Election 2025: Former US senator Joe Manchin labels Labor’s unrealised capital gains tax plan ‘stupid’

Labor’s unrealised capital gains tax plan has been labelled ‘stupid’ by former US senator Joe Manchin.

Former West Virginia senator Joe Manchin. Picture: AFP

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“Stupid.” That’s the view on Labor’s unrealised capital gains tax plan from former US president Joe Biden’s long-term congressional powerbroker Joe Manchin.

The Biden administration tried to implement a 25 per cent unrealised capital gains tax in 2024 but did not get the chance to legislate it.

Anthony Albanese wants to introduce a 30 per cent unrealised capital gains tax on superannuation funds of $3m without indexation, but some business leaders are nervous such a tax could spread to other wealth brackets and structures.

“I’m sure some people changed their vote because of it but I don’t believe it would have changed the outcome of the election,” said Mr Manchin, a controversial long-term Democrat senator. “It was a very bad idea here. It made no sense to tax someone on gains they never realised.”

His view on the Albanese government’s push for it if Labor win Saturday’s federal election was more direct. “Stupid.”

Internationally the reaction to the unrealised gain tax on superannuation accounts coming to Australia has been one of surprise and concern.

Steve Torso, who founded Wholesale Investor which is setting up a fund to invest in 50 Australian start-ups, said he had been travelling in Europe and the issue had been raised.

“I am currently in London and I was telling the fund managers and investors at our conference about these plans,” he said. “All commented about how bad this would be for venture capital, innovation and private markets.”

On Tuesday, Finance Minister Katy Gallagher played down the significance of the planned tax.

“It’s a modest change that will raise important revenue for the budget that we can then use to invest in services,” she said.

“I think it’s a very modest change and it still provides a very concessionary tax arrangement for those with high-balance super accounts.”

The Labor government included in this year’s budget an estimate that the revenue from such a tax would bring in $2.3bn in its first full year.

The independent Parliamentary Budget Office released figures this week showing the tax, which is not indexed, would hit almost $7bn a year within 10 years.

All up, taxpayers will be hit with a $5.5bn bill over the forward estimates and almost $40bn over the medium term.

Mr Albanese confirmed over the weekend that he would press ahead with the tax if he won government and would not lower the threshold value of the superannuation account to $2m as required by the Greens to support the government’s legislation.

Opposition Treasury spokesman Angus Taylor continued his line of attack on Tuesday, saying the tax would be “diabolical”.

“Only Labor could dream this stuff up,” he said.

“We’ve been absolutely opposed to it from day one.”