Jim Chalmers’ tax kite may prove a costly, ill-judged distraction

Treasurer Jim Chalmers. Picture: NCA NewsWire / Martin Ollman

The federal Treasury has never seen anything it hasn’t wanted to tax or tax more. Superannuation is chief among them.

Yet why Jim Chalmers would want to fly a pre-budget tax kite on super in the middle of a cost-of-living crisis is a mystery even to some colleagues.

If there is one issue sure to drive a large proportion of the working population nuts, it is a new government wanting to tinker with super.

Every government is guilty of it, either Labor, which thinks it owns it, and the Liberal Party, which is compelled to hate it … both sides are almost always driven by ideological distraction.

If talkback radio in the past 48 hours is anything to go by, the issue has already gone sideways for the Treasurer since he floated his plans on Monday for more taxes on super and what appears to be a soft-power push to tap the retirement savings of millions of Australians to help fund the government’s pet projects.

Already there would appear to be an adverse reaction to Chalmers’ proposal to enshrine a purpose for super in legislation. This sort of agitation from the Treasurer, in this economic environment, is political madness.

There may well be an argument for tightening exemptions, but people generally don’t trust governments, any government, with super.

All people will hear is “tax” and “super” in the same sentence and be immediately repelled.

Labor appears to have ingrained in its psyche that because super was Paul Keating’s creation, it somehow belongs to the party.

This undermines the principle that super belongs to those who earn it, and is not an untapped tax resource or investment vehicle for governments.

For the Albanese government, this may well end up being a politically costly and ill-judged pursuit at a time when most people expect the government to have its eye singularly focused on interest rates and cost of living crisis.