Chalmers’ one economist ‘supporting’ super tax not a fan

A well-known economist whom Jim Chalmers said ‘wrote something supporting’ the proposed super tax hike says he is not a major proponent of the policy.

Treasurer Jim Chalmers on Friday. ‘As always, when you’re making a change like this, there’s always a range of views.’ Picture David Clark

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The independent economist Jim Chalmers cited as “supporting” the government’s proposed high-value superannuation tax hike says he is not a major proponent of the policy but has begrudgingly accepted it because the government does not have a better plan.

The Treasurer is facing mounting pressure over Labor’s plan to tax unrealised capital gains in its tax hike for superannuation accounts worth over $3m, and on Friday said “there’s not a unanimous view amongst economists” that it would chill investment “or about the worthiness of the change that we’re proposing”.

“I think Chris Richardson, for example, wrote something supporting it. As always, when you’re making a change like this, there’s always a range of views.”

But Mr Richardson on Friday was far more cautious. “If I have the choice between no sticky tape and flawed sticky tape, I’ll take the flawed sticky tape,” he said.

Mr Richardson said he was hopeful the government would not use the unrealised gains tax on wealthy accounts as a Trojan horse for widening the tax.

Dr Chalmers also cast aside criticism from nation’s largest retailer Gerry Harvey about the policy, saying Mr Harvey was a “relatively frequent critic of Labor governments”.

Mr Harvey had said the unrealised capital gains tax on super funds worth more than $3m was “stupidity of the highest order” driven by a government “desperate for revenue”. “I don’t get too carried away by it, nor do I dismiss it,” the Treasurer said on Friday.

Dr Chalmers more broadly appeared to cast recent criticism as being partisan and said the increased tax revenue would allow better funding of government programs.

“I understand that when you’re making a change, even a modest one like this one, people have views about it,” he said. “And people with very large superannuation balances will have views about it.

“Our political opponents will have views about it as well. This is a modest change. It helps make the budget more sustainable and fund our priorities.”

When the Treasurer was asked on Friday how much the Prime Minister’s pension would be taxed in the first year of the unrealised capital gains tax the Treasurer said he did not know.

“When it comes to the Prime Minister, his pension is not yet known,” Dr Chalmers said.

He also again defended the fact the $3m value was not indexed, saying it was “consistent with the treatment in a whole range of areas in the tax system”.

He accused opponents of the plan of having run a “campaign” against it. “We’ve been consulting on it,” he said. “It’s a modest change. It still leaves concessional tax arrangements in there for people who have more than $3m in superannuation. And so I expect that there’s a campaign run about it. I expect that people have got views about it, but I do think we need a bit of perspective here. It is a modest change.”