Capital gains tax gaffe makes a new mess for PM to clean up | Samantha Maiden

There is an iron law of Australian politics that Anthony Albanese’s Treasurer just messed with, writes Samantha Maiden.

It’s an iron law of politics in Australia that you don’t touch capital gains tax on the family home.

The mere mention of the idea should send alarm bells ringing.

No politician should countenance the idea, unless they want to open up the gates of hell.

Prime Minister Anthony Albanese insists that idea has never been considered.

How, then, to explain the mess he was forced to clean up this week?

A mess created when his Treasurer Jim Chalmers ventured into the wilds of breakfast television and somehow left the door ajar before offering a grovelling mea culpa.

Capital gains tax is the tax you pay on profits from selling assets, such as property. If you live in the property and it’s your main residence you are exempt from paying CGT when you sell. Any move to change that would hit average Australians with massive tax bills when they sell the family home.

The Treasurer’s task this week was to explain his proposed change to hit the rich with some extra tax if they have more than $3m in super.

Example: did you know there’s a mystery millionaire in Australia with more than $400m in super?

It’s safe to say they don’t need that much money to pay for lawn bowls and a schnitzel dinner in retirement.

They are just rolling around in tax breaks to protect a nest egg they plan to hand to their millionaire offspring when they die.

Prime Minister Anthony Albanese. Picture: NCA NewsWire / Martin Ollman

Treasurer Jim Chalmers. Picture: Martin Ollman

And no wonder the one person in Australia in that position might be squealing.

Under the changes the mystery rich lister with $400m in super could be forced to pay $2.5m extra in tax.

So, there’s a strong argument that the super change being proposed should be a no-brainer.

The changes would limit tax breaks on earnings from balances more than $3m.

The rich still get a tax concession, just less for earnings from super nest eggs.

It won’t affect the rest of us.

Clamping down on it will save average earners $2bn in the budget. It will not impact 95 per cent of wage slaves with super. It will just mean there’s more money for Medicare, the NDIS and schools.

The political problem, of course, is that Albanese promised there would be no change to super if elected.

He shouldn’t have said that, but he did. And he’s being rightly called out for a broken promise.

During the election, Chalmers said there would be no “major” changes to super and he insists this is not a major change, albeit a lucrative one for the budget.

Careful words that left him some wriggle room.

So, that’s the first problem. The bigger problem is containing the debate it has unleashed.

During a round of breakfast TV interviews on Wednesday, the Treasurer was put on the spot by Sunrise‘s David Koch over “what was next.”

Jim Chalmers is interviewed by David Koch on Sunrise. Picture: Channel 7

“Can you say yes that you absolutely guarantee no change ever to the capital gains tax exemption on our family home?’’ Koch said.

“I can say to your viewers we have not been focused on it, it is not something we have been contemplating,” Chalmers replied.

“Just say yes,‘’ Koch said.

But Chalmers refused.

“I can’t commit future governments to changes or otherwise,’’ he said.

He was then asked if he could guarantee it “during your reign as Treasurer, you will never change the capital gains tax exemption on the family home.”

“It is not my intention, it is not something I have been thinking about, working up or contemplating. We don’t know what the situation might look like in 10 or 15 years and other governments,’’ Chalmers said.

Less than half an hour later, Albanese headed to the ABC’s Radio National and cleared up the confusion.

“Do you look at those figures and think we need to act on capital gains tax as well?,” RN host Patricia Karvelas asked.

“The Treasurer would not rule out capital gains tax changing on family on the family home said that’s not your intention. Can you rule it out?”

Albanese said he could rule it out.

“Yes,‘’ the Prime Minister said.

“We are not going to impact the family home. Full stop exclamation mark.”

“It’s a bad idea. We will not be making any changes there.”

Albanese said no one in the Labor Party had raised that proposition.

By lunchtime, the Treasurer was rolled out to offer a mea culpa.

Privately, he said he didn’t hear the question. A poor excuse given he was wobbly under questioning from the Today show’s Karl Stefanovic as well.

Chalmers conceded he was trying not to play the “rule-in, rule-out game”, but it backfired.

“I don’t want to get into the practice of coming before you each day and working through hundreds of billions of dollars of tax concessions and playing the same rule-in, rule-out game,’’ he said.

“(But) I should have done that when it came to the family home this morning. And I’m happy to say that.”

Now the genie is out of the bottle he can expect there will be plenty of rule-in and rule-out questions to come.

The upshot was that the Today show’s Lara Vella did more to sell the new policy than the Treasurer.

She filed a cheeky package asking people in Sydney’s Double Bay if they would have to give up their “almond lattes” and “second Mercedes” if they were hit with more tax on super balances.

The package had host Stefanovic in stitches.

But the Treasurer, who will celebrate his 45th birthday on Thursday, probably wasn’t laughing after his bruising morning.

Albanese, born on the same day, is turning 60.

Happy birthday guys. Just make sure you blow out the candles on the capital gains tax cake.

It could start a bushfire.

Originally published as Capital gains tax gaffe makes a new mess for PM to clean up | Samantha Maiden