David Gillespie (Lyne, National Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023. What bad bills these two are. I can't believe that anyone on that side can agree to breaking one of the essential provisions of our taxation system—that is, taxation of unrealised capital gains. Paper gains are going to be taxed in your super fund, even though it may be an illiquid asset, like someone's farm or a business bit of real estate that is essential and that can't be sold, or the family business would suffer. Also, imposition of a higher tax rate, once the value of the super fund is above $3 million, sounds a lot now but it is not indexed. The whole purpose of superannuation is to make lots of investments that compound in value. The government says this is going to affect only 80,000 people, and they trot out, way out of left field, the one person in Australia who's got over $500 million in their super fund. Trust me: I think people with that amount of money have their accumulated wealth in lots of other things. I would say he or she would be a very, very small example, which they use to justify changing all the rules around superannuation.

This effectively will double superannuation for one in 10 Australians. That's a significant number of people, and many of them will be small and family businesses whose whole life is wrapped up in their business. When they sell their business, multiple decades of family effort will be taxed at a much greater rate than they thought it would be when they made these long-term decisions. All these superannuation decisions are long-term decisions that have huge ramifications if the playing field is changed when you are 20, 30 or 40 years into accumulating your retirement savings.

It also stops companies from offering franking credits to Australian investors, super funds and charities. At the last election, and since they've come into government, this government has said they would not change superannuation rules. They lost the election back in 2019 because they did exactly that, and they've come into government now and done the same thing! The voters will catch up with you on this. They are catching up at light speed. I suppose that's why we've just had the budget that we've had, which will drive inflation and will drive up interest rates. For those who have cash invested, interest rates will go up, and superannuation balances. So, if these changes aren't indexed there'll be plenty of young people—my children, your children—who will become adults, like us now, getting towards the time when they will rely on their super funds, who will I suspect have $3 million superannuation balances. I suspect that by then many of this current young generation that is just starting work will have $3 million superannuation balances; it won't be exceptional. It will be way more than 80,000 Australians.

Taxing unrealised capital gain is so out of left field and so illogical. It's been floated before; we've heard it discussed. Most people who are financially literate think: 'How does that work? How can you tax something that's just a paper profit?' Assets go up and down in value. Does that mean that if the asset goes down in value then at your next tax return or your next superannuation reporting the government is going to give you a tax refund? It's absolutely crazy. They should just stick with the principle that has been running accounting in this country: that capital gains are taxed at the time that the gain is realised, in hard cash. There are so many other things that are really long-term bad outcomes for investment and business in this country.

Now, the government haven't totally gotten rid of franking credits; they're just going around the back way. When they're having capital raisings and people are making large investment decisions, Australian people who are looking to invest in big companies might think: 'Well, if we invest in Australian companies we'll get franking credits, which means we won't be paying twice. The company will pay the tax on the profit and then when we get the dividends the tax has been paid on it.' That is a big driver of people investing in Australian companies, particularly Australians. But the government want to get rid of that—through the back door.

We need to realise that when bad legislation comes before this place you don't try to short-circuit the process. At least they're not guillotining the debate on this one as they did on the last bill. But this is a bad bill. It can't be supported. If they were to amend some of these rules then yes, we would consider them, if it was for the good of the economy. It's just a question of a tax-hungry government who will tax you more for longer, and you'll have less of your money if you vote for this bill.

See this speech in context