ALP MP Matt Greg: unrealised gains tax ‘not ours’

A former Labor vice-president and trade union leader Michael Easson has cut down the Albanese government’s plan for a tax on unrealised gains just as newly elected Labor MP Matt Gregg told voters the party has already dropped it.

Anthony Albanese with incoming Deakin Labor MP Matt Gregg. Picture: Jason Edwards / NewsWire

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Former Labor vice-president and trade union leader Michael Easson has cut down the Albanese government’s plan for a tax on ­unrealised gains, as newly elected “giant killer” Labor MP Matt Gregg was caught misleading ­voters days before the election by suggesting the ALP had already scrapped the tax.

Labor is seeking to introduce a tax on unrealised capital gains ­beginning with superannuation funds worth more than $3m, ­without indexation, booking ­almost $40bn in revenue over the decade.

But Mr Gregg, who knocked out senior Liberal frontbencher Michael Sukkar in a big-spending campaign in the eastern ­Melbourne seat of Deakin, has been caught in an audio recording telling voters five days before the election that he had been ­informed by the Labor leadership that the tax policy would no longer proceed.

Prominent business leaders are nervous that a majority Labor ­government would now try to ram through a deal in the Senate with a depleted Greens party and are worried the tax could spread to other structures and income ­levels.

Mr Easson – a former Labor Council of NSW secretary and State Super director who is now chairman of sustainable property company EG – told The Australian that it would be wrong for the Albanese government to proceed with the tax.

“I think it’s a mistake, especially with the volatility of the sharemarket,” Mr Easson said.

“I realise (the commonwealth) have revenue shortfalls but I have had just too many people talking about the unintended ­consequences.”

Michael Easson. Picture: John Feder

Treasurer Jim Chalmers. Picture: NewsWire / Glenn Campbell

Mr Easson, who was also ­previously the independent ­chairman of the Association of Superannuation Funds of ­Australia, said he thought the commonwealth Treasury was partly responsible for pushing the policy under which unrealised capital gains would be taxed at 30 per cent with no reimbursement if the asset depreciated.

“The tax has been pushed by Treasury throughout the last 15 years,” he said.

In a sign of Labor’s mixed ­signals around the tax, the newly elected Mr Gregg told a “meet the candidates night” hosted by the Park Orchards Ratepayers Association just days before the election that “the briefing I’ve received is that that is not Labor policy”.

“I was advised it is not Labor policy,” Mr Gregg said, repeating the line several times.

“I’m not going to commit to that policy position that has been put to me because my understanding is it’s not my party’s ­policy. I think there is a bit of a mess particularly with self-­managed super.”

Without indexation the new tax could eventually impact 1.8 million Australians and bring in almost $40bn in the next 10 years. The annual tax take would start at $300m and rise to almost $7bn per year.

Mr Gregg attempted to play down the fact that the revenue from the tax had been baked into the budget.

“The budget line that has been quoted in that argument is more general in its wording than to say it is the implementation of that specific policy,” the Deakin candidate told ­voters.

“I’ve been told, and I accept, that that is no longer the policy being brought by Labor in this election.”

Mr Gregg also said he had his own misgivings about the tax.

“I have my own concerns that I would raise in that context around liquid assets,” he said.

In a speech at the National Press Club before the election, Anthony ­Albanese declared he was not for turning on the tax policy.

The Prime Minister’s office on Thursday declined to ­comment after The Australian asked about Labor’s position on the tax policy, who advised Mr Gregg that the super tax measure was no longer Labor policy and whether the government was considering any tweaks to its policy including removing taxation on unrealised gains, changing the $3m cap or applying indexation.

The Liberal Party has also been criticised by prominent ­donors for not prosecuting Labor’s tax policy thoroughly, with one aggrieved Liberal claiming opposition Treasury spokesman Angus Taylor mentioned the policy only five times during the election campaign.

Australian superannuation industry experts expect $25bn in funds would be pulled from super funds by those who are ­allowed to withdraw and who want to avoid the tax.

Such a withdrawal would be catastrophic for Australian start-ups who rely on the funds to build their business, but cannot get loans from banks.

Some Labor donors such as David Hancock, who has given to Labor MP Andrew Charlton, said the government’s policy would have been a “death knell” for investment in AfterPay – the country’s biggest company sale in history and in which he was a primary investor.

Liberal donors such as ­stockbroker Angus Aitken have said the Liberal Party had failed to attack Labor on what was a flawed tax policy.

Mr Gregg’s victory over Mr Sukkar was one of 12 Labor secured in Liberal seats last Saturday to ensure the Albanese government was returned with a majority.