Jim Chalmers still ‘admires’ Paul Keating but disagrees on super tax

Jim Chalmers says it is possible to ‘admire’ predecessor Paul Keating while disagreeing with him on Labor’s plan to raise tax on superannuation balances over $3m.

Former prime minister and treasurer Paul Keating. Picture: Liam Kidston

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Jim Chalmers says it is possible to “admire” Paul Keating while disagreeing with him on Labor’s plan to raise tax on superannuation balances over $3m, declaring he values his relationship with the former prime minister.

The Treasurer said he spoke “from time to time” with Mr Keating – who implemented the mandatory retirement scheme as prime minister – on the plan to tax unrealised capital gains, but he held a different view to his mentor on the policy.

During parliamentary question time on Thursday, opposition treasury spokesman Ted O’Brien challenged Dr Chalmers on whether he believed Mr Keating had been wrong when he criticised the super tax over fears it would capture future generations of workers.

Dr Chalmers responded that it was on the public record that he valued his relationship with Mr Keating – who was the subject of his PhD – and he would “continue to admire” the outspoken Labor luminary.

“It is possible to admire Paul Keating and respect him and to ­occasionally have a different view to Paul Keating,” Dr Chalmers said. “And this is what has happened on this occasion, and I have said that publicly on a number of occasions.

“No disrespect to Paul when I say it, we speak about this matter from time to time and we speak about a whole range of matters from time to time and I value the engagement.”

Treasurer Jim Chalmers in question time in parliament this week. Picture: NewsWire / Martin Ollman

When employer contributions increased to 12 per cent on July 1, Mr Keating raised concerns the super tax would affect young workers entering the job market who were on track to accumulate $3m by their retirement. Mr Keating reportedly told super funds Labor’s refusal to index the scheme was “unconscionable”.

Labor has defended the tax on the grounds it would affect only 0.05 per cent of Australians, and would make the tax system more sustainable.

The policy was estimated to reap $40bn in tax revenue over the next decade.

An alternative model that taxes super balances at a flat rate of 20 per cent and a 5 per cent rebate for savings under $3m has been floated as an alternative that avoids taxing unrealised capital gains.

Dr Chalmers accused the Coalition of being willing to “go to the wall” for wealthy Australians who already have $3m in retirement savings, while Labor had promised tax cuts to workers.

“There is a difference here, between this side of the house and on that side of the house they want to jack up taxes on every single Australian taxpaying worker, but they will go to the wall for some of whom have hundreds of million dollars already in superannuation,” he said.

“What that tells us is they have not listened, they have not learned and they have not changed.

“They were not listening to what the Australian people told them on the May 3 (election).”

Dr Chalmers said it had been one of the “great public policy triumphs of this country” when employer super contributions had been lifted to 12 per cent this year.