Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

I thank all honourable members for their contribution to the debate, and I again thank the member for Wentworth for her engagement on this issue. I know she has thought deeply about this and other issues that we've engaged on around the taxation system. I don't intend to go through all of the things that I've said in response to previous amendments in other debates, out of respect for the patience of the House and all the members here. I will just address a few things.

I know the member for Wentworth has been passionate in her advocacy for tax reform in this country, and we agree we need tax reform. Indeed, that's why we introduced changes to the personal income tax regime in this country. The average Australian taxpayer is paying $38 a week less tax today as a result of the changes that we introduced into parliament in the first quarter of this year. They're about $1,900 per annum better off as a result of that.

This is a modest change to the taxation arrangement on superannuation funds. I repeat that, even at the 30 per cent rate, for those funds with earnings above $3 million it's still an incredibly concessional tax rate. We fully predict that, either individually or upon advice, those people with fund balances in excess of $3 million will continue to keep their money in superannuation, because every piece of advice they'll receive will say it's a better taxation arrangement that they're going to get outside superannuation.

I'll also address some of the other headlines. It is simply not true that unrealised capital gains aren't taxed anywhere in the world. It's not even true in Australia. There are a whole range of taxes that apply. Whether it's land tax, the taxation arrangement on APRA regulated funds, stock-in-trade arrangements on businesses—there's a whole range of taxes that currently apply, in Australia and elsewhere around the world, to unrealised capital gains. I simply make that point.

Thirdly, we've listened to and thought deeply about the liquidity issues that members have raised. They're generally raised in relation to lumpy assets, like real estate. The examples that are generally brought forward are commercial real estate inside a self-managed super fund or a farm. The simple fact of the matter is that these assets are earning money. If it's a commercial property, it's earning rent. If it's a tenanted property in the residential real estate market, it's earning rent. If it's a farm, it's earning income. That income is available to cover any liability that may be incurred as a result of these new arrangements. Other, non-fund income is also available to meet the liability.

It is also a feature of the arrangements that have been put in place in this bill that a capital loss can be brought forward. A loss made in one year can be offset against a gain made in a subsequent year. I repeat: it's a modest change. I don't seek to discount the genuinely felt and well-advocated positions that have been put by members of this House. We've thought through them all.

I know the member raised the review. I've had a look at this. I don't think a review which is to be tabled in parliament which would commence almost immediately after the implementation of the bill is going to be an effective tool to get to the issue that the member is seeking to deal with. There will be a post-implementation review, and it will be required to be completed prior to 1 July 2027. That's a time after which you'll have had two cycles—two taxation years will have passed—and it will be able to look at the issues of concern.

Just briefly, I have also looked at the issue in relation to venture capital and startups, and I've met with the member for Wentworth and some of her constituents. I was concerned that this would be an issue at scale. On the data available to me, it's not. Less than three per cent of the total assets, and that is the very top end of funds, would be invested in these classes of assets—that is, if you were to include all debt securities, all unlisted shares and all loans in that class of assets. Clearly that's not true either. So at the very top end it's three per cent of those types of assets. I don't think it is going to have the impact that the member is concerned it will, but I am absolutely confident and would commit that a review conducted of these arrangements would look at and deal with that issue.

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