Anthony Albanese’s government hints at making you pay even more tax

Anthony Albanese’s government hints at making you pay even more tax ahead of signing up to a $2trillion fund to pay poor countries affected by climate change

Super tax concessions are in the Albanese government’s line of sight as it looks for opportunities to boost revenue and repair the budget bottom line.

Assistant Treasurer Stephen Jones said tax concessions on super funds are costly to government finances and are being used to amass wealth.

‘If the objective of super is to provide a tax-preferred means for estate planning, you could say it is doing its job,’ Mr Jones told the Australian Financial Review’s wealth and super summit.

Concessional taxation of super was introduced to encourage more people to save super rather than rely on the pension.

Super tax concessions are in the Albanese government's line of sight as it looks for opportunities to boost revenue and repair the budget bottom line

Super tax concessions are in the Albanese government’s line of sight as it looks for opportunities to boost revenue and repair the budget bottom line

Under the rules, anybody can pay money into their super fund and it is taxed at 15 per cent, which is much less than the 45 per cent marginal rate high-income earners pay.

Mr Jones said there were 32 self-managed super funds with more than $100 million in assets.

‘I celebrate success, but the concessional taxation of funds like these has a real cost to the budget which needs to considered.’

Grattan Institute research has found the tax benefits of super tax concession are poorly targeted, with around 50 per cent of the tax benefits flowing to the wealthiest 20 per cent of households.

To make the system fairer, some groups have been arguing for a limit – say $5 million – on how much people can save within the super system.

‘The argument goes that you would simply pay income tax at normal rates rather than 15 per cent,’ H&R Block tax expert Mark Chapman explained.

Opposition financial services spokesman Stuart Robert said Australians deserved certainty when it came to superannuation

Opposition financial services spokesman Stuart Robert said Australians deserved certainty when it came to superannuation

On the other hand, he said the constant tinkering with superannuation was unfair.

‘People have been paying into their super for decades under one set of rules, and it’s reasonable to assume those rules will still apply when you get to super age,’ he said.

But with government debt expected to grow, Mr Chapman said a $5 million super cap was reasonable to help repair the budget.

Before embarking on reforms to super tax reforms, Mr Jones said he wanted to consult on a common, agreed objective for super.

‘With an objective that is settled, we can talk sensibly about tax,’ he said.

Opposition financial services spokesman Stuart Robert said Australians deserved certainty when it came to superannuation. 

‘Labor went to the election promising to not touch superannuation, yet since the election all we have seen is how Labor wants to change super, including increasing taxes and reducing transparency on super expenditure,’ he told AAP.

The government was seeking to fill a budget black hole with more taxes, he said.

‘If Labor progresses further than this tax increase kite-flying policy idea, it would be a major broken promise.’

Fury as Anthony Albanese signs Australia up to a $2trillion fund to pay poor countries affected by climate change: ‘Start helping Australian families instead of giving away their money’ 

Anthony Albanese has accused Peter Dutton of ‘dog whistling’ to racist voters by complaining about Australia paying poor countries for climate damage loss.

The opposition leader began Question Time on Monday by asking ‘doesn’t charity begin at home?’ regarding the up to US$2 trillion-a-year international fund.

Australia signed up to the loss and damage climate fund at the COP27 summit in Egypt on Sunday, along with other rich nations.

 The fund will help developing countries deal with the affects of climate change, such as natural disasters and rising sea levels, but details are still to be hammered out.

Anthony Albanese has accused Peter Dutton of 'dog whistling' to racist voters by complaining about Australia paying poor countries for climate damage loss

Anthony Albanese has accused Peter Dutton of ‘dog whistling’ to racist voters by complaining about Australia paying poor countries for climate damage loss

Mr Dutton argued Australian tax dollars should be spent in Australia instead of being used as what was essentially foreign aid.

‘At a time when Labor’s policies are driving up cost-of-living pressures for families, the government has just signed up to funding a $2 trillion loss and damage climate fund which will send money overseas and beyond our region,’ he said.

‘Prime minister, doesn’t charity begin at home? When will you start helping Australian families instead of giving away their money?’

Mr Albanese said the question was offensive and a tactic by the Coalition to ‘dog whistle’ to racist voters.

Opposition Leader Peter Dutton argued Australian tax dollars should be spent in Australia instead of being used as what was essentially foreign aid

Opposition Leader Peter Dutton argued Australian tax dollars should be spent in Australia instead of being used as what was essentially foreign aid

'The only people who are pleased about that question are the people sitting in the corner up there,' Mr Albanese said, pointing at the teal independents who took safe Liberal seats by advocating progressive social policy and climate change action

‘The only people who are pleased about that question are the people sitting in the corner up there,’ Mr Albanese said, pointing at the teal independents who took safe Liberal seats by advocating progressive social policy and climate change action

‘The idea that any foreign aid is giving Australians money to foreigners ahead of Australian interests, the leader of the opposition knows better, and he knows exactly what he is doing with that question,’ he said.

‘And the only people who are pleased about that question are the people sitting in the corner up there.

‘Because they represent seats that have rejected that sort of dog-whistling tactic from the Liberal Party.’

The ‘people sitting in the corner’ were the teal independents who snatched safe Liberal seats at the election by combining pro-business policy with progressive social policy and support for climate action.

Mr Albanese’s reference to ‘dog whistling’ describes a strategy of using coded language to appeal to a particular group without saying something others are likely to take strong issue with.

The PM also went after Mr Dutton for a joke he made in 2015 to then-PM Tony Abbott about drowning Pacific Islanders.

Mr Dutton was overheard remarking how late a meeting was running, which Mr Abbott said was the same as climate change talks he just had with with Papua New Guinea leaders.

‘Time doesn’t mean anything when you’re about to have water lapping at your door,’ Mr Dutton joked in response.

Mr Albanese said Australia needed an opposition that cared about tackling climate change, not ‘that sort of nonsense’.

‘I’d say to the leader of the opposition, ‘You’re better than that. You’re better than that’… Or maybe you’re not,’ he said.

Youth activists hold signs encouraging world leaders to maintain policies that limit warming to 1.5 degrees Celsius since pre-industrial times and provide reparations for loss and damage at the COP27 summit

Youth activists hold signs encouraging world leaders to maintain policies that limit warming to 1.5 degrees Celsius since pre-industrial times and provide reparations for loss and damage at the COP27 summit

Victims of the unprecedented flooding from monsoon rains use makeshift barge to carry hay for cattle, in Jaffarabad, Pakistan, in September

Victims of the unprecedented flooding from monsoon rains use makeshift barge to carry hay for cattle, in Jaffarabad, Pakistan, in September

Mr Dutton made a fresh apology for the joke, was described as ‘vulgar’ and ‘soft bigotry’ by Indigenous leaders at the time, soon after being elected Liberal Party leader in May.

‘I’ve made some poor-taste jokes, like any person, over the years, and I’ve apologised for that,’ he told ABC News when asked about it.

‘I’m as human and as frail as anybody else.’

The climate loss and damage fund was the main aim of developing nations heading into the COP27 summit last week.

The US and EU have long resisted the idea of paying for damage they caused through historical carbon emissions, fearing massive legal claims.

However, both relaxed their position as the week went on when it was agreed it would be a fund they contributed to, not the threat of direct claims.

Almost all the details are still to be worked out, including exactly who will be eligible, who will pay, and what kinds of disasters could be compensated.

The US and EU also want China, which though listed as a developing country but the UN has the world’s second largest economy and pumps massive amounts of CO2 into the air, to pay as well.

China initially won’t be required to, but the possibility of it and other big emitters like India contributing will be be discussed later.

Pacific Islands Forum Secretary General Henry Puna, a former prime minister of the Cook Islands, told COP27 delegates ‘the climate crisis is our daily reality’.

Victims of the unprecedented flooding from monsoon rains use makeshift barge to carry hay for cattle, in Jaffarabad, Pakistan, in September

Victims of the unprecedented flooding from monsoon rains use makeshift barge to carry hay for cattle, in Jaffarabad, Pakistan, in September

‘On loss and damage, we cannot wait for the next COP to see action. We are experiencing loss and damage now, and delaying tactics are not acceptable,’ he said on Wednesday.

Climate Change Minister Chris Bowen said before the deal was struck that it was too soon to commit Australian funds to the loss and damage mechanism.

Mr Bowen has made much of Australia’s support to ensure the loss and damage issue was on the COP27 agenda, but consistently said this year’s summit was never meant to talk about who would pay for what.

That, he said, is an issue for down the track.

‘You’re asking me how we’ll respond to a facility which does not yet exist and which has not been agreed at this COP yet,’ he said on Friday.

Australia quickly committed to the fund as soon as it was agreed to two days later, but its level of contribution is still an open question.

 

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