You'll take the super tax change to the 2025 election. But the new measure will feature in this year's Budget and be legislated in the current term of this Parliament. The Coalition says that still constitutes a broken promise, is it?
PRIME MINISTER: No it's not, Patricia. It very clearly takes effect after the next election. And what we're doing here is a very modest change to give less generous tax breaks for those who have superannuation balances above $3 million. That means that for 99.5 per cent of superannuants this will have no impact on them whatsoever. This is a modest change that is about improving the sustainability of the system. It's important as well to recognise it's not retrospective, it applies to future earnings from 1 July 2025 which, as you point out quite rightly, is after the next election.
KARVELAS: Okay. So given it's after the next election, and the Treasurer told us that he wanted a conversation about superannuation, has that conversation now ended in this policy, or does the conversation continue?
PRIME MINISTER: Well, we of course, will include this measure in the Budget, and then we'll have legislation. This provides for opportunity to consult further, but this is the government's position that that we will be taking forward. And it's a necessary change.
KARVELAS: My question is, are we going to have a conversation beyond this policy?
PRIME MINISTER: No, this is the only change which we're proposing.
KARVELAS: Today or this whole term of your government?
PRIME MINISTER: This term, this is the only change on superannuation that we're proposing. And it will take effect after the next election. I think most Australians would be quite surprised that there are 17 Australians who have over $100 million in their superannuation accounts, and one has over $400 million. Now most Australians would agree that that's not what superannuation is for, that's about providing for people's retirement incomes. And that's why this change is important. Remember a few years ago, there was a change put forward under the Turnbull Government that impacted 4 per cent of superannuants.
KARVELAS: It was more ambitious than this policy, wasn't it?
PRIME MINISTER: It made substantial changes. Labor voted for those changes because it was the responsible thing to do. Those changes brought in the tax section 293 for those who are earning above $250,000. It affected eight times more people than then this change. But Labor was responsible, that was measures that that we voted for, but they came into effect, as well, after the election in which they they were introduced into the Parliament.
KARVELAS: Okay, so when you when you actually talk about this is the only policy on superannuation in this term, given the super tax breaks are pretty enormous according to the statement released yesterday, does that mean that you'll seek a mandate at the next election for perhaps more reform in this area? Is that on the table?
PRIME MINISTER: Look, we think that the superannuation industry works well. Labor built superannuation in this country, we will always stand by it. We are introducing this measure to strengthen its sustainability. And this is the policy that we're putting forward. People will get to have further debate on this. There was a whole lot of speculation out there. That's why we've made this announcement to make it clear that this is a modest reform, but it's a necessary one.
KARVELAS: It is modest. So Prime Minister, given you've made this case also that the tax breaks are rather large, aren't you boxing yourself in again, just like you did before the last election, by really containing this and not allowing a bigger debate about concessions beyond this?
PRIME MINISTER: Well, Patricia, debates occur. It's a matter of what government action is. I'm just clearly putting forward this change. We're making it clear, the change that we're proposing, it will impact half a percent of Australians, so 99.5 per cent won't be impacted at all. Also, it's important to recognise that this doesn't place a limit on contributions. It simply means that there'll be less generous tax concessions, they'll be taxed at a concessional rate of 30 per cent rather than 15 per cent.
KARVELAS: Will people be allowed to make an early withdrawal of excess funds above $3 million from their superannuation accounts without penalty?
PRIME MINISTER: We'll deal with all of that detail. It will be there in the legislation when when it's put forward.
KARVELAS: Have you not made a determination about that?
PRIME MINISTER: Treasury are working on all of the details. The legislation will be there for all to see very clearly. We don't intend to have an impact here on the way that superannuation functions, including people are allowed to have a withdrawal. People know when this change is coming in on 1 July 2025. This isn't about a fundamental change to superannuation. It doesn't change any of that. This is a very specific change. We are doing what we announced yesterday.
KARVELAS: Prime Minister, in the statement yesterday, the Treasurer identified as super tax concessions are just a third of the $150 billion of foregone income for the Commonwealth. You're acting on this, will you look at other lost revenue, like Capital Gains Tax or negative gearing?
PRIME MINISTER: No, look, this was a Treasury statement. It wasn't a statement by the Cabinet, if you like. This was just a statement of fact that we're compulsorily required to do under the budget honesty provisions. What we've done is release more information. It's more honest than it's been in the past so that people can see.
KARVELAS: So when you look at those figures, do you look at those figures and think we need to act on capital gains tax as well?
PRIME MINISTER: Now, there's a range of figures out there that are there for very good reasons, such as Capital Gains Tax doesn't apply to the family home.
KARVELAS: Okay. It's interesting you just raised that because your Treasurer has spoken on Sunrise this morning. He would not rule out Capital Gains Tax changing on the family home, he said that's not your intention. Can you rule it out?
PRIME MINISTER: Yes. We are not. We are not going to impact the family home, full stop, exclamation mark.
KARVELAS: Why not?
PRIME MINISTER: Because we're not going to.
KARVELAS: But why not? What is the policy -
PRIME MINISTER: Because it's a bad idea.
KARVELAS: Why is it a bad idea?
PRIME MINISTER: It's a bad idea because people who save for their home that they live in with their family is something that we have no intention of making any changes there. I have never heard - in all of the meetings that I've been to, Patricia, over the years and I've been to a few of the Labor Party Cabinet, caucus, branch meetings - I've never heard anyone raise that as a proposition.
KARVELAS: Okay, how about negative gearing? You've got a Senator, his name is David Pocock, and he says why not look at negative gearing?
PRIME MINISTER: Well David Pocock is an Independent Senator, he's not one of my mine.
KARVELAS: He's not, but he's crucial number for you in the Senate.
PRIME MINISTER: He has a range of proposals and and good luck to him. I say to David Pocock, good luck to you, you got elected, you're an Independent.
KARVELAS: He might have some good ideas that are worth exploring.
PRIME MINISTER: Patricia, we are we are saying what we are doing.
KARVELAS: Is it fair that people can negatively gear on their fourth or fifth home?
PRIME MINISTER: We announced what we are doing. We announced exactly what we are doing yesterday. And a speculative thing about someone who's an Independent raises some issue has no truck with me, whatsoever.
KARVELAS: So this superannuation change, it's a modest 80,000 people, it takes effect after the next election. Is that the strategy for any changes now? That you essentially seek a mandate for any changes that you want to make?
PRIME MINISTER: No, I think on this measure it is the right thing to do. And we have had, obviously, a discussion about it, Cabinet met yesterday, it was something that I strongly supported, ensuring that any changes were after the election. So it's very clear that we are being upfront about what our intentions are. And that is why doing it after the election makes that very clear.
KARVELAS: Yesterday, the Treasurer ruled out using the money collected to fund superannuation for women, for instance, on maternity leave. But why not? It would cost $200 million a year, that's just 10 per cent of the overall savings. You'd still be banking plenty for the Budget bottom line. If not now, when?
PRIME MINISTER: We don't have a hypothecated taxes in this country, Patricia, and you know that that's the case.
KARVELAS: But the concept of this?
PRIME MINISTER: We've said that we would like to do it when when the Budget allows. I've made that very clear. I've also said we have a trillion dollars of debt. We are responsible economic managers. We need to address the inflationary pressures that are there in the economy and that requires us to be very prudent about any expenditure. And that is what the government is doing. And that's why this measure will help to pay down debt. That is what we have to do. We have inherited a trillion dollars of debt and massive deficits, as far as the eye can see, into the future. With the inflationary pressures that are on, we are being fiscally responsible. Last October, when we handed down the Budget, 99 per cent of the revenue gains went straight to the bottom line and this measure will go to the bottom line as well.
KARVELAS: Prime Minister, is reforming our Budget too hard in this political climate?
PRIME MINISTER: Well, certainly, it's difficult when you have the sort of nonsense raised, such as the family home somehow raised as part of this discussion.
KARVELAS: Well some people think it's a good idea. I'm not advocating it myself, but I'm saying this is a legitimate question.
PRIME MINISTER: I haven't met them. I haven't met them, Patricia. Not one constituent has ever
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