Geoff Wilson, chairman of Wilson Asset Management, said that while he supports the Greens’ commitment to calling on the government to amend the $3 million super tax by allowing indexation, it is now a priority to educate them about the impact of taxing unrealised capital gains.
“I am very supportive of the Greens and have a lot of respect for them,” he told SMSF Adviser.
“This is the logical conclusion to this legislation, which is grossly flawed and illogical. The Greens proposal of indexing it and even lowering the threshold to $2 million will be much more beneficial to the Australian population.”
Wilson said the numbers being quoted by the government that suggest the proposed tax will only impact a small number of high-net-worth individuals is incorrect.
“They are not using real-life numbers. In the white paper we released before the election, we showed that within 30 years, 8.1 million Australians will be over the $3 million mark – that is more than half of the people who have got super funds now,” he said.
“This is effectively a tax on young people, on innovation and on risk taking – on what Australia has been built on, the ability to have a fair go. The government has to ask itself whether the $1.1 trillion in SMSFs would then want to put their capital at risk if they may end up paying tax on it?”
He continued that from conversations with some of the 130,000 shareholders in his own company, they are now considering taking their money out of superannuation.
“The government is delusional if it believes it will raise the tax it is talking about because everyone is adjusting their portfolios – that is lost revenue,” he said.
“If the Greens vote against this legislation, it won’t make it through the Senate. And I take my hat off to crossbench senators David Pocock and Jacqui Lambie. They have stood incredibly firm against this. That’s the reason there is so much discussion on this issue now. The government said it had a mandate following the election, but it doesn’t have a mandate on this.
“No one expected the current make-up of the Senate and really believed this legislation was dead and buried.”
Wilson said his belief in the Greens in challenging the legislation stems from their support in overturning the franking credits changes the government wanted to introduce in 2019, and he is confident that they are “firm” in their push for the indexation of this current legislation.
“My challenge now is convincing them of the negative impact of taxing unrealised gains … There is always a risk in politics that people can get bribed,” he said.
“But the interesting thing for me is, if this does go through, it will put a nail in the coffin of the Labor Party because once anyone has had explained to them how taxing unrealised capital gains works, they understand it is flawed.”
As he did when fighting against the franking credits, Wilson launched a petition against the proposed super tax, and in two days, the number of signatures reached nearly 8,000.
He said almost half of those have come from people who do not have an SMSF.
“Since the petition was launched, it has blown our previous petition on franking in 2018–19 out of the water. It is attracting a 41,250 per cent higher level of interest than that of the franking credits,” he said.
“This is a strong signal that all Australians know taxing unrealised gains is flawed and needs to be stopped.”
He added that the petition is an attempt to bring the issue to the forefront of people’s minds, and although it is “great” that corporate Australia is speaking out, he is now trying to get the information to “trickle down” to the man in the street.
“The position of Labor winning again in three years’ time is questionable. If I was a Labor politician who won by only a small margin, I would be putting as much pressure as I can on the government,” he said.
“They know in their hearts this is bad policy, and if the voting public knows it and Labor brings it in regardless, it is a breach of their social contract with everyone who puts money into super.”
How dare Albo lambast Trump for the tariffs and say it was not the act of a friend – Albo – you are now acting in the most unfriendly and thieving manner by stealing from Australians retirement fund with unrealised capital gains. Shame on you.
If taxing unrealised gains in super goes ahead, how long before all unrealised gains are taxed??
Investors with illiquid assets (property, unlisted shares, private small businesses) will not have the cash to pay the tax and investment will slump possibly resulting in a massive recession.
Kerry, what a strange comment from someone visiting a SMSF site….
But I see you’re abiding by the contemporary Treasury, ATO, PBO and government narrative generally that the government “gives concessions”.
This new parlance that certain people are trying to normalise infers that anything less than a 100% tax rate constitutes ‘foregone revenue’ or is ‘taxpayer funding’.
It’s definitely a powerful message, however, to the growing culture of resentment and jealousy – I suppose that’s why it’s being propagated so hard.
Assuming this goes through as planned, at least let people withdraw funds over $3M if they choose. What I dislike is the bait-and-switch mentality of government, that provides big incentives to save via super and then changes the rules once funds are trapped (until preservation).
How do you give tax concessions to the 50+% portion of taxpayers who don’t really pay any tax?
Don’t let irrationally contrived figures and flawed logic in relation to the fundamental principles of taxation get in the way Kerry!
What hope is there when most Australians simply believe the rhetoric from politicians that don’t understand themselves or who have biased reasons of their own.
Most fail to understand that 1% of the top taxable income earners par 18.3% of the total tax revenue to the government. It is perfectly natural that they also get the highest share of concessions in superannuation, which was done to encourage savings which in turn encouraged investment and also being able to fund their own retirement.
How many billion are given to others by the Federal Government to fund their retirement because they cannot afford it?
How many billion does this 0.5% of high balance superannuants contribute to Australian Public Money through their superannuation taxes?
And how many billions are save by the Federal Government because these 05% of people do not need a pension because they can look after themselves?
What percentage of people pay neutral tax please?
Truly, these questions need to be answered and made public. Until this happens, we will continue to be the scape goats and we will continue to be under-appreciated for our massive contribution, far more than probably 99% of the population. Without us, this country truly would be screwed. Who else would pay for Government Pensions, NDIS, the care economy generally, not to mention roads, hospitals, schools etc. We need to be real on these matters please and the likes of the Greens and the Labor party need a wake-up call, as well as many of their followers.
So much spin and so many lies around this issue.
This reform needs to happen to force wealthy funds to either pay a fair share of tax or remove their funds from their Super Fund and pay tax without all of the concessions. Once Div 296 is in for a few years all of the wealthy funds will either be used to it or would have removed their billions from the fund and be paying a fairer amount of tax.
The Federal government gives over $33 bn in tax concessions to the richest 10% through CGTD + Super.
That’s how tax works, Kerry… Those who actually pay the tax will get a higher tax concession.
Anyone can access those concessions, they just need to make the decision to not have everything now and save for their retirement instead.
Fairer share – if they got to this position legally, good luck to them.
What would be your fair share of someone else’s earnings?