Anthony Albanese is ready to use his super tax as the first test of Sussan Ley’s pledge to lead a more collaborative Coalition that doesn’t say no to everything and puts the interests of Australians first.
Seeking to stamp his legacy as a long-term and centrist prime minister, Albanese understands the electoral value of the major parties working together to pass enduring reforms that drive economic growth, budget stability and productivity.
The Prime Minister on Tuesday showed off his pragmatic side in leaving the door open for an unlikely partnership with the Coalition on Labor’s controversial proposal to slug Australians with super balances above $3m, without indexation, and introduce a tax on unrealised capital gains.
The burning question is how much Labor would be willing to concede to secure a more palatable, long-lasting revenue measure that supports structural savings without dividing the community.
After claiming a thumping election victory delivering Labor a historic 94 seats in the House of Representatives and bigger representation in the Senate, Albanese now has two clear options in the Coalition and Greens to pass legislation through the upper house.
The Coalition’s super tax “red lines” have been made clear: Jim Chalmers must drop the idea of taxing unrealised capital gains and apply indexation to the proposed rate of tax. It also wants clarity around application to Australians with defined benefit schemes, which includes Albanese.
As Chalmers struggles to sell the policy he announced in February 2023, Albanese has stepped in as the deal-maker amid internal ALP rumblings that Chalmers should compromise.
For some Liberal and Nationals MPs, endorsing a tax on super is a bridge too far, despite the Coalition needing to identify more revenue streams to fund their big-ticket policies, including lifting defence spending to 3 per cent of GDP.
Given the venom of Coalition MPs towards the super tax, it would take a complete overhaul of Labor’s policy to have any chance of securing bipartisan support. Few in conservative ranks believe Labor would be willing to go far enough.
Coalition insiders say a more realistic deal between the major parties could be on Nature Positive environmental reforms amid furious industry lobbying for the Coalition to negotiate better outcomes with Labor and freeze out the Greens.
Ley, who wants more maturity in Coalition ranks when it comes to considering propositions put forward by the government, rejects the idea of being an “opposition for opposition’s sake” and is determined to shed Peter Dutton’s “all-out attack dog” approach.
That doesn’t mean blindly supporting Labor policy, but if a policy is deemed to align with Liberal values and mainstream Australia, Ley will engage with Albanese.
Ley’s Coalition will apply a filter to all legislation, constructed around forging a conservative pathway back to government.
Albanese, the wily veteran who “likes fighting Tories” and understands better than most MPs how to wedge opponents, will deal with the Coalition on his own terms and will expose any cracks in the fragile Liberal and Nationals partyrooms.
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