A TV journo has poured fuel on the heated debate over superannuation concessions with a brutal takedown on the streets of one of Australia’s wealthiest suburbs.
Today Show reporter Lara Vella took to the streets of Sydney’s Double Bay on Wednesday to quiz locals on the painful impact of the government’s decision to cap concessions on the country’s most-loaded super accounts.
“It’s tough out here,” she told hosts Karl Stefanovic and Sarah Abo.
“The community, they’re counting their pennies, they’re counting the stacks of $100 bills that they have strategically placed throughout their penthouses and mansions in case of a rainy day because this is basically class warfare.
“Let’s face it, no one likes it when the rich are the targets, do they?”
The Albanese government was under fire on Wednesday for its plan to legislate to lift the concessional tax rate on future earnings for super balances above $3 million from 15 per cent to 30 per cent from 2025/26.
The move will affect only about 80,000 Australians. It is expected to raise $2 billion in the first full year and $3.2 billion over five years, which will go back into the budget rather than be spent.
But the Coalition has come out swinging, with Opposition Leader Peter Dutton vowing to repeal the changes if he wins the next federal election.
“We’re dead against it. And we will repeal it,” Mr Dutton said on Wednesday.
The Coalition has also lashed Mr Albanese over what it claims is a broken election promise – after he pledged no major changes to super while on the campaign trail last year.
In Double Bay (median house value $4.2 million) on Wednesday, Vella headed to a cafe to gauge how locals felt.
“People are very despondent,” a barista said.
“They’re going to be ordering less coffee now, and they’re not sure how they’re going to get through their day.”
Vella asked: “How will they pay for their almond lattes?”
“They’re going to have to sell some of their properties,” the barista said.
Then it was the turn of a local man.
“What are you going to do? Are you going to have to sell the second Mercedes?” Vella asked him.
“Not the Mercedes,” he said. “It’s my third boat – my daughter’s favourite – it’s grim, but I’ll have to consider it.”
Labor defends ‘modest changes’
Shadow treasurer Angus Taylor has blasted the government’s plan as a “supersized” broken promise.
“It’s a Trojan horse government that just want to get into power and do
what they want to do without being upfront with the Australian people,” he said.
Mr Dutton was even firmer, saying the Coalition would not “stand by and watch Australians attacked”.
“There are 88,000 that they’re talking about now. But that figure of $3 million is not indexed, so in 10 or 15 years’ time, there will be tens of thousands, if not hundreds of thousands, of Australians who will be affected by this,” he said.
Mr Albanese has denied breaking any election pledges.
“‘No it’s not,” he told ABC radio..
“It very clearly takes effect after the next election, and what we’re doing here is a very modest change.
“This is a modest change about improving the sustainability of the system.”
Treasurer Jim Chalmers told Sky News he wouldn’t “quibble” over whether it amounted to a broken promise.
“People have got a couple of years to prepare for it,” he said.
“I think it’s entirely appropriate we legislate it before [the election].
“If Peter Dutton and Angus Taylor want to go to the wall for these half a per cent of people with very large superannuation balances, the party that gave us a trillion dollars in debt wants to borrow even more money to give for these unaffordable tax breaks [it can].”
Dr Chalmers said the government had struck the right balance with the $3 million threshold, instead of lowering it to boost revenue.
He said Australia’s superannuation system was world class but had two major imperfections.
“The cost of the tax breaks for people who don’t need them, and the gender gap in balances,” he said.
Time to get real about funding government services: Chalmers
What the superannuation tax concession changes mean for you
Dr Chalmers said difficult decisions had been made in not putting the money towards paying super on paid parental leave.
“When we can afford to pay the superannuation guarantee on paid parental leave we would like to, but this change is about budget repair.”
Mr Albanese said it was hard to argue super accounts with balances of $3 million or more were about “actual retirement incomes”.
“There are 17 Australians who have over $100 million in their superannuation accounts and one has over $400 million,” he said.
“Now most Australians will would agree that’s not what superannuation is for, that’s not about providing for people’s retirement incomes.
“That’s why this change is important.”
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