Prime Minister Anthony Albanese has been forced to rule out tax changes to the family home as “a bad idea” after Treasurer Jim Chalmers failed to rule it out on Sunrise.
During a fiery round of breakfast TV interviews in the wake of proposed reforms for millionaires with superannuation balances above $3 million, the Treasurer was put on the spot by Sunrise‘s David Koch over “what was next.”
Capital gains tax (CGT) is the tax you pay on profits from selling assets, such as property. If you live in the property and it’s your main residence you are exempt from paying Capital Gains Tax when you sell.
According to the Treasury the main residence exemptions cost the budget around $48 billion in revenue foregone.
Rental deductions or negative gearing costs the budget a similar amount.
Any move to change that would hit average Australians with massive tax bills when they sell the family home.
Sunrise host Kochie and Treasurer Jim Chalmers clashed on live TV this morning over tax changes. Picture: Sunrise/Channel 7
“What’s next? Can you say yes that you absolutely guarantee no change ever to the capital gains tax exemption on our family home?,’’ Sunrise’s David Koch said.
“I can say to your viewers we have not been focused on it, it is not something we have been contemplating,‘’ the Treasurer Jim Chalmers replied.
“Just say yes,‘’ Koch said.
But Dr Chalmers refused.
“I can’t commit future governments to changes or otherwise,’’ he said.
He was then asked if he could guarantee it “during your reign as treasurer, you will never change the capital gains tax exemption on the family home.”
“It is not my intention, it is not something I have been thinking about, working up or contemplating. We don’t know what the situation might look like in 10 or 15 years and other governments,’’ Dr Chalmers said.
“We want to take it to the peopleâ€
Treasurer Jim Chalmers has told Sunrise’s David Koch that the government’s superannuation shake-up will only affect the half a percent of the population who have $3 million in their super, including Prime Minister Anthony Albanese. @JEChalmerspic.twitter.com/itYJzDVtl2— Sunrise (@sunriseon7) February 28, 2023
Less than half an hour later, the Prime Minister Anthony Albanese headed to the ABC’s Radio National and cleared up the confusion.
“Do you look at those figures and think we need to act on capital gains tax as well?,” RN host Patricia Karvelas asked.
“The Treasurer would not rule out capital gains tax changing on family on the family home said that’s not your intention. Can you rule it out?.”
Mr Albanese said he could rule it out.
“Yes,‘’ the Prime Minister said.
“We are not going to impact the family home. Full stop exclamation mark.”
“Because we’re not going to … because it’s a bad idea.”
“It‘s a bad idea because people who save for their home that they live in with their family, (that) is something that we have no intention of doing. We will not be making any changes there.
Mr Albanese said no one in the Labor Party had raised that proposition.
The Prime Minister said it was “nonsense that … the family home was somehow raised as part of this discussion … when you have an opportunist opposition that opposes everything.”
Treasury figures revealed yesterday confirm that 2.4 million property investors are claiming $51 billion in rental deductions and generating $18.6 billion in lost revenue.
Thousands of millionaires with super balances worth more than $3 million will pay more tax under the proposed changes outlined by the government.
Prime Minister Anthony Albanese was forced to save face on Wednesday morning, after Treasurer Jim Chalmers got caught up in a fiery clash. Picture: NCA NewsWire / Martin Ollman
The Albanese Government insists the changes won‘t impact 95 per cent of workers and retirees who don’t have massive super accounts.
The changes won‘t kick in until 2025, an attempt by the Albanese Government to try to blunt attacks that the super changes are a broken promise.
“Today we’ve seen the Prime Minister and the Treasurer walking away from their commitment to not add taxes to superannuation,” opposition Treasury spokesman Angus Taylor said in a press conference on Tuesday.
“This was an unambiguous commitment from the Prime Minister, he said he wouldn’t raise taxes on Australian super.
“We’re going to see – I’m confident – a lot more of this from the Labor Party.“
The changes are set to blast 80,000 millionaires that currently have more than $3 million in super with more taxes.
Currently, taxpayers who earn under $250,000 a year can voluntarily deposit up to $27,500 into their super annually and pay a concessional tax rate of 15 per cent.
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Under the proposed changes that tax rate will double to 30 per cent for Australians with more than $3 million in their super, from July 1, 2025.
Labor had promised in the lead up to last year’s election they would not make any “major” changes to the superannuation system in this term of government.
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