Support for super tax reform among young, women makes Coalition’s dissent a real puzzle
The Liberal Party’s stance is out of touch with the public mood, writes Stephen Long.
Predictably, the Liberal Party is opposing reforms that would reduce tax concessions on money made from superannuation balances above $3 million. But its stance is out of touch with the public mood.
Polling conducted by YouGov for the Australian Institute shows that twice as many people support the federal government’s proposed changes as oppose them.
Some 52 per cent want the tax concessions on the earnings from these super-sized super balances cut back, compared to just 26 per cent who don’t, the poll shows. A little more than one in five were undecided.
That’s despite ubiquitous media coverage of the wailings of the worried wealthy. The media’s focus on complaints from the tiny proportion of Australians impacted – about 80,000 people – has failed to produce widespread concern among the more than 99 per cent of Australians who have less than $3 million in super.
That’s not surprising when one considers just how far most people are from that level of retirement savings. According to ATO data, the average super balance is a mere $182,000 for men and $146,000 for women. For those between 60 and 65, it’s just over $400,000 for men and $318,000 for women.
Despite this, people tend to overestimate the likelihood they will be affected by the change. About one in five of those surveyed thought it would impact on their retirement plans. The reality is only one in 200 have super balances above the level that attracts the higher tax rate.
The federal government’s proposed changes would apply only to earnings on the share of super above $3 million. Those earnings would be taxed at 30 per cent instead of 15 per cent, which would still be a concessional tax rate, and still provide more than enough income for these people to enjoy a grand retirement. Let’s be clear: People with that much money in super can live in luxury.
Interestingly, independent voters – the constituency that’s cost the Liberal Party so many once safe seats – are the most supportive of Labor’s planned reform.
Plainly, young people who can’t afford rent, families struggling to pay for childcare, and the worrying number of older women retiring with very little super, all face far more pressing challenges than the uber-wealthy Australians who will be affected by this reform.
The polling suggests that, overall, the policy is a net vote-winner for Labor, especially among the young.
Yet after an election where record numbers of young people and women turned away from the Liberal Party, the opposition is choosing to make a big fuss about an issue that overwhelmingly affects older, wealthy men. An interesting choice by its newish leader, Sussan Ley.
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Perhaps the Coalition thinks it can resurrect the kind of scare campaign it mounted in the lead-up to the 2019 federal election against Labor’s franking credits policy, which also would have affected a tiny share of wealthy Australians.
But this time, the horse has bolted. Labor took the proposal to tax the earnings on extremely high superannuation balances to the last election and won. It doesn’t need opposition support to legislate the change.
And most people seem to understand that superannuation is meant to help people have a dignified retirement – not to provide a tax avoidance tool for rich people looking to pass on wealth to their children.
Stephen Long is senior fellow and contributing editor at the Australia Institute.
