Maria Kovacic (NSW, Liberal Party, Shadow Assistant Minister for Women) Share this | Hansard source

The coalition stands for lower taxes, lower inflation and lower interest rates. It was coalition and community pressure that forced this Albanese Labor government to abandon taxation of unrealised gains and their indexation freeze. When this was first brought out, we immediately came out and opposed it on the basis of the taxation of unrealised capital gains and on the basis of the fact that it wasn't indexed. Now, as the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 comes before the parliament, we find that there are no unrealised capital gains and it is in fact indexed.

This is a government that has been found out and is retreating under the pressure of not being able to properly form legislation. We spoke about this in the chamber when it first came before it—about the fact that it was put together in a shoddy manner, that it didn't consider unintended consequences, that it didn't think about who it would impact. I note that Senator David Pocock was speaking about the intergenerational challenges that we have. The reality is that this legislation, in its previous form, was most likely going to adversely impact young people—young Australians. Those that are starting out today are the ones that were most likely to have reached that $3 million threshold and those most likely to never own their own home. So they would have been hit twice by the actions of this government.

But thanks to the sustained scrutiny from the coalition, from the superannuation sector and from small-business owners and everyday Australians we forced Labor to step back from the most outrageous elements of this proposal. Those elements were around taxing money that you hadn't earnt yet, money that hadn't been realised yet—taxing hypothetical gains, not real gains. That's what this government is about—spending, spending, spending and then taxing, taxing, taxing in order to make up for their spending, spending, spending. This was not just a proposal that was aimed at hurting retirees. As I've just stated, this was something that would hurt future generations, stealing from the future of younger generations and taking away from them now without having indexed into the future.

We exposed a clear breakdown in the working relationship between the Prime Minister and his treasurer. The original design to tax unrealised gains represented a fundamental break with longstanding principles of the Australian tax system. This wasn't just a change to tax on superannuation; this was a change to the way the Australian taxation system works. Australians have always understood that tax is paid when income is realised—when you get the money, when a gain is crystallised, when the cash is actually in your hand. But this government had proposed to tax those paper gains, the hypothetical gains that I mentioned earlier, particularly in volatile asset classes. That's not a minor tweak; that is a deliberate, strategic, structural shift that this government was trying to introduce. That would have set a dangerous precedent across the entire tax base, and that's why we fought against it so hard. We had the support of the superannuation sector in the way that we did because this was fundamentally wrong.

Equally concerning was the government's refusal to index the $3 million threshold. In the same way that we have impacts today with bracket creep, the initial intent of not indexing meant that young Australians of today would more easily reach that $3 million threshold once they got closer to their own retirement age. Most likely they would have been grappling with how to manage their housing into retirement, because they probably wouldn't have had a home of their own at that point either.

We are in a very sticky inflationary environment, and we have seen that inflation go up in recent times. That has been made worse by this Treasurer and his willingness to pour debt petrol onto the inflation fire, and failure to index thresholds was a silent tax hike. We have heard people from the other side and in the other place talk about the fact that it's not government spending and that those on this side are making up the fact that government spending is increasing inflation. We've had independent economists and the Governor of the Reserve Bank all say that government spending is a contributory factor to that inflation—and yet they don't want to admit it, they don't want to acknowledge it and they don't want to rein in that spending.

I think it goes to the transparency that Senator Pocock spoke about. I didn't agree with everything he said, but there were a few things that I thought were really important. He talked about transparency, scrutiny and the inquiry process. But they aren't the only issues that this government has in this chamber, in particular. I point to the guillotining of this bill, where the debate will end this evening. We need to think about the fact that we spent, I think, between seven and 10 hours last week in this chamber crossing the floor, backwards and forwards, on nuisance amendments from this government on orders for production of documents. We didn't spend it debating bills such as this one. We didn't spend it debating other legislation. We wasted the time and the resources of Australian taxpayers at the behest of this government because it wanted to play games in this chamber instead of us doing our work.

So, today, the debate on this will be guillotined. We won't get to talk about it as we should. We won't get to scrutinise it. We won't get to challenge it. Not everybody will have their opportunity to have a say. That's because we wasted time last week doing things that brought no benefit to the Australian public instead of doing our work on matters like this one.

When I think about the government's backdown on this policy, I think it demonstrates one thing very, very clearly and that's that this was never really a properly settled policy and principle, because if it were properly considered and settled it would never have come here in the form that it did. It was a blatant revenue grab that was exposed, and it collapsed entirely under the scrutiny of this chamber. What does that tell us? That this government is pretty much willing to do anything that it can to earn more or to get more tax revenue to cover up their spending black hole.

At the last election, Australians were not presented with a tax policy that would tax unrealised gains in superannuation. The Prime Minister didn't come out and say that that was the plan. The Treasurer, Jim Chalmers, didn't come out and say that that was the plan. There was not a single MP or senator from the other side that stood up and said, 'We have a plan to tax unrealised capital gains.' They didn't have the guts to do that. They didn't want to be upfront with Australians. But, once they got in, they decided that that was the plan. Australians were never told that this government planned to change longstanding superannuation settings or that they would remove indexation. Why does that matter? Because promises matter in democracy. Transparency matters in democracy. Scrutiny matters in democracy. There is a point in time when we have to say: 'Enough is enough of these games. Tell us what you're going to do, and do what you say you're going to do.' That is what Australians expect from us. They do not expect the games that they have seen in this chamber over the past week.

Major structural tax changes should be put clearly and transparently to the Australian people so they can make a decision on that when they vote; they shouldn't be surprised by them in the middle of a parliamentary term. But this proposal, like much of the government's work, appeared out of nowhere with limited consultation and a rushed and flawed legislative timetable. I think they probably have to be the key hallmarks of legislation from this government—no transparency, limited consultation and poor legislative work. I think that pretty much sums up most of what we've seen. I think this debate, around unrealised capital gains and indexation, resonated so strongly with Australians because they aren't stupid. They realise when someone's trying to pull the wool over their eyes and trying to slip something through without it being noticed.

When it came to retirement savings—which those on the other side usually, very loudly, jump to protect, in case there are any questions around choice or the use of those savings for other things—the government became silent about taxing those unrealised gains and how that could affect people, particularly when there was no indexation. They were silent on how it would impact those generations of young people who are just entering the workforce now. What it highlights is that we have a government that really cannot be trusted. We were promised by this government and by this treasurer that they had beaten inflation and that they had beaten high interest rates. We all know that that's not true; we all know that that's not the case. Every time interest rates go up, or inflation goes up, it's not the Treasurer's fault or the government's fault; it's somebody else's fault.

The reality is that we are very vulnerable at the moment with what is occurring in the Middle East because we have much higher inflation than most of our contemporaries. The increase in fuel prices—if the conflict continues and we do end up seeing settled-in shortages of fuel—will actually impact us more than others. Then those on the other side will say, 'It's not our fault that there was a war in the Middle East.' That is true, but it is your fault that inflation remains where it is today. It is your fault that it hasn't come down as it has for our contemporaries globally. It is your fault that you have spent too much, and it is your fault that you have chosen to tax Australians more in order to compensate for that spending.

Before the last election we were told by this government that they were going to make life easier for families. Yet now Australian families are finding it harder to pay for the things that they need to pay for. They are finding it harder to buy the things that they need to buy for their children and to do the things that they need to do to maintain their standard of living. They have less flexibility, and they have less choice. It has been harder for hardworking Australians to pay their rent, to pay the mortgage and to pay their energy bills—which, as we all know, didn't go down by $275 but have gone up by so much more; that number is now comical.

The fact remains that the matters of inflation and high interest rates have beaten this treasurer and this government. They don't know what to do. They don't know how to handle it or to address it because they don't know how to curtail their own spending. They are unable to manage our economy, so they are looking for everyday Australians and for Australian small businesses—particularly those small businesses that hold their assets in super—to actually pay more. What they have proposed here reinforces that broader pattern of higher spending first and then new taxes that Australians will pay for. That's not reform; that's fiscal mismanagement. As I said at the outset, we believe in lower taxes, lower inflation and lower interest rates, and we are totally focused on restoring the standard of living for Australians.