Dutton vows to repeal super tax hike as PM rules out capital gains tax change

Opposition Leader Peter Dutton is warning Labor will impose more tax increases in the wake of its change to superannuation tax concessions and vowed to reverse the decision while the prime minister ruled out any future changes to capital gains tax concessions on the family home.

A day after unveiling plans to increase tax on super earnings on balances over $3 million, Prime Minister Anthony Albanese said there would be no more changes to superannuation in this term of government, and ruled out taxing the capital gains from selling a family home.

Prime Minister Anthony Albanese said any changes to capital gains tax on the family home was a bad idea.Credit: Alex Ellinghausen

“We are not going to impact the family home, full stop exclamation mark. Because it’s a bad idea,” Albanese said on ABC’s RN Breakfast on Wednesday morning.

“It’s a bad idea because people who save for their home, and that they live in with their family ... it is something that we have no intention [of changing]. We will not be making any changes there.”

On Tuesday, Albanese announced the government will double the tax on superannuation earnings over $3 million from July 1, 2025 – after the next election. The change would affect about 80,000 people.

The plan gained early support from key crossbench senators but drew criticism from the Coalition over broken election promises after Albanese said ahead of the May election that Labor had no intention of changing superannuation.

Opposition Leader Peter Dutton predicts the Labor government will introduce extra taxes.Credit: Joe Armao

Dutton said on Wednesday the Coalition will not support the changes.

“We’re not going to support a broken promise. We’ve been very clear about that. We’re not going to be a party to the government’s broken promise.”

Holding a press conference at Avalon in Victoria, Dutton predicted Labor would add more tax changes after the government on Tuesday released new estimates that tax concessions were worth $150 billion.

“We’ve now seen the first change in what I think will be many changes in the superannuation and tax space over the term of this government and into the next term of government if they are re-elected.”

Asked if he would stop the change from going ahead in 2025 as planned if he won the next election, Dutton said: “We’re absolutely dead against it and we will repeal it.”

On Wednesday morning, Albanese said increasing the tax on super earnings on balances over $3 million from 15 per cent to 30 per cent was the “the only change we are proposing” for superannuation and said it was not a broken promise.

“This is a modest change. That is about improving the sustainability of the system. It’s important as well to recognise it’s not retrospective, but it applies to future earnings,” he said.

Treasurer Jim Chalmers said the government had not considered changes to superannuation tax before the election last year, or even before the October budget.

After the Tuesday announcement, Albanese refused to rule out taking other tax reforms to the election. Data released by Treasury showed tax breaks on super would be worth $50 billion this financial year, while the government will also miss out on another $50 billion due to the way Australia taxes capital gains.

Chalmers said the tax expenditure statement was not a policy paper, while shadow treasurer Angus Taylor called the super change “a slippery slope”.

“As part of putting out the tax expenditure statement where we know there’s over $150 billion of tax opportunities for this Labor government, a Labor government that is chasing your money because it doesn’t have enough of its own rather than managing its finances,” Taylor told reporters on Wednesday morning.

“We know that they want to raise taxes on Australians. We know when the Labor Party runs out of its money, it comes after yours. And we know that this is a very slippery slope that we now see the Labor Party on.”

Chalmers said he is comfortable with the government’s decision on superannuation and had come to it for the right reasons. He accused the opposition of being “all over the shop” in their response.

“There is a choice for this country to make. And last time Peter Dutton was asked to repair the budget, he went after Medicare,” he said.

“So people can choose if they want the guy who goes after Medicare, or do they want the guy in the government, who says let’s continue to give tax concessions in superannuation, but if you’ve got a fair bit of money in your superannuation, maybe those concessions can be a little bit less generous.”

“I understand the opposition says no to everything. I mean, they’re voting against more affordable housing for women fleeing domestic violence. They voted against energy bill relief for pensioners. They’re voting against more manufacturing jobs,” he said.

“And if they want to have a barney about that between now and the next election, I’m comfortable with that, because I think we’ve got the right policy.”

With Caroline Schelle

Cut through the noise of federal politics with news, views and expert analysis from Jacqueline Maley. Subscribers can sign up to our weekly Inside Politics newsletter here.