14 October 2025
David Penberthy
We’ve got the Shadow Treasurer, Ted O’Brien, on the line. Maybe he’s going to have a crack at that. Mr. O’Brien, good morning.
Ted O’Brien
Good Morning Dave and Will.
David Penberthy
To cut through all the wah about it, I think there was a general principle about this being an attack on on reward, you know, people work really hard all their lives, and the fact that it wasn’t indexed, and the facts, the fact that, you know, you can’t tax something that doesn’t exist, which is what this tax on unrealized gains was going to do. And what’s your assessment of the backflip? And what do you think of the new proposals?
Ted O’Brien
Well, I think the backflip is a welcomed move, because their plan, Labor’s plan was basically to tax profits that don’t exist. So theoretical profits, so if you’ve got superannuation, you got a balance there above three mil, and there’s a company whose valuation goes up, you get no money in your bank account. It would you just start getting taxed. And so it really was going to be bad news for farmers who might have their land in a superannuation fund. Small business owners will sometimes have the building they operate from in their superannuation fund. So if the valuation of the land or the or the building went up, suddenly, you got to start paying the tax man, but you got no cash. So what do you do? You have to liquidate your assets. You have to go borrowing. And so this was just nuts. It was a breach of the tax law that Australia would never have seen. And so it was really dangerous. And then they said, we’re not even going to index a threshold. So 3 million bucks is a lot of money, but over time, you will see today’s average income earner in their 20s, as time goes on, that they’ll be well over three mil. Sounds like a lot today, but well, it won’t be tomorrow, and so then you’ve got them going after younger Australians, and this just kills aspiration. I mean, we want Australians to get ahead, whereas this tax was really all about taking from hard working Australians to feed the government’s spending spree. Because the government’s spending more money, right? This federal government spending more money than any government we’ve seen outside of pandemic for about 40 years, and the more it spends, the more it needs money from somewhere else. And it’s doing two things. It’s racking up debt, which will hit 1.2 trillion bucks before the next election, and it’s going after taxes. And so this plan of theirs was going after people’s savings, which they put in their superannuation accounts, and trying to get as much as they can, including taxing people for theoretical profit, which is the unrealized capital gains part.
Will Goodings
If the indexation component of this was an attack on young people, does the same hold true then for the failure to index income tax brackets? And as the time come for a look at that?
Ted O’Brien
Well, there’s no doubt that income tax brackets are a problem, and the Coalition had planned to remove one of those Labor put it back in. It’s basically Labor’s plan to secretly take money from people without them knowing about it. So if you look at the Budget papers, if you’re really that interested, what you’ll see is Labor is planning at least a decade of deficits, and then suddenly, after about a decade, they bring in as much money as they’re spending, and it’s enormous, lift in money they’re going to be bringing in. Where does it all come from? It comes from personal income taxes, and that is because of bracket creep. So the more money you earn, you know, next year, you earn a bit more money than you did this year. Well, you might creep into a higher tax bracket, so you get taxed more, and that is a problem, and it just means that Labor’s only way back to a balanced budget is to increase personal income tax.
Will Goodings
Well, then the execution of this by all and sundry was, was, was criticized. However, the impetus behind it sounds like a concept you agree with, and that’s budget repair. It’s about putting more money back in coffers. These changes will take money from the the future of the budget. It will put it in a weaker position. Where would you like to see that come from? And how can that be made up now that it will be foregone as a result of this backflip.
Ted O’Brien
So you’re right. So this backflip creates about a $4.2 billion black hole in Labor’s budget. What they’re proposing now is to effectively rob Peter to pay Paul. What they should be looking at as a priority is two things. One is. They should stop the spending spree. Just stop spending so much money because it’s out of control. And the more they spend, the more they have to tax people or put it on the national credit card for the next generation. Number two, they should grow the economic pie. It’s just the the well proven principle that if you can actually grow the economy, you lift all boats. But the economy at the moment isn’t growing. Productivity, which is like people’s living standards, they have dropped more in Australia than any other developed country. And that’s because we are having to use more inputs to create the exact same amount of outputs in our economy. We’re working harder for less, and this all comes down to government’s economic policy settings. So there are two priorities. Stop the spending spree, grow the economic pie.
Will Goodings
Ted O’Brien, do you have any concerns conceptually about superannuation and the way it works at the moment, where, whereas, as opposed from being a safety net for retirement, it’s been seen as an investment vehicle by some?
Ted O’Brien
Look, I think my main concern at the moment is that the Albanese government is trying to turn what has been a vehicle, like a system for Australians to save for their future, into a scheme for the government to go and get revenue. That’s my main concern. The other issue, I think we’ve had is multiple thresholds, complexities, uncertainties, even all of the talk now about the government’s had this one bad plan on superannuation, they’ve now dropped it, which we welcome. On the same day, they’re announcing another series of changes to superannuation. And so everyday Australians, they just want the confidence that if they’re going to put their money away for the future, that governments aren’t going to keep changing and changing and changing things, so I think that’s the key issue. And then, of course, it’s up to Australians to decide how they use their own money, and so long as they’re following the rules of the game, it’s up to them to decide if they want to invest, if they want to spend. There are certain rules around superannuation, where you can’t touch your own super for a period of time. Of course, the Coalitions had policies in that regard, saying, well, there are times when you should be able to access your superannuation. It’s your money. Doesn’t belong to government. And I think we have to remember that. People’s superannuation money is not government money. It belongs to the people who earn it and save it. It’s their money, and they have the right to use it.
David Penberthy
Ted O’Brien, the Shadow Treasurer and Deputy Leader of the Liberal Party, thank you for joining us.
ENDS