James Morrow: Fight against Labor’s super tax must focus on the fact it is not indexed

By fighting against Labor’s super tax with the focus on it is not indexed gives the Liberals the opportunity to reclaim the mantle as the party of the young and aspirational, writes James Morrow.

Politics is the art of the possible, and as Gough Whitlam once said, only the impotent are pure.

It’s something Opposition Leader Sussan Ley and her colleagues ought to consider as they prepare to return to parliament and contest the only real economic fight Labor has put on offer, i.e., the government’s plans to change how our superannuation balances are taxed.

Here the opposition needs to make a choice: Will they continue to keep on doing what they’ve been doing and end up in a heap?

Or, will they start boxing clever and see the chance in this fight to reclaim the mantle as the party of the young and the aspirational?

Because the opposition can, if it chooses, continue to bang on about the unfairness of taxing unrealised gains and how it would open the door to all sorts of socialist tomfoolery down the road.

Opposition Leader Sussan Ley ought to consider contesting the only real economic fight Labor has put on offer. Picture: NewsWire/Martin Ollman

They would be completely right on the arguments.

But if they go down this road, they will also lose the fight.

Consider where we are.

Sticking up for the older and the well-off will just lead to calls for heads on pikes – so it would be far smarter to pick up on that the super tax is not indexed.

Australia’s housing and cost of living crises may have been made instrumentally worse by the government’s policies on energy, red tape and immigration.

Yet Labor has done a fine job convincing voters these problems are really the fault of clueless Liberals and wealthy boomers.

In the current climate, sticking up for the older and the well-off will just lead to calls for heads on pikes.

Far smarter to pick up on the other big problem with the proposed regime, namely, that the tax is not indexed.

ACTU Secretary Sally McManus has called out the $3m threshold standing in perpetuity, rather than being tied to inflation, as unfair. Picture: NewsWire John Appleyard

As it stands, the $3m threshold will stand in perpetuity rather than being tied to inflation.

According to the Financial Services Council, that means 500,000 people currently in the workforce will be captured by the tax.

This is far more than the 80,000 well-heeled oldies sipping fluffy ducks poolside in Port Douglas that Labor likes to claim.

No less a figure than ACTU secretary Sally McManus has called this out as unfair, giving the Liberals a golden opportunity to wedge the government on the question, does Labor stand for the young and hardworking, or not?

Even better, it would give the opposition a chance to reignite the idea – flagged and then disgracefully smothered during the 2025 campaign – of indexing tax rates overall.

Bracket creep, the phenomenon whereby workers are marched into ever higher tax brackets as their pay (but not income tax rates) move with inflation.

It’s a cruel tax on the young and the ambitious and it means the government can keep growing in perpetuity off the back of workers’ efforts.

The superannuation fight, if tied to indexation rather than unrealised gains, could be the Coalition’s first step in its long fight back to power.

Will they take it?

Well, in politics as in life, anything’s possible.

Originally published as James Morrow: Fight against Labor’s super tax must focus on the fact it is not indexed