Shadow finance minister Jane Hume told Sky News on Monday Division 296 “should have been doomed from the start”.
The proposed legislation, which doubles the tax rate on super earnings above $3 million from 15 per cent to 30 per cent, was shelved in December, however, it has refused to stay buried, with a think tank this week calling for its enactment.
Namely, the Australia Institute said on Monday the stalled changes “would make the nation’s super system fairer, at a time when so many Australians are doing it tough”.
However, the tax faced little support with the crossbench having refused to support the policy and the Coalition’s vow to repeal it if it passed into law before the election.
Speaking on Sky News this week, Hume referred to the tax as a “broken promise” that “should have been doomed from the start”.
“It’s a tax on unrealised gains. It would be the first time that your profits would be taxed before you’ve actually made any profits,” Hume said.
“It’s a brand new kind of tax, one we haven’t seen in Australia before. One that hasn’t worked in any other jurisdiction and it’s not indexed,” she continued.
“This was a terrible idea from go to woe”.
Hume reiterated that the Coalition would not only vote against it but “should it pass and we get into government, then we will repeal this terrible Labor tax”.
On the SMSF Adviser Show, Smarter SMSF chief executive Aaron Dunn recently said the survival of the Division 296 changes depends heavily on whether or not the government called an election before the federal budget slated for March.
“First, quite clearly, we’ve seen both sides of Parliament move into election mode. That’s one thing, and we’ve seen announcements already start to occur,” Dunn said.
“What we have heard Labor discuss is they remain committed to introducing an additional level of tax, as we know it Division 296 tax, which in its current form, under the current government, it seems like it has been defeated.
“Yes, there are some further sitting days, but unless they can get three crossbench senators, which at this stage appeared unlikely, it feels like it’s dead and buried.”
However, he said this would only continue to be the case until the upcoming federal election was decided and a government formed.
“If it’s the Labor Party, they remain resolute to look to introduce such a measure. Now, that will then depend upon it being reintroduced and then whether there is a minority government in the House or majority, and therefore who controls the Senate as well,” Dunn added.
“So, there’s a lot of balls in the air when it comes to this particular measure. The likelihood is our 1 July 2025 start date is dead and buried. It seems unrealistic but it doesn’t mean that this legislation is dead and buried because it will be dependent upon who takes government and in what shape they take government.”
