How Labor's $3m super tax will impact you
An unrealised capital gains tax is not just a tax. It is a defining moment for our country. And if it passes wealth will be something private citizens temporarily borrow from government, they will no longer own it. by tim wilson.
First published in the Australian Financial Review
Labor has a mandate for its tax on unrealised capital gains, so its passage is now intertwined with the survival of this government itself. Only when Labor MPs know it will lead to their demise will they stop it.
On Saturday last week, the Albanese Labor government was comfortably re-elected. Despite warnings of minority status, they sailed home, but the Greens tail will still wag the dog of this government in the Senate.
Now the passage of its tax on unrealised capital gains will be decided by the Greens who, like Labor, see it as rivers of revenue. The only difference is the Greens think the threshold should be lowered to $2 million.
This tax is a slippery slope. Not indexing the threshold is part of it. But the real slide is its administration.
Once the administration of this tax is set up, it will be ported to other assets and structures from property, businesses and trusts.
It’ll have negative impacts. But put simply, this government doesn’t care about the long-term impact their tax will have on capital formation. That’s a problem for private capital. And Labor isn’t the party of private capital.
Labor is the Party of organised capital. Every election they put up policies aimed at destroying SMSFs. They want that capital put into the industry funds they vicariously control. Doing so means they can fuse labour and capital, which means democratic success is no longer the sole pathway to power.
Just look at how industry super now cuckold listed company CEOs from speaking out about issues like industrial relations. They who capitalise the piper, owns the instrument and probably the copyright to the tune.
The term “woke” is thrown around a lot without definition, but it is time that placid industry associations and self-managed superannuants woke up. Negotiating with this government to stop this tax is pointless.
Industry associations think opinion pieces and news releases will cut it. But they’ll line the back pages of newspapers one day, and the floor of the treasurer’s bird cage the next.
That includes the Coalition. It is not your words that count. It is your deeds.
The failure to campaign against unrealised capital gains was not the greatest failure of the Coalition’s last election campaign; it was the greatest failure of their last three years.
The Coalition is not solely to blame. During the campaign I was asked by voters why the Coalition was not doing more on the tax. The answer is simple: the electorates that are disproportionately impacted by it sent teal and Labor MPs to Canberra.
So the fiercest opposition were timid teal talking points – just cynical electorate signalling.
Like with the retiree tax to scrap refundable franking credits, only an unrelenting campaign to expose its sinister consequences would do. This is the price of sending teals to Canberra: signalling, not sincerity; platitudes, not punches; reflection, not resistance.
We see this now in the member for Wentworth’s polite request to the treasurer to “rethink their approach”. Decisions on tax policy aren’t made around a boardroom where impolite requests are referred to a subcommittee and corrected through diversity training. Allegra: they’re laughing at you in the treasurer’s office.
After the election Labor is now emboldened. And their objective is to inflict tax violence on wealth and deliver revenue for their spending agenda while crowing they’re balancing the budget from the blood they can extract from your wallet.
An unrealised capital gains tax is not just a tax. It is a defining moment for our country. And if it passes wealth will be something private citizens temporarily borrow from government, they will no longer own it.
It is a family savings tax and Labor will legislate it because they have the mandate to do it.
It is the thin edge of the wedge. Only political pain will stop it.
Some of us want to stop it, but it requires the people who will be impacted to do something about it.
I am setting up a fund to finance the campaign to stop this tax.
A campaign will focus on making sure the Labor MPs understand that voting for this tax means seppuku for their political careers. Which means they have to tell their prime minister and treasurer they won’t vote for it.
The self-managed superannuants of this country face a choice: finance the fund to support this campaign, or pay the tax today and as it expands tomorrow.
Tim Wilson is a former assistant minister.