Superannuants are the Coalition’s people
Australians have more than $4 trillion of their wealth stored in superannuation accounts, money they are relying on for a dignified retirement.
For the most part, it was not their choice to accumulate their life savings in their super accounts—rather, it was a decision made for them by government.
As compensation for their being denied that freedom, the earnings on their savings are taxed a bit lighter than they otherwise would be.
And, as a consequence, as their savings accumulate more quickly, not only do they personally benefit from greater wealth, but so too do the Australian people.
Because those more rapidly growing savings are then invested to support the more rapid accumulation of physical capital—the factories, warehouses, data centres, machines, tools, trucks, software—which drive higher productivity, higher wages, and higher employment, and ultimately greater prosperity for all Australians.
That is how today’s economy was built and it is how the economy of the future will be built too.
We Liberals have a unique appreciation for this virtuous cycle of capital growth because it forms a critical strand of our philosophical DNA.
We do not demonise savers; we respect them. We do not punish risk-taking; we reward it. We do not pillage capital; we nurture it. As Liberals, that’s what we believe in. It’s who we are.
For many people, super is their nest egg. They worked hard all their lives, they followed the rules, they paid their taxes and a good chunk of their pay was locked away in their super accounts.
They were forced to go without, often at times of great financial strain, and they are owed a dignified retirement in return.
They do not expect to be thanked for their contribution—but nor do they expect to be targeted.
Through their working lives, they expect their super to be working for them. And, when they retire, they expect it to be there for them.
Because their super is their money.
Ultimately, our super system is built on trust.
Trust that their money will be managed solely in their financial interests. Trust that their super won’t be extracted in the form of exorbitant fees. Trust that governments won’t treat their savings as a personal piggy bank.
Trust is the foundation of superannuation. But I’m sorry to say that, under this Labor government, that foundation is cracking.
Labor thinks of super as its personal piggy bank
To Labor, superannuation is increasingly viewed as a tool for plugging budget holes and funding pet projects.
Labor politicians look out over this vast, $4-trillion pool of Australians’ retirement savings, and imagine all the wonderful things they could do with it.
One of Jim Chalmers’ very first acts as Treasurer was to convene a meeting of Australia’s big super funds to discuss how they might be able to help the government pursue its agenda.
It would be the role of super funds to build out the government’s housing targets. It would be the role of super funds to roll out the government’s energy transition. It would be the role of super funds to deliver on all manner of the government’s social objectives.
How the super funds could do all of this while fulfilling their obligations to members was anyone’s guess.
If it were in their members’ interests, then they should already be doing it.
If it were not in their members’ interests, then they should never be doing it.
The only other option is that it was nothing more than a photo-op by the Treasurer, utterly devoid of substance or consequence.
It was the same story with the Prime Minister’s recent visit to the White House.
The American press release proudly announced that $1.4 trillion in Australian super would be invested in the US as part of the deal. Meanwhile, this detail was conspicuously absent from the Australian press release on the visit.
Later, we were assured this was money that would have been invested anyway; that the government would never use Australians’ super as a bargaining chip.
Again, the most charitable version of events is that the announcement was mere spin, utterly devoid of substance or consequence. That’s the best-case-scenario for superannuants under the Albanese government.
More concerning as a matter of substance is the Treasurer’s signalling of a potential watering down of the Coalition’s super performance test—a landmark reform which has brought tangible benefits to superannuants—which some have speculated might be geared to enable or encourage super funds to invest in the government’s pet projects.
It goes without saying that the only changes anyone should be contemplating to the performance test are those that are unambiguously in the interests of members, not the government.
If it were just one thing, it might easily be dismissed. But, based on its repeated rhetoric and actions, it is quite clear what this government’s intentions are.
And that can only mean superannuants will be left worse off.
Labor’s Super Tax 1.0, 2.0 and… 3.0?
When I say Labor thinks of super as its personal piggy bank, I mean it literally.
Labor’s Super Tax 1.0 was one of the most egregious money grabs in the history of Australian tax policy.
It should go without saying that taxing unrealised gains, and doing so in a way that would capture an ever-growing share of Australian workers, is an idea that should never have made it out of the lab.
If it was the Treasurer’s idea, he ought to be embarrassed. If he was simply following Treasury advice, then we are witnessing the decline of a once-great institution.
There are still many questions to be answered about Labor’s Super Tax 1.0.
Thankfully, the Prime Minister eventually forced his Treasurer into a humiliating back-down, sparing the Australian people from its worst aspects.
But it’s not over.
We have since come to learn that taxing unrealised gains was the simpler version of the policy.
That is, taxing realised gains presents serious implementation concerns—concerns so severe they prompted the Treasurer to resort to taxing unrealised gains just to make the plan feasible.
No doubt the government is again furiously reworking its Super Tax 2.0 into an even more complex Super Tax 3.0. Who knows if it will ever make it to the parliament.
But, even if it does, many are warning that, in the end, it may not raise anything like the revenue the Treasurer claims it will. That’s notwithstanding the reported $20-billion black hole the Treasurer’s Super Tax 2.0 could blow in the budget.
Only Labor could engineer a revenue grab that doesn’t raise any revenue.
With Labor’s budgets bleeding red ink as far as the eye can see and Labor’s debt on track to hit $1.2 trillion by the next election, the Treasurer has serious questions to answer about where he is going to get from money.
When you build your spending spree on an egregious money grab that never materialises, it’s the next generation that pays for it.
The Coalition’s approach
In contrast, the Coalition when in government enacted a series of super reforms that dramatically improved the super system—in the interests of superannuants. We made the system fairer and more efficient.
Because everything we do on super is with a view to the best interests of superannuants. Because they are our people.
Only we—not Labor—have their backs.
The Coalition’s approach is different. Our beliefs and our intentions are clear.
Superannuation is part of a worker’s pay. It is not a gift or a bonus, nor is it the government’s plaything. It is money earned by and owed to Australians.
Their super is their money. Full stop.
Only the Coalition can be trusted to protect it.
Thank you.
ENDS