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CIO blasts Labor’s $3m super tax policy as ‘reckless and stupid’
The contentious debate over Labor’s superannuation tax policy has intensified.
Labor’s controversial $3 million super tax policy has faced sharp criticism, with Motley Fool chief investment officer Scott Phillips calling it “reckless, silly, and stupid.”
Speaking to Sky News on Tuesday, Phillips said: “I have a feeling this was a backdoor way of trying to reduce super balances or get people to withdraw their super to keep the balance below that number. To make it so incredibly difficult and challenging to keep more than $3 million in super.”
He said this plan would ultimately cap both super and deductions without explicitly doing so.
Phillips also criticised the taxation of unrealised gains, a measure that many have opposed in recent days.
The bill is expected to hit the House of Representatives for a third time on Thursday and, while it is likely to pass in the lower house, it is anticipated to face hurdles in the Senate.
This week, it was revealed that independents David Pocock and Jacqui Lambie are gearing up for a fight in the Senate, particularly over the taxation of unrealised gains.
The Greens are also opposed to the legislation in its current form but advocate for lowering the $3 million threshold to $2 million.
Last year, when the government first announced its plans to raise the concessional tax rate for balances exceeding $3 million from 15 per cent to 30 per cent, the superannuation industry largely commended the perceived push for equitability.
Industry Super Australia (ISA) backed the proposed reforms, stating the changes would help level up the super system for all Australians.
Meanwhile, Dr Martin Fahy, CEO of the Association of Superannuation Funds of Australia (ASFA), voiced cautious optimism in reading the “significant” measures.
Also at the time, Aware Super CEO Deanne Stewart said the fund stood against “tinkering” with super but acknowledged the need for fairness in the system.
AUTHOR
Maja Garaca Djurdjevic
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Big business has joined the chorus of opposition against the proposed Division 296 tax.
Future Group is set to take on nearly $1 billion in funds under management (FUM) and welcome more than 100,000 new members following two significant successor fund transfers.
Insignia’s Master Trust business suffered a 1.9 per cent dip in FUA in the third quarter, amid total net outflows of $1.8 billion.
While the Liberal senator has accused super funds of locking everyday Australians out of the housing market, industry advocates say the Coalition’s policy would only push home ownership further out of reach.
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