Jim Chalmers rules out bowing down on taxing unrealised gains, says Labor’s super tax will ‘proceed’ as is

The Treasurer said Labor will not bow down to a Coalition demand, stating Labor’s plan to double taxes on super accounts over $3m will “proceed” as is.

Jim Chalmers has ruled out conceding on a key demand made by the Coalition to scrap unrealised gains on Labor’s controversial plan to double the tax on super balances over $3m.

While the opposition has indicated that it will work with the government to pass the reforms, it has demanded the 30 per cent tax not be applied to unrealised gains like assets or investments.

It’s also called for indexation provisions which would increase the threshold.

However the Treasurer said the tax on unrealised gains was a recommendation from Treasury, and said Labor would “intend to proceed” with the provision.

“We provided years of opportunities for people to suggest different ways to calculate that liability, and nobody has been able to come up with one,” he said on Wednesday.

“It’s been on the books for years now, and it makes a meaningful difference to the budget, and it helps us fund some of our other priorities, it’s all about making sure that the superannuation system is fairer, that it’s more sustainable.”

Jim Chalmers stood by the proposed superannuation tax as fair and modest. Picture: NewsWire/ Martin Ollman

He also doubted the Coalition’s claims that it was open to negotiating with Labor on the tax.

Mr Chalmers referenced comments made by Nationals senator Matt Canavan from Wednesday morning, where he said the unrealised gains on properties held in super accounts were “incredible unfair,” and vowing that “we’ll fight that to the death”.

The Queensland senator said many Australians, including farmers, may be asset rich yet cash poor with no cash flow to pay the annual tax bill.

“There’s no way in hell we’ll support attacks on people that don’t have the means

to pay for it,” he told Nine.

“This so-called tax on unrealised gains is incredibly unfair. We should have a basic principle that we should only tax people where you’ve got some sort of income to be able to pay the tax man.”

In light of Mr Chalmers’ comments, Shadow Treasurer Ted O’Brien called on Labor to dump its “super big and super bad” tax.

“Our approach as a coalition in principle, especially in this term of government, is going to be constructive where we can, but critical where we must and when it comes to Labor’s super tax, there is no reason to be anything but critical,” he said.

“We encourage them to take it off the table. This tax should not proceed, period. It is a big tax, it is a bad tax, and labor should drop it. That is the coalition’s position.”

Nationals senator Matt Canavan says the party will ‘fight to the death’ to oppose the tax. Picture: Dan Peled / NCA NewsWire

However Greens leader Larissa Waters maintained the tax was needed to “raise revenue” for things such as hospitals, schools and clean, cheap renewable energy.

“I think it’s important to remember that nobody watching your show would be impacted by this tax,” she said, who appeared alongside Senator Canavan on Today.

“It would touch only half a per cent of people – we are talking about folk who have an awful lot of money in their super accounts. That is not ordinary people.

“So let’s see what the government comes up with themselves about what the details should be (and) we will have those discussions when the government puts something on the table.”

Senator Waters was swiftly cut off by Senator Canavan, who quipped: “What about the farmers?”

The Greens leader hit back with “I’m sure they’ve probably got better things to do than be sitting around watching telly”.

Greens leader Larissa Waters was questioned about the impact on asset-rich Australias, such as farmers, by Senator Canavan. Picture: Dan Peled / NewsWire

The Greens have already given the policy in-principle support, negating the need for Labor to seek bipartisan support in the Senate.

However, the minor party has argued for the threshold to be lowered to $2m, with indexation requirements that would result in the threshold increasing over time.