CANBERRA, ACT, Oct. 13 -- The Treasurer of Australia issued the following transcript:
Note
Subjects: reforms to support low‑income workers and build a stronger super system
Kieran Gilbert:
Jim Chalmers joins us now, I have to get straight to him. It's a big deal, this. You've rewritten basically the tax plan on superannuation. Can I just get clarity? You've abandoned the taxing of unrealised gains. Why is that?
Jim Chalmers:
We've made about half a dozen changes today. And these are practical, pragmatic changes which deliver on the same objectives, which is to make superannuation tax concessions fairer and to deliver more super for low‑income earners. And the change in the calculation from unrealised to realised gains is just one of half a dozen changes that we are announcing today. Still to satisfy the same objectives, but to do that in another way, taking into consideration all of the feedback that we've received over the course of the last 2 plus years.
Gilbert:
The idea of - and you know this has been one of the most controversial - to clarify the taxing of unrealised gains is that now dead, buried and cremated.
Chalmers:
We've changed that in the package that I've announced today. I recommended that to the Expenditure Review Committee on Friday afternoon and to the Cabinet this morning. And Cabinet agreed all of these changes that I announced today, including changing the calculation of the earnings for people with large balances. Again, 1 of 6 main changes that we are announcing today, having worked in our usual considered and methodical way through all of the issues.
Gilbert:
You've been around this building for many, many years and you know, this is how it's going to be read. And I'll ask you flat out, did you get rolled by the Prime Minister?
Chalmers:
No, of course not. And you know, honestly, Kieran, it's not about me or it's not about him. It's about finding the best way we can to deliver on our objectives. And our objective is a superannuation system which is fairer from top to bottom and that's what we are delivering. The Prime Minister and I agreed these changes. I recommended them to the colleagues, the colleagues agreed. And having agreed them earlier this morning, I went out and announced them as soon as I can after that.
Gilbert:
You've obviously spoken to the Greens. Do you feel comfortable doing deals with the Greens on these matters? Can they be trusted partners in economic reform?
Chalmers:
They've been constructive in the way that they've engaged with us over a period of time now. I did have a conversation, an initial conversation, with Larissa Waters this morning about the package after Cabinet had agreed it. And she'll take it to her party room as is appropriate and understood from our point of view as well.
We would like to see this package passed. We've got a little bit more work to do between now and the beginning of next year. We'd like to see it passed as soon as we can pass it in 2026, once that additional work has been done. But I don't want to pre‑empt the decision that the Greens party room will take on the new package that I announced today.
Gilbert:
It's not ideal being seen to be economic partners with the Greens though, is it?
Chalmers:
I'm trying not to see it in political terms, Kieran. We're trying to get the best outcome that we can for the budget and for the economy, and particularly for low‑income earners. One of the things that is lost, I think, so far in the commentary about the practical and pragmatic changes I announced today is that 14 times more Australians will benefit from our changes to the low‑income super tax offset than will be impacted by changes to tax concessions for very large balances.
And so, the biggest change announced today was actually that we will top up the superannuation of people on low incomes. That's a very substantial change, one that I'm very proud of, because it means in addition to this government ensuring people earn more and keep more of what they earn with our tax cuts, it also means more people will retire with more as well. And that's a really important objective.
Gilbert:
The LISTO is what you're referring to there. And you've upped the threshold, you've increased the contribution that's going to be made. What does that mean in dollar terms for people at the end of their working life?
Chalmers:
By one realistic assessment, the changes we're making to the LISTO will mean $15,000 more in a superannuation account at retirement. And that's part of what this is all about today. This is all about making the system fairer from top to bottom. That means maintaining concessionality at the top end, but making those concessions more sustainable, partly so that we can fund this really important change for people on low incomes.
Our superannuation system is the envy of the world. But as a Labor Treasurer, I take my responsibilities to super very seriously. And that means dealing with some of the imperfections, including the sustainability of the tax concessions at the top end, including the issues around adequacy for people on low incomes and also for women. These are some of the imperfections in super and the package that I announced today after getting it agreed by the Cabinet this morning are really about addressing those imperfections so that we can make superannuation stronger and fairer, and more sustainable at the same time.
Gilbert:
The $10million threshold, how many people will be affected by that? How much will that raise in dollar terms?
Chalmers:
In 2026-27, we expect that that will impact around 8,000 people. So, overall more than $3million we expect will still be less than half apercent of people in super. The part of that with more than $10million, we expect next year to be about 8,000 people. They'll still get concessional tax treatment in their large superannuation accounts, but it will be more sustainable, more targeted.
And that's deliberate and one of the reasons for that is because these changes will cost revenue compared to the original package. That new threshold is about helping to restore super to its original purpose, which is to provide for a decent retirement income, but it also helps us to fund these important changes we're making for low‑income workers.
Gilbert:
Was it also part of your deal to get the Greens over the line? Was that a bargaining chip to get- did they demand that?
Chalmers:
No, no. And I heard that, respectfully, I heard that speculated about a bit earlier. I think it was on your program, Kieran. That's not been the case. I informed Larissa Waters of that part of our policy earlier today after the Cabinet had agreed it.
Gilbert:
The federal judges, what's going on there? Have they been let off the hook in this sense? What's your thinking on this? Why have they been given special treatment?
Chalmers:
One of the complexities in the original model was that because of some constitutional provisions, state judges would be treated very differently to federal judges in the pension scheme, that judges are part of, the defined benefit scheme. And this is all about trying to align those 2 things.
But I want to assure your viewers more broadly, Kieran, when it comes to defined benefit, whether it's politicians or others at the federal level, they will still be subject to the changes to better target these superannuation tax concessions. The judge's issue was a bit different. I think to your credit that's been reported on by yourself and Andrew over time as well. There was some complexity there and the simplest way to address that was to align the defined benefit part of judges' super- state and federal- together and that's what we're proposing to do.
Gilbert:
The recent history shows economic reform is not easy. Were you spooked in part by the campaign against franking credits against Bill Shorten? Have you bowed to pressure in delivering these changes today?
Chalmers:
I don't think so. But this is a government that works through issues in a considered and methodical way and when feedback is given to us in good faith, we take it seriously. That's been my approach throughout as Treasurer and that's been our approach as a government. That's the example and the tone that the Prime Minister sets. Really from the Prime Minister down we try and work through issues, we try and find a way forward to deliver on our objectives.
In this case, system more sustainable and a better outcome for low‑income workers. And that's what's happened here. I try to take feedback seriously. Obviously, some of it is the usual kind of politically motivated stuff that's easy enough to ignore, but when there's genuine feedback as there has been over the course of the last couple of years, I do try and take that into consideration. I do try and respect that. And that's what's happened here.
Gilbert:
I've only got 50 seconds left of your time. I know I've got to let you go, but the timing of this, the day that the hostages are being released. I know I'm being a cynical journalist, but the timing does look a bit suspicious.
Chalmers:
You are, Kieran.
Gilbert:
It's not going to be the lead story tonight.
Chalmers:
This is not like you, Kieran. This is not like you, Kieran. This is not like you. No the timing was already determined, as I said I took it -
Gilbert:
- it's the first thing I thought about, to be honest -
Chalmers:
‑ well. No, not been the case and I suspect that it will still be covered extensively. I took it to the ERC on Friday afternoon. I took it to Cabinet this morning. I wanted to announce it as soon as the Cabinet had agreed. I thought that was the most appropriate way forward to front up and explain the changes. And that's what I've done earlier today and that's what I'm doing on your show.
Gilbert:
Well, you've timed it very much to the top of the hour, so we thank you for that, being a professional. We'll talk to you soon, Treasurer.
Disclaimer: Curated by HT Syndication.
