Angie Bell (Moncrieff, Liberal National Party, Shadow Minister for Youth) Share this | Hansard source

The member for Reid says that this is not radical policy reform, but how is moving the goalposts on Australians' superannuation accounts not radical policy? It undermines certainty in the whole system of superannuation across Australia. The Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2016 is a bill—make no bones about it—that goes to the heart of Australians' retirement savings, to the trust that they, or you, place in this parliament, in this 'all roads lead to tax' government that we now have running our country, and to the principles that have underpinned our tax system for generations. We know that the more you tax, the less you get. The government spin about earning more and keeping more of what you earn evaporates when inflation goes up, by the way—it's gone; it's all spin and no substance.

Let's be very clear, from the outset, that the coalition and community pressure forced Labor to abandon its most egregious elements: the taxation of unrealised gains—that's paying tax on money that you don't actually have; that's how dangerous this so-called non-radical reform is—and the freezing of indexation. The government has been found out, and it's now retreating under pressure. It was not of its own volition that it reconsidered these measures. It was because of sustained scrutiny from this side—from the coalition—from the superannuation sector, from small-business owners who hold up this country, from financial experts and from Australians who understood instinctively that something was deeply, deeply wrong. This was not simply a proposal aimed at hurting retirees; it was aimed at hurting young people, the future of our nation. It was quietly stealing from younger Australians without their knowledge or consent in the future. I give warning to all young Australians: this Labor government was going to tax you at that level. It sought to change the rules of the game for retirement savings in a way that would have echoed for decades.

In the course of this debate, we also expose what appeared to be a clear breakdown between the Prime Minister and his Treasurer—a lack of clarity, a lack of unity, a lack of principle in the design of this policy. The original proposal to tax unrealised gains represented a fundamental break with longstanding principles of the Australian taxation system. Australians have always understood a simple truth: tax is paid on income realised. That makes sense to Australians, doesn't it? You pay the tax when you've actually earned the money. In other words, you don't have to sell your house in order to pay a tax that the government is wanting to collect. You can see how retrograde that is. Australians have always understood that simple truth, to tax when a gain is crystallised, when cash is actually in hand. To propose taxing paper gains—not real gains, gains that are on paper, gains that exist only on a balance sheet and can evaporate overnight, particularly in volatile asset classes—was not a minor tweak. This is not a minor tweak. It was a structural shift that they were proposing. It would have set a dangerous precedent across the entire tax base. It's not modest reform.

Equally concerning was the government's refusal to index the $3 million threshold. In an inflationary environment that's about to get more inflationary, made worse by this Treasurer's willingness to pour debt petrol on the inflation fire, failing to index thresholds is a silent tax hike in itself. This government is addicted to spending, and it will tax in order to spend. That means the government will come after your money when it runs out of your money. Over time, more Australians would have been captured not because they were wealthier in real terms, not because they'd become tycoons, but because inflation eroded the value of the threshold. That is bracket creep by design. That is what 'bracket creep' means. That is flawed policy in itself, and if it wasn't flawed policy, then it was a sneaky trick to take more of Australians' 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 collapsed under scrutiny. At the last elections Australians were not presented with a policy on tax to unrealised gains on 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 consultation and a rushed legislative timetable.

Australians instinctively understand when something has been slipped in without their consent. You can't get much past Australians. They know when they can smell a rat, and when it comes to retirement savings, their nest eggs built over decades of hard work—decades and decades of hard work, sacrifice and deferred consumption—the bar for legitimacy must be higher. We were promised by Labor and by this Treasurer that inflation had been beaten—remember that? We're on the other side of inflation now! We were promised that high interest rates were under control—remember that? Then interest rates went up again. We were told that life would be easier for families around this country. We were promised a $275 reduction in our electricity bills. How did that work out for the government, with electricity prices up 40 per cent? Instead, families have had less flexibility, less choice and more and more and more pressure piled on them by this government's mismanagement of the economy. It's harder to pay the mortgage, it's harder to pay the bills, it's harder to pay the energy costs, it's harder to make ends meet.

The fact of the matter is inflation is high and interest rates are high and have been beaten by this Treasurer and this government. Inflation and interest rates have beaten the government; the government hasn't beaten them, which is what it's supposed to do for all Australians. When the government overspends and loses control of inflation, it starts looking for new revenue sources. So they're addicted to spending, perhaps there are fewer people working, so there is less tax coming in. So then they've got to find other ways of getting money in so that they can send it out into the economy and push inflation up.

It is not only the coalition that have raised concerns. Prominent voices from Labor's own ranks, from within their own ranks, warned against this approach. When Sally McManus, Bill Kelty and Paul Keating say this is a bad idea, that means it's probably a pretty bad idea. Sally McManus said it must be indexed and warned that without indexation people would eventually be captured. Three million dollars in super doesn't sound like much now. But think 10 or 20 years ahead to when young people will retire, and then it is a big problem, because that's probably how much you will need to retire at that time.

Bill Kelty called taxing unrealised capital gains bad policy and said it would distort income flows and undermine superannuation itself. Paul Keating, the architect of the system, warned that workers would be caught up. Industry suggests that up to 1.8 million people could eventually be impacted. Small businesses were rightly alarmed. So many Australians who own small businesses hold their assets in their superannuation. This proposal would have forced complex liquidity decisions and would have potentially compelled asset sales based on paper gains. What does that mean? It means you have to sell something to pay the bill. You have to sell an asset that you've worked for your whole life to pay a tax bill.

If it wasn't already clear, it is now. Labor has a spending problem, not a revenue problem. The structural issue confronting our country is spending growth that is outpacing sustainable economic growth. We need to grow the economy, not grow the spending from the government. The more they spend, the more inflation goes up. Does everyone understand that? It's a basic principle that everyone seems to understand, and pay for, except for this government. When governments spend beyond their means, they inevitably reach for new taxes to fill the hole, and that's precisely what we are witnessing. Rather than confront wasteful spending, rather than prioritise programs and rather than restore 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's principled, when it's predictable and when it's based on consultation. What they do not accept is retrospective tinkering, ad hoc changes and ideological experiments dressed up as modest adjustments. This proposal reinforces a broader pattern from the government: spend first and tax later. That is not reform; that is fiscal mismanagement at its worst, and beyond the headline changes lie new risks. The removal of the effective death tax exemption introduces uncertainty for families at precisely the moment they are most vulnerable. Surviving spouses that rely on super balances to maintain stability after the loss of a partner could face additional complexity and reduced security.

Total and permanent disability recipients must also be considered. These Australians, through no fault of their own, are no longer able to work, and their superannuation is not an abstract investment; it's a lifeline. Any change that increases volatility, reduces predictability or complicates access carries real human consequence. Tax policy cannot be designed in isolation from lived reality. When retirement income settings are destabilised, confidence in the entire system is eroded. The government points to increases in the low-income superannuation tax offset as evidence of balance. Any measure that supports low-income earners building retirement savings is of course welcome, but let us be honest about scale and timing.

The low-income superannuation tax offset adjustments do not lower grocery bills today. They do not ease mortgage repayments today. They do not reduce electricity costs today or tomorrow. Australians are facing immediate cost-of-living pressures now. A future offset adjustment in superannuation does little to relieve those stresses now. If the government is serious about helping households, it must tackle inflation now for everyone, for every single Australian. Inflation impacts your everyday spending because you get less in your shopping basket every time inflation ticks up. The government must tackle inflation at its source, not reshuffle offsets with the retirement income system.

This proposal should not be viewed in isolation. It's about enabling more spending. That's what it's about. It's about pouring more debt petrol on the inflation fire. When spending accelerates without structural reform, governments reach the limits of conventional revenue sources. They test new boundaries: thresholds left unindexed, new bases for taxation, new definitions of income. Today, it is superannuation balances above $3 million. Tomorrow? Who knows. It could be another threshold, another definition, another asset class. Is the family home next? Will Labor tax your family home when they run out of money to spend? That's a question that all Australians should be asking, because it's a slippery slope with this government. Once the principle of taxing unrealised gains is entertained, it does not remain neatly contained.

Australians deserve clarity with their investments and for their future, especially young Australians. As the shadow minister for youth, I stand up for young Australians and I say: 'Watch this government. They are coming after your money. And not just now, but into the future.' Or is it the opening chapter of a high-tax, high-spending approach to governing? What about revenue raising? It's like parking tickets and the local council, isn't it? 'Let's raise some revenue. How can we tax our constituency?' This debate, this proposal, this retreat under pressure is what life under a Labor government looks like into the future. Have a look into the crystal ball.

The coalition will always stand for a tax system grounded in principle, for retirement savings that are stable and predictable, for fiscal discipline that protects future generations rather than quietly taxing them. We forced this government to retreat once, and we will continue to hold them to account for the sake of retirees, for the sake of small businesses and especially for the sake of young Australians. Those opposite say they support our young Aussies, but the truth is that their future savings are at risk of being stolen by this big-spending, big-taxing Labor government.

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