Super tax shows basic misunderstanding of economics

The proposed higher rate of tax for unrealised capital gains on super funds displays an alarming lack of understanding of basic economics and markets (“Unfair tax shows a darker side of Labor’s big agenda”, 23/5).

Many asset classes held in self-managed super funds are incapable of accurate valuation until placed on the market for sale – notably property, shares and businesses. It is only when an asset is put on the open market for sale and a price agreed between a willing buyer and a willing seller that the market value will be established. Until then, it is only guesswork. I might imagine that my property is worth $3m, but until a buyer is prepared to pay that price, then the value has not been established. On top of this, are holders of SMSFs going to be required to have the assets in their funds valued every year? How will their tax liability be established? It is beyond belief the country is being run by a government that does not understand these basic concepts.

Mary Hackshaw, Northwood, Vic

Congratulations on the editorial on the “unfair tax”. It speaks to and for all Australians, especially the penultimate paragraph that correctly asserts the threat of misguided tax policy is cultural as well as financial. It risks destroying the Australian ethic of giving it a go.

Ian Dunlop, Hawks Nest, NSW

It was interesting, informative and enlightening to read the thoughts that some of Australia’s foremost financially qualified individuals have towards Jim Chalmers’ tax on unrealised gains (“Super tax’s hit to green energy shift”, 23/5).

The Treasurer would be flat out to identify anyone with a financial background who believes this is a good idea. These people need to be listened to and taken notice of for the sake of Australia’s future welfare in almost every aspect of life. The problem Chalmers has is that this tax idea forms a huge part of the party’s political ideology. We are already a long way down the road towards a socialist state and it is becoming more and more difficult to be aspirational in terms of small to medium-sized businesses. It would seem that an Albanese government believes that aspiration is a bad idea and that living off the government is a good idea. In terms of securing votes, the current government is heading in the right direction, but sooner or later the financial pigeons are going to come home to roost.

Peter D. Surkitt, Sandringham, Vic

Consensus outside the Labor Party is that its super tax is at least inappropriate.

It may even be counter-productive for some purposes, such as capital investment, including in renewables. But opponents should keep in mind the urgent needs of Australia, including for health, education and defence, plus the growing cost of floods and bushfires. What are their suggestions for budget savings or alternative tax changes?

John Hughes, Mentone, Vic

Where were all of these “experts” now complaining about the proposed tax before the election?

Given the size of the ALP landslide, it is probably fair to say the horse has already bolted. The policy was well-known for a long time. It was a seriously missed opportunity for the Liberals, who may not have read Robert Gottlieb­sen and various other commentators in The Australian. They had been very vocal about and critical of the policy for a long time before the election.

Patrick Boyce, Kearneys Spring, Qld

As Henry Ergas tells us (“Super tax rationale is confused, convoluted”, 23/5), taxing gains that haven’t been realised and may never be realised is wrong in principle. So wrong that an undergraduate studying economics, accounting or tax law and practice who put it forward in an essay would score an F for fail.

Graeme Loughton, Indooroopilly, Qld

So the new super tax will not hit senior politicians such as Anthony Albanese or Wayne Swan.

The government will pay the tax for them and their pensions will be unchanged. The big union funds will spread the unrealised capital gains across all members to dilute the tax to a low level for high net worth individuals. The tax scores a direct hit on SMSFs. If the government wants more tax from super it should spread the tax across the various types of funds and not just target SMSFs.

Alan Woodward, South Melbourne, Vic