Latest news with #JimChalmers
Daily Mail
an hour ago
- Business
- Daily Mail
He's one of Australia's leading minds on super - and he's got a sensible idea about changing Albo's laws. But do YOU think Jim Chalmers will budge on his flawed tax grab?
Treasurer Jim Chalmers has declared Labor has a 'mandate' for a sweeping plan to tax superannuation before assets are sold - despite a warning it could amount to a new form of death duties. Labor needs the Greens' support in the Senate to pass its Better Targeted Superannuation Concessions bill that would see a new 15 per cent tax levied on unrealised gains on balances above $3million. The Opposition and superannuation groups are opposed to the idea of taxing assets in a self-managed super fund before they are sold, based on the paper or notional value of holdings. Labor's policy would mark a radical departure from the usual practice of applying the capital gains tax once something has been sold. Now a leading superannuation expert - Professor Robert Breunig, the director of the Australian National University's Tax and Transfer Policy Institute - has argued the government should consider a change to its proposal. Prof Breunig said the government should look into allowing the unrealised gains tax to be paid years later, when someone eventually sells an asset. He likened it to the standard practice of paying undue council rates after a house had been sold. 'If you're going to tax unrealised gains, I think you should be giving people the opportunity to defer paying the tax until they dispose of the property,' he said. 'That would be my preferred policy.' But Chalmers on Wednesday rebuffed a suggestion Labor would revisit the concept of taxing unrealised gains, even though someone inheriting a self-managed super fund could be left with a new tax liability. 'First of all, we're not changing the policies we took to the election,' he told the National Press Club. 'We've got a mandate for that change... What we're looking for here is an opportunity to build on the progress that we've made, including in the economy as you point out. 'We're looking for, not opportunities to go back on the things that we have got a mandate for, we're looking for new ideas.' 'Inheritance' tax accusations Labor's tax on super balances above $3million could effectively amount to an inheritance tax, along with a new tax on franking credits - or tax refunds for owning shares in a company that has already paid company tax. Senator James Paterson, the Opposition's finance spokesman, said the government needed to explain if taxing unrealised gains on super amounted to an inheritance tax by stealth. 'Labor's super tax grab has been on the public record for two years,' he told Daily Mail Australia. 'The Albanese Government should be able to fully explain the implications of their policy, including for people's wills. 'We should not be reliant on independent experts, the media or the Opposition to explain how this policy will work in practice. 'Jim Chalmers must be upfront about how his unrealised capital gains tax interacts with franking credits and inheritance.' A self-managed super fund can be passed on to a dependent or left to someone in a will. Professor Breunig said someone inheriting a self-managed super fund with more than $3million, upon the death of a parent, would effectively be paying a new form of inheritance tax with the 15 per cent tax on unrealised gains. 'Yes, sure it is, but that's true of a lot of our taxes - that's true with council rates,' he told Daily Mail Australia. 'It would be an inheritance tax if you were somehow paying back taxes on it - you inherit the liability.' A self-managed super fund, with a balance above $3million, would be subject to an unrealised gains tax if there was a property in the portfolio, under the government's Division 296 plan. That would be a departure from existing rules allowing someone to avoid paying the capital gains tax on a property they inherited, outside of a super fund. Prof Breunig said Treasury would benefit from being able to tax unrealised gains in a super portfolio, catching out those who left property in a self-managed super fund. 'Currently, we have a subsidy in the system that subsidies people passing out wealth to their children and you're kind of removing that subsidy,' he said. 'That is one of the attractions of the unrealised gains tax.' Future of the tax The Greens want the $3million threshold lowered to $2million but indexed for inflation. Prof Breunig said that would mean applying an unrealised gains tax to accounts typically producing an annual annuity, or guaranteed retirement living income, of $100,000. 'Two million's too low - how much money do people need to have a comfortable retirement?' he said. 'Now you're talking about a lifetime income stream that's more like $100,000, which for a lot of people isn't that much relative to how much they made in their lifetime.' Australian abolished inheritance taxes at a national level in 1979, with all the states getting rid of that tax by 1981. Labor's planned tax doesn't effectively levy a new charge on a superannuation fund balance being transferred to a loved one.
Daily Mail
an hour ago
- Business
- Daily Mail
3AW host Neil Mitchell sounds the alarm about Jim Chalmer's tax plan
Neil Mitchell has slammed Anthony Albanese 's government for having a plan to punish baby boomers as younger Australians increasingly decide elections. The 73-year-old 3AW host, from the boomer generation, suggested Treasurer Jim Chalmers had an agenda to tax older Australians over 60. 'Boomers beware. Jim Chalmers is taking about "intergenerational justice" in tax,' he said. 'That means a tax on boomers, who actually did a bit to build this country.' Chalmers used his National Press Club address this week to suggested Labor would use its landslide re-election to help younger Australians, with a hint about new taxes being considered to pay for this new relief. Millennials and Generation Z voters - born after 1981 - outnumbered boomers at the last election for the first time ever. 'The decisions we make in the 2020s will determine the sort of living standards and intergenerational justice that we have in the decades to come,' Chalmers said. 'I think there is a broad recognition of that.' Labor was re-elected last month with a plan to slash student debt by 20 per cent, saving the average graduate $5,520 at a cost to taxpayers of $16billion. It also offered tax cuts for low-income workers earning $18,200 to $45,000, with students, apprentices and part-time workers more likely to be young. This relief is set to cost the Budget $17.1billion over four years. That means Labor would either have to cut spending or increase taxes to fund relief that overwhelmingly favours the young, with Treasury only forecasting Budget deficits in coming years as gross government debt soars above $1trillion. That could see Labor review generous tax concessions on things like family trusts that can avoid paying tax on income generated from within the trust. Former Labor leader Bill Shorten lost the 2019 election proposing a new 30 per cent tax on family trusts as funds were distributed to beneficiaries. While that policy was scrapped, the government's upcoming productivity roundtable in August is expected to explore a range of new revenue-raising options, with Chalmers hinting at tax changes. 'The easiest thing in the world is for people to come to us and say we want you to dramatically cut the taxes in our part of the economy and spend dramatically more on our industry, without recognising that there are necessary trade‑offs associated with that,' Chalmers said. Treasurer Jim Chalmers used his National Press Club address this week to suggested Labor would use its landslide re-election to help younger Australians, with a hint about new taxes to pay for new relief The government is still proceeding with plans to impose a new 15 per cent tax on unrealised gains on superannuation balances above $3million, in a bid to raise $2.3billion a year in revenue. In Opposition, Albanese vowed to leave untouched franking tax credits for company shareholders and negative gearing tax breaks for investor landlords, even though house prices have surged at a faster pace since the pandemic. Labor also has no plans to introduce a capital gains tax on the family home. These existing arrangements favour boomers who were able to buy a house to live in cheaply after the capital gains tax debuted in 1985. Chalmers this week downplayed a point about government payments making up 27 per cent of the economy - the highest level since 1986 outside of the pandemic. 'It's not the highest spending since the 80s. I know that you mean absent Covid, but I think it's unusual that we absent Covid,' he said. 'Quite frequently I'll hear we've got the weakest growth in 40 years, or we've got the highest spending. That's not true.' Boomers still have political power with both Albanese and Opposition Leader Sussan Ley hailing from that generation, covering those born from 1946 to 1964. Chalmers belongs to Generation X, spanning 1965 to 1980, along with every state premier. Only the Northern Territory has a Millennial leader.
Sky News AU
2 hours ago
- Automotive
- Sky News AU
Labor mulling family trusts and electric vehicle rebates in major tax reform shakeup for second term economic agenda
Family trusts and electric vehicle rebates are likely to be in the Labor's sights as it looks to raise revenue while delivering income tax cuts and boost the nation's budget. The Albanese government has swept into its second term with a large majority and with it, the promise of tax reform. Treasurer Jim Chalmers on Wednesday hammered in this pledge during an address to the National Press Club where he put forward Labor's case in the productivity-boosting agenda. Sources told the Australian Financial Review Labor is likely to propose higher taxes on family trusts as Treasury ramps up scrutiny of the tax-friendly investment vehicles. Many Australian families and businesses use the trusts to protect their assets and split income between beneficiaries to reap the benefits from the lower tax rates. The individuals who are the beneficiaries of a trust pay their personal income tax rate on the distributions. This means the tax paid on a trust can vary from zero per cent to 47 per cent. Labor at the 2019 election proposed a minimum 30 per cent tax rate on trusts as part of its failed swath of tax reforms, including changes to franking credits, negative gearing and capital gains tax discounts. The possibility the Albanese government is considering changes to family trusts comes as Mr Chalmers on Wednesday flagged a new road-user charge for electric vehicle drivers that would replace the fuel excise. The typical household with a car running on petrol pay more than $1200 in fuel tax while EV drivers are exempt from the levy as they don't use traditional fuel sources. 'We will also continue to work with states and territories on the future of road-user charging,'' Mr Chalmers said. 'All of this represents a big agenda on the supply side of our economy. None of these reforms are simple.' The AFR in March reported the estimated $55m cost of the EV rebate for the 2024-25 financial year had ballooned out to $564m per year in missed tax revenue. Mr Chalmers was also questioned on possible changes to GST ahead of Labor's upcoming productivity roundtable - where Australia's economic agenda will come under the microscope. 'I suspect the states will have a view about the GST. It's not a view I've been attracted to historically, but I'm going to try not to get in the process of shooting ideas between now and the round table,' Mr Chalmers said. AMP's chief economist Shane Oliver urged Labor to hike the GST and apply it across the board to minimise income tax. 'In an ideal world you would have less reliance on income tax and reduce the disincentive effects associated with it and have more reliance on GST,' Mr Oliver told Labor is also embarking on making changes to large superannuation accounts, which includes taxing unrealised capital gains, and has met fierce opposition from business leaders and economists. The changes come as Labor faces a decade of deficits and ballooning costs of the NDIS and defence. Labor also faces reduced tax revenue from lower tobacco excise and falling fossil fuel exports as Australia continues on its renewables shift.
Yahoo
6 hours ago
- Business
- Yahoo
Treasurer's huge call on tax changes
Treasurer Jim Chalmers has announced his ambition for economic and tax reform, and while he remains tight lipped about what's on the table, he has ruled out two key changes. Speaking to the National Press Club on Wednesday, the Treasurer announced the government will hold a productivity roundtable from August 19 to 21 for the purpose of seeking ideas for reform from business, unions, civil society and experts. The gathering will be capped at 25 people and held in Parliament House's Cabinet room. 'Obviously there are some things that governments, sensible, middle of the road, centrist governments like ours don't consider,' Mr Chalmers told The Conversation's Michelle Grattan. 'We don't consider inheritance taxes, we don't consider changing the arrangements for the family home, those sorts of things.' Mr Chalmers said he believes limiting the narrative to 'ruling things in or ruling things out' has a 'corrosive impact' on policy debate, but conceded to ruling out the historically controversial taxes. Inheritance tax is a tax you pay on assets inherited when you are the beneficiary of a will. While inheritance taxes used to be common in most states, by 1981 all Australian states had abolished them. The GST was another key tax eyed for the roundtable. Mr Chalmers has historically opposed lifting the GST but is facing increasing pressure from the states to do just that. The GST has remained at 10 per cent for 23 years. 'You know that historically I've had a view about the GST,' Mr Chalmers told the Press Club. 'I think it's hard to adequately compensate people. I think often an increase in the GST is spent 3 or 4 times over by the time people are finished with all of the things that they want to do with it.' Mr Chalmers said he hadn't changed his view on GST and he won't walk away from it but stressed he's open to hearing ideas on the issue at the roundtable. 'I've, for a decade or more, had a view about the GST,' he told The Conversation. 'I repeated that view at the Press Club because I thought that was the honest thing to do, but what I'm going to genuinely try and do, whether it's in this policy area or in other policy areas, is to not limit what people might bring to the table.' Two years ago, Mr Chalmers warned that raising the GST would likely not fix federal budget issues since even though the tax was collected by the federal government before it was distributed back to the states. 'From my point of view, there are distributional issues with the GST in particular. Every cent goes to the state and territory governments, so it wouldn't be an opportunity necessarily, at least not directly, to repair the Commonwealth budget,' he said. One thing that will remain in play though is the government's pledged superannuation changes, that would increase tax on investment returns, including interest, dividends or capital gains, on balances above $3 million. 'What we're looking for here is not an opportunity at the roundtable to cancel policies that we've got a mandate for; we're looking for the next round of ideas,' he said. 'I suspect people will come either to the roundtable itself or to the big discussion that surrounds it with very strong views, and not unanimous views about superannuation. 'But our priority is to pass the changes that we announced, really some time ago, that we've taken to an election now, and that's how we intend to proceed.' Mr Chalmers said the idea of extending the capital gains tax on superannuation balances to other areas had not been considered 'even for a second'. Sign in to access your portfolio
News.com.au
7 hours ago
- Business
- News.com.au
Treasurer Jim Chalmers rules out two key tax reforms
Treasurer Jim Chalmers has announced his ambition for economic and tax reform, and while he remains tight lipped about what's on the table, he has ruled out two key changes. Speaking to the National Press Club on Wednesday, the Treasurer announced the government will hold a productivity roundtable from August 19 to 21 for the purpose of seeking ideas for reform from business, unions, civil society and experts. The gathering will be capped at 25 people and held in Parliament House's Cabinet room. 'Obviously there are some things that governments, sensible, middle of the road, centrist governments like ours don't consider,' Mr Chalmers told The Conversation's Michelle Grattan. 'We don't consider inheritance taxes, we don't consider changing the arrangements for the family home, those sorts of things.' Mr Chalmers said he believes limiting the narrative to 'ruling things in or ruling things out' has a 'corrosive impact' on policy debate, but conceded to ruling out the historically controversial taxes. Inheritance tax is a tax you pay on assets inherited when you are the beneficiary of a will. While inheritance taxes used to be common in most states, by 1981 all Australian states had abolished them. The GST was another key tax eyed for the roundtable. Mr Chalmers has historically opposed lifting the GST but is facing increasing pressure from the states to do just that. The GST has remained at 10 per cent for 23 years. 'You know that historically I've had a view about the GST,' Mr Chalmers told the Press Club. 'I think it's hard to adequately compensate people. I think often an increase in the GST is spent 3 or 4 times over by the time people are finished with all of the things that they want to do with it.' Mr Chalmers said he hadn't changed his view on GST and he won't walk away from it but stressed he's open to hearing ideas on the issue at the roundtable. 'I've, for a decade or more, had a view about the GST,' he told The Conversation. 'I repeated that view at the Press Club because I thought that was the honest thing to do, but what I'm going to genuinely try and do, whether it's in this policy area or in other policy areas, is to not limit what people might bring to the table.' Two years ago, Mr Chalmers warned that raising the GST would likely not fix federal budget issues since even though the tax was collected by the federal government before it was distributed back to the states. 'From my point of view, there are distributional issues with the GST in particular. Every cent goes to the state and territory governments, so it wouldn't be an opportunity necessarily, at least not directly, to repair the Commonwealth budget,' he said. One thing that will remain in play though is the government's pledged superannuation changes, that would increase tax on investment returns, including interest, dividends or capital gains, on balances above $3 million. 'What we're looking for here is not an opportunity at the roundtable to cancel policies that we've got a mandate for; we're looking for the next round of ideas,' he said. 'I suspect people will come either to the roundtable itself or to the big discussion that surrounds it with very strong views, and not unanimous views about superannuation. 'But our priority is to pass the changes that we announced, really some time ago, that we've taken to an election now, and that's how we intend to proceed.' Mr Chalmers said the idea of extending the capital gains tax on superannuation balances to other areas had not been considered 'even for a second'.
