Topics: Labor’s superannuation broken promise
16/03/2023
08:37AM ACDT
Stacey Lee: Well, you’ve probably heard the news about the superannuation tax changes from ’25-’26. Around 80,000 people will have their superannuation impacted – those are the people with more than $3 million in super and the tax rate will change from 15 to 30 per cent for those super accounts. Steve Georganas is the Federal Labor Member for the seat of Adelaide and Simon Birmingham is a Liberal Senator for South Australia and the Shadow Foreign Minister. Good morning to you both.
Simon Birmingham: Good morning, Stacey, Nikolai and listeners.
Steve Georganas: Good morning.
Stacey Lee: Steve Georganas, we’ll start with you, as a member of the Government. Can you rule out any future changes to superannuation?
Steve Georganas: Ah look the Government made it quite clear that there wouldn’t be any changes… this is before the election… for this term of government. Obviously, there are no changes for this term of government and any changes would be announced at the next federal election campaign, just like these particular changes won’t come into effect ’til after the next election, so there are absolutely no changes during this term of government, and people will have an opportunity, to vote for and put their arguments down at the next federal election campaign.
Nikolai Beilharz: Is that a bit of a technicality, though? I mean, why announce it now? It is an announcement now – it’s an announcement of something that, if you stay in power, you will change.
Steve Georganas: Look, since coming to government, the Labor Government, Anthony Albanese and Jim Chalmers have been quite upfront about the challenges facing the economy and the budget that we inherited – you all know that we inherited $1 trillion of debt, as well as growing spending pressures in defence, health, aged care and NDIS, so it’s about responsible economic management. This was a hard decision to make, it was a hard choice…
Stacey Lee: …was it? It’s happened pretty quickly. It felt like it was only just flagged about a week ago and now it’s already passed through the party.
Steve Georganas: Look, it may have passed through the party but it hasn’t passed as and, as I said, it will not go through until the next, after the next federal election, so no one will be affected… what’s really important about this is that 99.5 per cent of Australians with super accounts, with super accounts, will keep on earning the same generous tax rates…
Stacey Lee: Alright and let’s…
Steve Georganas: …and 0.05 per cent, it’s only people over $3 million and that is less than 1-per cent of the Australian population.
Stacey Lee: Yeah and we do want to talk about that but let’s bring in Simon Birmingham now, former Finance Minister Simon Birmingham. If this isn’t coming in until after the next election… so, if the Liberals win the next election, will you scrap this plan?
Simon Birmingham: Well, we don’t even know all of the details of it yet but, let’s be clear, the Labor Party plan to legislate this in this Parliament; they’re going to do it in the term of this Parliament, having less than 12 months ago, just before Australians voted, cynically said that they wouldn’t be putting any legislation through, wouldn’t be changing superannuation laws; they are now going to hike superannuation taxes in the life of this Parliament and they’re going to put that into law ahead of the next election and then seek to dare anybody to repeal it afterwards. So, this is clearly a broken promise from Anthony Albanese; it’s inconsistent with what he said before the last election; and it is obviously a grab for more cash that they are making ahead of obviously more spending.
Nikolai Beilharz: Would you dare repeal it?
Simon Birmingham: Well, we’ll consider all of those things once we see some of the details and you hear Steve Georganas, Anthony Albanese, Jim Chalmers at present say that this only affects a very small number of people but let’s not forget that the $3 million threshold Jim Chalmers is talking about – he says he doesn’t want to index that – so he’s planning for this each and every year to capture more and more Australians within this threshold. It’s not just about those who are captured today; it’s about the fact that it would be a growing number of people having to pay this higher tax on their superannuation in the years to come.
Stacey Lee: Yeah but it would still be what we would think would be a small number of people, someone who has more than $3 million in their super. I’m sure you’ve seen the clip already, Angus Taylor, your Liberal colleague, in 2016 telling Sunrise on Channel 7 it’s totally inappropriate that someone who’s contributed millions and millions of dollars to their super gets those 15-per cent concessions, so, at that time, he and Tanya Plibersek agreed that people who have huge amounts of super should have a higher tax rate.
Simon Birmingham: Well, the debate back then actually was focused on measures that allowed people to basically pay no tax on earnings during their retirement years and changes were made to avoid that situation so people…
Stacey Lee: …he was talking about the 15-per cent concessions which now, this has been increased to 30 per cent under Labor’s plan.
Simon Birmingham: And, look, Stacey, I’ve got to say that most people I talk to, whether they have a lot in superannuation or a little in superannuation, they don’t like the idea of government tinkering with it, that they think Australians put money in good faith into superannuation and they don’t like the idea of the rules being changed or the taxes being increased once they’ve already done so. I mean, will the Albanese Government allow the affected Australians to withdraw the amounts they’ve got in their superannuation above this threshold without any penalty?
Stacey Lee: Well, let’s ask him. Steve Georganas, Federal Labor Member, will you allow people to draw money out of super before these changes make effects?
Steve Georganas: Ah, there continue – look, there – it’s going to continue to be no limits on the amounts of money people can put into their super and it applies to future earnings. This, this, these changes are not retrospective – let’s make that clear – and, look, it’s a bit ironic, the same people, [indistinct] Simon Birmingham, the same people who left us with $1 trillion dollars of debt now want to borrow billions more, to give big tax breaks to a very small number of people with over $3 million in super, very hypocritical. In government, they made much bigger changes to super which raised a lot more money and I think Simon Birmingham and Peter Dutton now have to explain why they won’t support energy bill relief for pensioners or more housing for women fleeing domestic violence but they will go to war to protect generous tax breaks for the you know, 0.5 per cent of the people with more than $3 million in super so…
Nikolai Beilharz: …is there an issue here, too, though, about the idea of broken promises and concerns that that we have heard from people, rightly or wrongly, saying ‘I’m worried now that you’re going to move the goal posts again and that my plans for retirement are going to shift and maybe I’m going to be penalised’ – broken promises can lead to that kind of fear, I guess.
Steve Georganas: Look, I make it clear that Labor was the instigator of superannuation, under Paul Keating, back in the ’80s. We supported superannuation, we wanted superannuation for working people to have some retirement funds, to live a better life in their retirement. It wasn’t set up to be a tax haven for millionaires, so…
Stacey Lee: …no but it’s…
Steve Georganas: …so let’s get that straight…
Stacey Lee: …set up for people to plan their retirement…
Steve Georganas: …that’s right….
Stacey Lee: …and people have spent years planning their retirement and now, in your first year in government, you’re changing their plans without letting them know you were going to do that and now they’re worried you might continue to do that.
Steve Georganas: Look, there, there are absolutely no changes ’til after the next election – let’s make that clear – and Simon Birmingham and Peter Dutton -they will have an opportunity to put their argument of why they’re not supporting it but they’ll also have to remember we’ve got $1 trillion of debt, and this will assist, as I said, for extra housing for women fleeing domestic violence; it will go into our energy bill relief for pensioners. And the Opposition has to explain why they’re not supporting that, and you know, when you talk about broken promises, this is a modest adjustment that won’t come into effect until after the next election and 99.5 per cent of people, will not be affected by this.
Stacey Lee: That is the voice of Steve Georganas – he’s the Federal Labor Member for the seat of Adelaide. Also with you this morning, Simon Birmingham, Liberal Senator for SA and the Shadow Foreign Minister… Simon Birmingham, there’s someone on the text line here who says ‘yes, break more promises like this one, rich tax breaks are immoral,’ so sometimes is it okay for a government to change their mind and break a promise they made years ago?
Simon Birmingham: Well, governments always have to respond to changing circumstances, but this circumstance hasn’t changed since the last election. These rules were clearly in place before the last election. There’s been no dramatic change in terms of the budget. If anything, the budget has in fact improved in that time – last March we saw the biggest improvement in the budget bottom line in the nation’s history, in the October budget it improved further and revenue will have only improved again since then, thanks to high commodity prices and relative continued low unemployment. So the Government doesn’t need this money for budget repair; it needs it for its increased spending and, frankly, does anyone really believe that Anthony Albanese and Jim Chalmers didn’t have this in mind pre-election despite their promises of not wanting to make these sorts of changes? I mean, as I said, the rules were all clear then – they’ve toyed with these policies before – they’ve gone to elections with policies similar to this before, now they’re just going to legislate and put into law something that they told Australians earnestly less than a year ago that they wouldn’t do.
Stacey Lee: Alright, well, let’s just go back to Steve Georganas on that one – when was the first time you heard about these changes and can you guarantee there won’t be any further changes to super announced in this term of a Labor government?
Steve Georganas: Look, the Treasurer has made it clear in interviews that he’s done in the media, on TV or on radio, he’s made it quite clear that no changes to the super tax concessions will take effect in this term of -Parliament and, as I said, Labor built super and we’ll always protect it….
Stacey Lee: …yeah and when did you…
Steve Georganas: …it wasn’t designed…
Stacey Lee: …first hear about these changes?
Steve Georganas: We just heard – I first heard about it recently, like most of the people – I’m not in Cabinet, nor am I a member of the Executive – but I suspect there’ll be a discussion at next week’s Tuesday Caucus meeting where all the details will be discussed and all the caucus will be informed about it but, as I said, this is a modest adjustment…
Stacey Lee: ..so did you hear about it in the news like the rest of us?
Steve Georganas: No, we heard about it through just discussions in the party, which is the normal way that you hear things. There will be a discussion in the coming caucus but, as I said, this is a slight, a very small adjustment and the Treasurer’s made it clear that no changes will come into effect until, you know, the end of this term of Parliament and, as I said, we built super as the Labor Party and we’ll always protect it. It wasn’t designed to be a tax haven for millionaires.
Stacey Lee: Thank you for your time, Steve Georganas, Federal Labor Member for Adelaide, and Simon Birmingham, Liberal Senator for South Australia – thank you both.
Simon Birmingham: Thank you.
Steve Georganas: Thank you.
[END]