Leaders in a tangle as they fly the kite on superannuation tax changes

Voters know when politicians are not being straight with them. And they know when politicians are softening them up for some financial pain.

So the reaction to Anthony Albanese and Jim Chalmers will sink rapidly from scepticism to suspicion unless the prime minister and treasurer find a better way to explain their plans for tax breaks on superannuation.

Prime Minister Anthony Albanese and Treasurer Jim Chalmers sent conflicting signals regarding superannuation on Sunday.Credit: Alex Ellinghausen

The two leaders sent conflicting signals on Sunday: Chalmers named a change to tax on funds with more than $3 million as a “good example” of a debate worth having; Albanese stepped back by saying it was a “hypothetical” change.

Yes, they are flying a kite to test the reaction. And they are expecting the media to do their work for them by outlining all the inequities and structural flaws – and there are plenty of them – in the way super is taxed. But they seem at odds over how to fly the kite. To labour the metaphor, they are flying it into a storm with a fraying piece of string.

Albanese faced a sharp question on the Ten Network’s The Project on Sunday night that revealed a key weakness in his position.

“Why would you be talking about doing this when you promised before the election that you wouldn’t touch super?” Hamish Macdonald asked.

“We promised no big changes and there won’t be major changes to super,” Albanese replied. But that was not the point – because that was not his promise.

The host cut to a video of Albanese on May 2 last year, three weeks before the election. “We’ve said we have no intention of making any super changes,” Albanese said that day.

Macdonald: “That’s not just big changes, not just major changes – you said there won’t be any changes.”

Albanese: “No, I said we had no intention.”

His reaction was to quibble over the wording because, from a politician’s point of view, having “no intention” of doing something is so utterly different from promising not to do it. But voters do not play semantic games. They do not much like them, either.

The glaring policy problem, meanwhile, just keeps growing. The tax concessions on superannuation are very generous and deliver the greatest benefit to people with the biggest funds. Just like someone with a low super balance, someone with $3 million in retirement savings will pay only 15 per cent tax on the earnings in that fund, so there is logic to increasing the tax rate on the big funds to improve the equity in the system.

This means the government is right to consider the changes. Right now, however, nobody can be sure whether Labor is serious about change. The entire debate may be a mere repeat of the brief kite-flying about the stage three personal income tax cuts last October, when Chalmers questioned their cost and Albanese retreated when he was reminded of his election pledge to keep them in place.

No wonder voter support for the stage three tax cuts has jumped around wildly in the Resolve Political Monitor – yes, like a kite in a storm. Without a convincing and consistent message from the top, voters have nothing solid to consider. Voters who want Albanese to succeed will go hot and cold on ideas with every change in his message.

The division among crossbench MPs and senators highlights this broader confusion. The independents in the lower house cannot block change but they influence debate, so their voices matter. Rebekha Sharkie agrees on the case for change but wants detail; Zoe Daniel is worried about a retrospective tax change but wants detail; Monique Ryan is open to the argument but, yes, wants detail.

(Labor’s political future lies in helping the “teal” independents hold their relatively wealthy seats so they can shut the Liberals out of government, which means there is no incentive for Albanese to turn this into a wedge for anyone other than Opposition Leader Peter Dutton).

The next step in the argument will be the release of updated tax expenditure figures this week to reveal the latest cost to taxpayers from the generous treatment of super. It would have been wiser to release these facts last week. The government has moved too quickly to focus on the solution without doing more work to explain the underlying problem.

Voters know when politicians are not being straight with them. Albanese and Chalmers will have to decide whether to commit to change and tough out the questions about a broken promise. Right now, they look utterly unsure about what to do while the kite flaps madly above them.

Cut through the noise of federal politics with news, views and expert analysis from Jacqueline Maley. Subscribers can sign up to our weekly Inside Politics newsletter here.