Super tax to ‘destroy’ Labor’s run-up to 2028 federal election: critics

Assessments for Labor’s unrealised capital gains tax are likely to hit more than 80,000 people just in time for the next federal election, encouraging opponents to start campaigns against it now.

Treasurer Jim Chalmers. Picture: Tertius Pickard

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Assessments for Labor’s unrealised capital gains tax are likely to hit more than 80,000 people just in time for the next federal election, encouraging opponents of the new tax to invest in campaigns against it starting next week and lasting all the way through to 2028.

With the help of a depleted Greens party, Jim Chalmers is anticipating the new unrealised gains tax would apply from July 1 this year. A full financial year would then be measured and valuations conducted from July 1, 2026. Superannuation funds would then have up to nine months to lodge a return.

The Australian Taxation Office would then need time to calculate which funds are subject to the tax and time would need to be given for any challenges on valuations, leaving final assessment notices to be given in late 2027, just months out from the latest date the next federal election would be called.

Self Managed Superannuation Fund Association chief executive Peter Burgess said the timing couldn’t be worse for a government plagued by critics of the tax, and Labor politicians in marginal seats might find themselves presented with dozens of complaints and fears of the tax expanding to other incomes, structures and assets.

“The first assessments are not likely to be issued until late 2027, which is so close to when the next election has to be called. So, the taxation of unrealised capital gains, and taxpayers having to sell assets to pay their tax bill, will flare up again up right before the next election,” he said.

Labor wants to tax people on gains they make on any assets held in their superannuation accounts, starting with those with a balance of $3m or more, without any ­indexation.

Wilson Asset Management chairman Geoff Wilson. Picture: Nikki Short

Wilson Asset Management chairman Geoff Wilson, who took on Labor’s franking credits policy in the 2019 election lost by Labor’s then leader Bill Shorten, said the tax schedule and the timing of assessments created dangers for Labor politically.

“The expected timing of the actual tax payments for unrealised gains will destroy Labor’s run-up to the 2028 election,” Mr Wilson said.

“This is bad policy with major negative consequences for all Australians.”

Superannuants such as Miles Hampton, the former chairman of Forestry Tasmania and MyState bank, and other current and former business leaders have raised serious concerns with Labor’s proposed tax because people who had lost value on an asset and were trying to recover the losses would be taxed on the recovery after the tax started on July 1.