The Coalition has not softened its stance on the division 296 tax on assets above $3 million within super, with Taylor confirming he is “100 per cent dead against it”.
Speaking at Momentum Media’s Election 2025 event on Thursday morning, the shadow treasurer noted that the “good news” is that the bill never managed to get through parliament, so a potential Coalition government would not need to repeal it.
“I can absolutely assure you it will not go into place if I am the Treasurer of this nation, if we have a Dutton-led national government, we are dead against it,” Taylor said.
“I mean taxing unrealised capital gains, give me a break. They are unrealised, that’s the point. So, how do you pay tax on an unrealised gain? You realise it. Well, these are small businesses. I mean, seriously, it wasn’t thought through. It wasn’t thought through.”
Adding that he thought there was a chance the Labor government would try to “push it through” during the last sitting week, Taylor said the tax is simply to fund “pet projects”.
“They are clearly trying to work with cross benches to get that over the line. But they are going to this election with that as a core policy for them, because they want the money and they want to spend it on whatever pet projects they want to spend money on,” he added.
“That will not be part of our costings.”
However, also speaking at the event, Mary Delahunty argued that the handwringing over taxing unrealised gains is being blown out of proportion.
“ASFA believes that the tax on earnings on assets above $3 million is a worthwhile pursuit, the bill and the shape that it’s currently in, obviously has some hairs on it,” the ASFA chief executive said.
“I’m not as concerned about the taxation of unrealised capital gains as some other commentators are. I think we’re all fairly familiar with land tax, which is also a taxation system that is based on unrealised capital gains.
“Whether or not that means you need to pay the tax at the time, or whether or not there should be some reform done to that bill that would see a debt held over. Those are the sorts of issues I think an incoming government might want to tackle if they want to bring more equity to the tax incentives in superannuation.”
This “taxing unrealised capital gains” argument against DIV296 is wafer thin. DIV 296 tax will be levied against the individual and calculated by reference to the aggregate attributable investment gains in beneficial interests in the superannuation system above the threshold (which might include unrealised capital gains). Individuals can choose to have an amount released from a superannuation interest if they don’t have liquidity or cash flow to personally satisfy the tax.
Any unwillingness or inability of ultra wealthy individuals to manage their personal tax affairs and cash flow is not a coherent argument against a measure which actually strengthens the legitimacy of the significant tax concessions in the superannuation system. There is a real risk that without public acceptance that the tax concessions are fair, the concessions might become an area of more significant reform.
The problems with judicial pensions, defined benefit administration, and indexation in the bills are real and genuine issues which need to be resolved, though. They’re easy to fix from a technical perspective if there is political will.
So you own an investment unit owned by any entity (individual, trust, company etc) and the price goes and you don’t pay tax.
But if in SMSF owns it, it does.
Other than being jealous of wealthy people I’d say it’s your argument that is wafer thin.
Almost no one objects to 15% of fund income above $3m TSB, except the large master trust (union) funds that can’t account for fund income.
It’s labor looking after its mates and sponsors is the cause of this issue.
The fundamental point that’s being missed is that the tax is levied against the individual, not against the fund (via the trustee). While calculated by reference to the aggregate increase in the value of the equitable proprietary interest that the member might be beneficiary, the individual is not constrained as to how they meet their tax obligations. The law will actually broaden the rights of the taxpayer, to allow for release authority from their interest in the trust to satisfy an individual tax liability.
Could I also request that you refrain from making misleading and ill-informed attempts at personal insults on a forum that should be professional and respectful.
So, the individual will be made to pay tax on paper gains that they or their super fund have not received a single cent from. In what world is that fair? Its a nonsensical attempt at reform. Creating money literally out of thin air for the government may make perfect sense to some for some strange reason, but none at all to the person or super fund that has to find the funds out of literally thin air to pay this.
The legislation contemplates that the individual taxpayer may have liquidity constraints and therefore allows the taxpayer to require the trustee to pay the tax on their behalf from their beneficial interest. Trustees of superannuation funds are legally required to manage liquidity and required to consider the impact of taxation when formulating investment strategy.
I understand a simple argument against that tax on grounds that a taxpayer would simply prefer to pay less tax, but manufactured arguments that attempt to sound smart by referring to unrealised capital gains as if there is some constraint on Parliament from levying such a tax are ill informed.
The large funds don’t care because it’s not their money and most of their profits are unrealised. Without unrealised gains, they would have no gains at all!
Point being, ASFA is the large fund association and SMSFs aren’t not in their remit. Join the dots on any commentary, it isn’t hard to identify self-interest and/or politics. The simplistic formula that Treasury disgraceful published in the draft bill suits large funds. They were involved in the consultation before any of us were aware what was being cooked up. So another dot exercise, industry funds are ALP aligned, the requirement to have union officials involved is an obvious clue there, so the “for” commentary re Div 296 is easy to explain, whoever espouses it.
Sure, make super taxes higher but don’t penalise SMSF because APRA funds have “difficult” systems that don’t lend themselves to legislative adjustments easily.
The very nature of SMSF accounting makes identifying taxable income per member easy to identify, we just need the chance to report this for the purposes of any new member balance based tax. The opposition to this draft (or daft) idea for a new tax is about the tax base, not the actual principle of collecting additional INCOME tax. Perhaps some accountants need to try out for Treasury roles?
Well said, namesake. The Industry Funds hate self managed super. Their ambition is to control all super savings and use investments to acquire big shareholdings in large Australian listed companies to influence directors (and probably to appoint a few of their union stooges as directors) for their own political and industrial ends. SMSF’s, with over $1 trillion in investments, are a major impediment to Industry Fund objectives. So, Mary, don’t be surprised if SMSF’s give no credence to your utterings. We are we equipped to “know thine enemy”.
Obviously, out of her depth and should not be holding the position of CEO of ASFA.
If ASFA continue to support Mary Delahunty, ASFA are not supporters of superannuants.
As a political propagandist, Mary Delehanty would make even Joseph Goebbels blush with embarrassment. [i]”I think we’re all fairly familiar with land tax, that is also a taxation system that is based on unrealised capital gains”.[/i]
As an ex-alp political propagandist she should be aware that the Andrews Labor government here in Victoria introduced unrealised capital gains tax by stealth by increasing the land tax tax rates and dropping the threshold to virtually zero thereby subjecting all property (other than residential property) to massively increasing land tax impost which is effectively capital gains tax by stealth.
If Labor wants to bring this in, it should be made very public. This tax is obscene, egregious, unfair and unjust. Land tax is not the taxing of unrealised capital gains. BTW if you believe that it is, then to bring on another tax on unrealised capital gains is double-taxation which is illegal in this country.
This tax equates to 60% tax in some cases and is never refundable. It is obscene to tax super higher than the taxing of wages, and for those at the lower end, they get a rebate to ensure they don’t pay higher taxes within super.
This will affect many people and ruin their lifetime savings plan as punishment for their hard work and sacrifice.
Who needs enemies when you have a friend like Mary Delahunty! Complete lack of understanding of the ramifications for so many re taxing unrealised gains in the short and medium term. Hard to understand how someone so out of touch with such taxation ramifications could be CEO of ASFA.
Quite contrary