Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

I rise tonight to speak on an issue that, perhaps, has gone off the radar a little over the last few months. We've had the debate over the Voice, and we've had the debate in Western Australia, particularly, over the cultural heritage legislation. But, in regional areas, one topic that's being raised with me again and again is Labor's new superannuation tax. Perhaps it's not front of mind for many people, but it is front of mind for many small-business people and farmers out there who happen to have self-managed superannuation funds, because what this tax does, for the first time in Australia's economic history, is impose a tax on unrealised capital gains. I'll say that again: it imposes a tax on unrealised capital gains.

If you have a property or artwork or some gold in your super fund that appreciates in value above the threshold, you have to pay tax on that, whether or not you have the cash available. That means that farmers who have put part of their farming property quite rightly and legally into a self-managed super fund will have to find the cash to pay Labor's new tax if that farming property appreciates in value. They won't necessarily have that cash liquid, so what then will they have to do? In order to come up with the cash to pay the tax office, to pay this Labor government, they're potentially going to have to sell property. They will have to sell part of their farm to pay a tax bill. That is an outrageous impost.

One of the key principles of all taxation policy should be that it should not impose a burden on people who have already made decisions about their future under completely legal, legitimate arrangements. This new Labor superannuation tax explodes that principle. It forces small-business people, particularly farmers, who are in this position to potentially have to sell assets in order to pay a tax bill on an unrealised capital gain. Nobody has made any money yet. It's a book entry. It's a piece of land that's gone up in value from $1 million to $2 million. As my colleague in the chamber Senator McDonald would know very well, agricultural land can change in value a lot, and it's not necessarily a value change that is linked to the amount of money that is generated from that property. Sometimes those two things are quite divergent.

Another example of something you could have as a small-business person in a self-managed superannuation fund is gold. We all know that gold is countercyclical. Gold can appreciate in value very quickly, particularly in difficult economic times. So if you were in that situation, where you had some hard assets like gold in a self-managed superannuation fund, and you suddenly saw a spike in values, you could have a significant, unrealised capital gain that you will then have to sell an asset to pay the tax on.

This should never have been brought forward as a realistic idea. It is completely contrary to every principle of good tax planning that Australia has followed for the last 100 to 120 years. You do not tax a profit on paper. You tax a profit when it is realised—when that property is sold or when that gold is sold. You do not tax people for an increase in the value of an asset, particularly when that asset is being put aside for their future retirement. This is a policy that should never see the light of day.