Taxing unrealised gains in super sets a dangerous precedent

Matthew Cranston spotlights a policy that has bafflingly evaded serious scrutiny (“Labor’s ‘hidden trap’: Jim Chalmers seeks unrealised political gains”, 15/5). Suddenly every headline screams about Labor’s “unrealised gains” super tax, as though it dropped from the sky this week. Spoiler: the draft legislation has been on Treasury’s website for more than a year. Why does it feel like brand-new news?

Division 296 will slap an extra 15 per cent on annual paper revaluations of super balances above $3m while disallowing losses incurred before July 1. Imagine buying an asset for $5m, watching it sink to $3m, then recover to $4m after the start date. You are still $1m underwater, yet you will be taxed on a “gain” that exists only on paper. That flouts the realisation principle that underpins our capital gains system and basic accounting.

Especially troubling is the pre-election crickets. Beyond a handful of specialist news outlets, many treated the measure as a niche hit on “the rich”. Industry bodies and big advisory firms – who benefit when rules become labyrinthine – muttered polite objections but mounted no public scare campaign. Voters never received the rigorous debate they deserved.

The elephant in the room is precedent. Once parliament normalises taxing unrealised gains inside super, what prevents a future government applying the same logic to investment properties or ordinary share portfolios? A principle abandoned today becomes tomorrow’s revenue target. Australians needed a loud, fact-based contest of ideas before polling day – not a post-election discovery lesson.

Tim Taylor, Melbourne, Vic

Ley’s moment

Sussan Ley is undoubtedly receiving advice from all quarters on how to restore the Liberal Party to electoral relevance.

Can I suggest that the quickest way for Ley to see through the noise is to just study the Tony Abbott playbook from 2010-13?

During this period in opposition Abbott understood that the most effective way to get the electorate’s attention was to focus on a small number of issues, keep the message simple and execute the message relentlessly.

We know over the next three years of this Labor government energy costs will rise, housing affordability will get out of the reach of more and more Australians, what’s left of Australian manufacturing will shrink further, our national debt will grow to $1.3 trillion and the environmental destruction from solar and wind farms will reach despairing levels.

As a consequence, the issues that could be prosecuted by the Coalition are being presented gift-wrapped. All it needs to do is keep the message simple, stay focused and prosecute with conviction. Abbott used this strategy to lead the Coalition to a resounding victory in 2013 and using the same strategy the same can easily be repeated by Ley in 2028.

Howard Dawson, Millendon, WA

The nation and the Liberal Party may well be surprised in the capabilities and performance of its new leader, Sussan Ley.

As someone who was involved first-hand in the political and agricultural end of water reform and the operations of the Murray-Darling Basin Plan, my “misogynist-lite” was extinguished by Ley’s deep and practical knowledge of what is an extremely complex and highly charged issue. She’s no pushover.

I am sure that as Leader of the Opposition and perhaps first Liberal female PM, Ley will take considerable steps to ensure the voters of Farrer receive above average representation.

I did not vote for Peter Dutton but I suspect my allegiance to the Coalition will return as long as Ley is not seduced by extremist elements.

Pete Smith, Beaumaris, Vic

Truth about Jakarta

An interesting article by Jennifer Westacott (“To succeed, we must have strong ties to Indonesia”, 15/5). How many times have we heard that over the last 50 years, and little has changed, two-way trade is abysmally poor?

From an Indonesian perspective, the country has developed enormously and perhaps getting in on the ground floor is long gone. Australia, too, has changed and while some sectors have had spectacular growth, manufacturing has shrunk beyond recognition, leaving little to offer beyond resources, agriculture and services.

At the very same time competition for a seat at the table has grown substantially, with China in particular eyeing Indonesia as a strong trade opportunity. An example of which is losing our nickel industry to a China/Indonesia monster with little concern for health and safety.

The Albanese visit is critical, particularly from a defence viewpoint, but let’s not think government can provide all the answers when it comes to trade, because it’s business that does the hard yards to develop commercial enterprise and, believe me, the regulatory system, nepotism and the sheer complexity of doing profitable business in Indonesia is not at all easy. Nickel is but one example.

Ian C. Murray, Cremorne Pt, NSW