Top fund manager Geoff Wilson hits out at ‘appalling’ super deals

Geoff Wilson has accused the federal government of trying to ‘bribe’ Senate crossbenchers to support its tax increases on super by offering last-minute deals.

Fund manager Geoff Wilson. Picture: Nikki Short

Fund manager Geoff Wilson has hit out at the “appalling behaviour” of the federal government in trying to push through tax increases on superannuation funds of more than $3m by offering last-minute deals to crossbench ­senators.

He said the government was trying to “effectively bribe” Senate crossbenchers to support “illogical and grossly unfair legislation”.

“The government is trying to force through this unfair legislation,” he told The Australian.

“They are playing politics with people’s lives and livelihoods.”

Mr Wilson was commenting on reports that the government was trying to link passage of the super fund tax bill in the Senate to legislation to remove surcharges on debit cards and reduce surcharges on credit cards.

The proposed legislation would see an extra 15 per cent tax imposed on any increase in the value of super funds over $3m, regardless of whether the fund had generated earnings or not.

The legislation, which is set to come into force on July 1 this year, could hit farmers, small businesses and others who have bought property through their super funds the hardest.

The bill, which has been passed by the House of Representatives, needs the support of the Greens and three independent senators to pass.

The federal government is estimating the measure could raise more than $2bn a year once it is fully operational.

Mr Wilson, who spearheaded a campaign in 2019 against the Labor Party’s proposed cutbacks on franking credits, said there would be a “significant revolt” against the legislation if the broader community understood its implications.

“It is incredibly disappointing,” he said. “It is flawed legislation.

“Why is the Treasurer so desperate to pass this flawed legislation, which, if the electorate was aware of it, would vote him out?”

He said the original intention of the legislation was just to increase the tax on the earnings of super funds above $3m, but he said the government opted for the tax on unrealised gains as the big super funds could not handle the original proposal.

Self Managed Super Fund Association chief executive Peter Burgess warned on Tuesday that the federal government could look at new deals for crossbenchers to get its proposed tax through the Senate.

He said the bill was now scheduled to be debated in the Senate on Thursday.

“The government does seem to be determined to get this bill through, so they may well try some other deals with the Senate crossbench,” he said. “We have to wait and see how it plays out.”

He said he believed the government did not currently have the numbers to get the bill through the Senate but could not rule out new proposals being put to key senators.

“We are hoping that common sense prevails,” he said.

He said there had been a lack of consultation with the super fund industry on the bill.

“There are so many issues with this bill,” he said.

“There are so many unintended consequences.

“It doesn’t need to be this way. There are other ways the government can solve the problem they are trying to solve without imposing such a heavy burden on small businesses and farmers.

“It will have a very damaging impact on some sections of the economy.”

He said it had been a “pretty dramatic day” in Canberra on Tuesday as rumours of the proposed deal spread.

John Abernethy, the founder and chair of Clime Investment Management, called on Anthony Albanese to disclose the value of his super benefits under the parliamentary pension scheme and how they might be affected by the legislation.

“Simple question to the PM: if you lose the next election and retire from politics, then what will be your retirement benefits both under the defined benefit scheme and the post (super tax legislation) defined benefit scheme?” he said.

He said the government needed to detail how the proposed tax regime would affect defined benefit super schemes, particularly those made available to longstanding federal parliamentarians such as the Prime Minister.

“What is the value of these schemes and how will they be taxed each year on unrealised gains assessed over $3m defined benefit value?”

“How can politicians justify being involved in a debate on superannuation policy if they have or are perceived to have a conflict in dealing with their own benefits as opposed to those of the public?”

Mr Abernethy said the legislation imposition of an “unrealised capital gains” tax would be a “significant change” to Australia’s tax regime.

“Whilst it is set up, at this instance, to hit large superannuation accounts, it will clearly create a precedent that has not been debated through a bipartisan committee that investigates the full ramifications,” he said.

“If an unrealised capital gains tax is levied on large super accounts, it will become a precedent for an unrealised tax on home ownership, given they are both planks to the retirement policy of Australia.”

Originally published as Top fund manager Geoff Wilson hits out at ‘appalling’ super deals