Greens to push for super tax indexation

Greens leader Larissa Waters is likely to insist Treasurer Jim Chalmers index the threshold for the government’s planned superannuation tax change, as the government attempts to stare down growing criticism of the new source of revenue.

Investors and public policy experts have raised concerns about the government’s plan to double the concessional tax rate from 15 per cent to 30 per cent on earnings above $3 million in superannuation accounts from July 1.

Greens leader Larissa Waters.Credit: Penny Stephens

Many are pressing for the government to ditch the element of the plan to tax unrealised capital gains, while there are growing calls to have the $3 million indexed to inflation or wages growth.

While the Greens lost three of its four seats in the House of Representatives at the May 3 election, the minor party is on track to hold the balance of power in the Senate. That would enable the government to strike a deal with the Greens, bypassing the Coalition – the Liberals and Nationals are both opposed to the changes – or the remaining members of the Senate crossbench.

On Friday, Waters said the Greens party room would discuss the policy and likely advocate a similar position to what it had before the election.

“We’ll have all of those discussions. As you might recall, in the last term of parliament, we were saying we thought that the threshold should be lower because at the moment the government’s proposal only touches, I think, half a per cent of folk,” she told Sky News.

“We thought it should have been a $2 million threshold, which is still only about 1 per cent of people. It’s still a fraction. And it’s folk who are, who are doing quite nicely for themselves.

“But ... we’ll wait to see what the government puts forward, and we will continue those discussions constructively.”

During the election, the Greens pushed for the tax change to kick in at $2 million and to be indexed, which will likely remain their position.

The tax from July 1 is expected to raise $2.7 billion in its first full year of operation, but Australia National University tax expert Bob Breunig told this masthead Chalmers needed to look at simpler ways to target the self-managed superannuation sector.

“I’m not happy about the lack of indexation, even to inflation. It’s going to mean that hundreds of thousands of people are going to get caught up in this relatively quickly. It should be dealt with now,” he said.

Chalmers is yet to talk to the Senate crossbench.

The Treasurer said he would not concede on the Greens’ demand for a $2 million threshold, but left the door open to index the tax.

“[The Greens have] talked about indexation as well,” he told The Conversation.

“We’ll see who we engage with. We’ve got a bit of time. They’ll have a view. They know our policy. But those conversations haven’t begun.”

Chalmers’ office was contacted for comment. Waters’ office was also contacted for comment.

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