Tax on unrealised gains in superannuation an aspirational blow to hard working Australians

The lower interest rate environment will of course see cheers of relief in the battered mortgage community. But it comes at a time when vast sections of the wider community are being drained of aspiration.

On the brighter horizon is the potential of artificial intelligence and government stimulus both of which open vistas for some.

But, for larger other sections of the community, an unprecedented series of targeted government blows will significantly lower aspirations.

Compounding those direct blows is a feeling of hopelessness given the state of the political community. Both the ALP and the Liberals are dominated by the political class and have become remote from what is actually taking place in the community.

By contrast the Nationals understand their community.

If the new Liberal leader Sussan Ley is to be a credible opposition leader she will need to develop policies that address the aspirations of her community. That is not easy when you are surrounded by the political class whose main aspiration is the gaining of power.

The aspirations of the community voters are a side issue. She has to start again and attract new backroom people. But, her task is made easier because, like the Liberals, the ALP also do not understand the aspirations of the community. There is a vacuum to be filled.

On the government side the most obvious aspiration killer is the infamous Chalmers’ tax on unrealised capital gains.

Treasurer Jim Chalmers keeps saying it will only impact a few rich people and while that is statistically correct (as of May 2025) it is complete rubbish.

People aspiring to do well in their job and increase their remuneration now know that superannuation simply won’t work for them. It is these rising people that drive community prosperity. Already with no indexation on income tax they are being driven into higher tax brackets.

Young Australians want to use new technologies to develop new products and services. It takes money, and right now most of that money comes from self-managed superannuation funds or private wealth.

The large industry and retail superannuation funds do not support this area in any significant way. Accordingly, the aspiration of our talented young people is chopped off by the Chalmers’ tax.

Sadly, the current Treasurer doesn’t have the talents of past greats like Keating and Costello who knew when to listen to treasury advice and when to reject it.

Treasury has designed this tax so it can be easily adapted to the wider community because it is paid by individuals, not by the fund itself.

Individuals can withdraw money from their fund to meet the liability created by the fund.

The market capitalisation of the Australian Stock Exchange is dominated by the large corporations who are funded by the large industry and retail superannuation funds.

But, about 60 per cent of the actual companies on the ASX obtain their equity from self-managed superannuation funds and individuals. The Chalmers’ tax cuts off funds from these up and coming listed enterprises and greatly damages the fabric of our stockmarket.

And then we have farmers and many family enterprises where their superannuation fund owns the freehold. That creates a complete nightmare. It looks like treasury wants to drive them out of business — and Chalmers is going along with it.

But the horror of the Chalmers’ tax merely compounds the other carefully targeted attacks on business community aspirations.

In the industrial relations legislation, family businesses which employ more than 15 people will almost certainly have a union representative who must be sent to the local Trades Hall to learn how to disrupt the family business and be involved in the control of that business.

Those with less than 15 may still have a union representative but the person does not have to be sent to the Trades Hall for training.

Wisely, the unions waited until after the election before using their powers. But the aspirational attacks keep coming.

In family business the owners risk everything to achieve aspirations and the government plan to enable a person earning below $175,000 to destroy a family enterprise is horrific.

The government plans to hit medium-sized businesses by giving employees paid less than $175,000 the right to poach customers and staff. They are also looking to raise the $175,000 limit.

The ACTU’s proposed $1.8bn long-service leave fund will mean super long service leave entitlements will need to be paid in cash as they are accrued. This means vast areas of businesses will be starved of cash.

Meanwhile, the government’s badly planned renewables investment is destined to increase the cost of power.

And in the large business community the unions are planning a major assault on key industries because they have synchronised the maturity of enterprise bargains in 2026.

Each of the above measures has been planned in isolation but they come together to create a combined aspirational impact. We live in a democracy and when a government attacks vast areas of the community so brutally, elections should provide a solution.

This time the Liberal Party didn’t tackle any of the issues and the supposed party of aspiration wandered off into irrelevancies, almost trying to match the government in spending

The good work it did on housing and defence was not announced until the election was over and people had started to vote.

In some ways the failure of the opposition to fight the election on aspirations is as big a blow to aspiration as the government’s actions.