating to improving Australia's superannuation system, because I feel like this is a gross miscarriage of natural justice and of fairness. This was my constituent's money, and to have a large corporation like AustralianSuper continue to muck her around and, it turns out, thousands of others who are in the same boat, is grossly unfair. I call on the government to consider reforming that aspect so that people are not disadvantaged for months and months in seeking to access what is rightfully theirs.

This is a bad bill. On behalf of the farmers and small-business owners in my electorate, I cannot, in good faith, support it.

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