Allegra Spender (Wentworth, Independent) Share this | Hansard source

In continuation of my previous remarks, I'd like to thank the member for North Sydney for her support of these amendments. As I described earlier, the amendments that I have put forward are, firstly, around allowing a greater time period in which to pay, given that people are being taxed on unrealised gains. Because these gains are unrealised, they relate to assets that have not been sold, or realised, and people may not have the cash to pay this. We should not be forcing people, or pushing people, to be paying tax on income that they haven't earned in a time period that is unreasonable—currently at 84 days.

My second amendment speaks to my concern about the impact on the venture sector and whether the government has adequately assessed that. I have put in my amendment that a review should be done on the impact of this sort of change on the venture and technology sector in particular.

Finally, I'm also calling for this legislation to acknowledge, and to try and give some confidence to, the people the member for North Sydney identified, by saying that this is not going to set a precedent for taxing unrealised gains in other parts of the economy. Frankly, these aren't the amendments I would like to pass. There are other amendments I would have loved to pass. Unfortunately, because this is an appropriation bill, I am unable to put forward the amendments that I would have put forward, but I do believe they should be considered.

Frankly, all this talk on unrealised gains is for superannuants who can calculate their actual earnings to pay their taxation on actual earnings. From my understanding, that would capture 80 per cent of the people that this bill is meant to address. So 80 per cent of the 80,000 people who would initially be affected by this would be able to pay tax on their actual earnings, and the 20 per cent who are in major funds would have to pay tax on unrealised gains. Then, it would be up to the funds to provide the right tax information so that, in the future, people perhaps would not have to pay tax on unrealised gains. I think that is an appropriate opportunity for the government to look at. From my understanding, just because APRA funds can't calculate gains that are realised funds versus unrealised funds, why should self-managed super funds be penalised for the technical incapacity of the other funds? I don't think that's a fair challenge. This change would make a huge difference to the self-managed super funds who are, by and large, the larger holders of these sorts of assets and the larger investors, particularly in the venture sector.

Failing that opportunity, there should've at least been a clawback mechanism to acknowledge that this is a proxy measure and that people may be overpaying their tax liability, because, as we all know, the value of assets goes up and down, particularly if you're in venture assets, where, for instance, the asset might be worth $50,000 one year and have a valuation of $2 million the next year. By the third year, it might be worth zero. A clawback mechanism would ensure that if you did have to pay tax at a valuation that you would never be able to realise then you could get the tax back. Again, that is a precedent we have in many other parts of our tax system, and it should be in this part of the tax system as well. I think these are some of the things that should have been in the legislation. These were alternative options for the government had it wanted to pursue what is a reasonable goal and do it in a way that is not so detrimental and not so distorting of our tax system.

I would like to ask the government a couple of key questions, via the minister. The first question to the minister is really around why the government chose to exclude people who can calculate their actual earnings—their realised gains versus their unrealised gains. Why did you choose to tax everybody on unrealised gains, when some people can actually calculate their realised gains?

The second question I really want to get an answer to is: what has the government done to understand the impact on the technology and venture sector, which is such an important part of our productivity and the economy. Those are two questions I would appreciate the minister's advice on.

See this speech in context