Opposition to super tax only defends the rich

Treasurer Jim Chalmers is set to lift the tax rate on superannuation account balances above $3 million from 15 percent to 30 percent. Despite the modesty of the proposal, there has been a broad conservative backlash arguing that it’s an unjust money grab.

The reaction is nothing but fearmongering and deceit to defend privilege. Today, only the top 0.5 percent of superannuation accounts have more than $3 million. The average superannuation account balance upon retirement for men is about $450,000 and for women $400,000. Based on current trends, we’ll have to wait until the next century for the average super balance to reach the nominal $3 million mark.

Considering the extensive tax concessions for superannuation, the proposal is merely a slight reduction in existing government generosity to the wealthiest people. Indeed, superannuation provides tax breaks worth more than $50 billion per year. The richest people stuff their assets into self-managed super accounts to take advantage of the concessions. There exist some superannuation accounts worth more than $100 million.

Chalmers’ tax, controversially, applies to “unrealised gains”, meaning it applies to assets not yet sold. But it’s laughable to think that very wealthy people don’t have the means to pay the extra tax. And if they don’t want to pay, they can simply limit their super balances to a healthy $3 million.

The Teals have opposed the policy, in part because of this unrealised gains tax. Allegra Spender has argued that Chalmers’ proposal is unfair because it doesn’t have a provision for refunding tax paid if asset values fall. The Teals think we should compensate people who avoid tax if the scheme doesn’t work out perfectly. Besides being an expression of their overall right-wing alignment, this move by the Teals is a defence of the interests of their constituencies, their seats being some of the wealthiest in the country. It’s no surprise that they’re against taxing the rich.

The Greens have proposed reducing the tax threshold to $2 million, while also indexing it—so that the threshold would increase over time. With indexation, the measure would ever affect only the wealthiest—perhaps the top 1 percent. But why should we give generous tax concessions to the top 10 percent? Why should we provide tax concessions to wealth accumulation at all?

The Greens have accepted the ideological premise of the debate: that people’s retirement income should be determined by their capacity to accumulate assets.

Since the 1980s, the surge in asset prices, primarily stocks and real estate, has been a significant driver of growing wealth inequality, asset holdings being concentrated among the top 10 percent of the population. Superannuation has been part of this. It’s a means of wealth accumulation through investment, rather than an equitable provision of retirement incomes.

Instead of focusing on wealth accumulation, the economy should be restructured to raise working-class incomes, including those of working-class retirees. This would mean raising wages, Jobseeker, the pension and other support payments. Avenues to hoard wealth should be closed off, starting with the housing market.

Labor has no intention of taking substantive action in this direction, and historically championed the economic restructuring which led to our current situation.