Anthony Albanese steps in after Jim Chalmers’ Sunrise feud with David Koch over super
Prime Minister Anthony Albanese has been forced to rule out tax changes in the family home as “a bad idea” after Treasurer Jim Chalmers failed to rule it out at Sunrise.
During a fiery round of breakfast TV interviews in the wake of proposed reforms for millionaires with retirement balances over $3 million, the treasurer was put on the spot by Sunrise’s David Koch about “what was next.”
Capital gains tax (CGT) is the tax you pay on profits from the sale of assets, such as real estate. If you live in the property and it is your primary residence, you are exempt from paying capital gains tax on sale.
According to the Treasury, the principal residence exemptions cost the budget about $48 billion in lost revenue.
Rent deductions or negative gearing cost the budget a similar amount.
Any change that would hit the average Australian with huge tax bills when they sell the family home.
“What’s next? Can you say yes that you absolutely guarantee that the capital gains tax exemption on our family home will never change?” said David Koch of Sunrise.
“I can tell your viewers we’re not focused on it, it’s not something we’ve thought about,” replied treasurer Jim Chalmers.
“Just say yes,” Koch said.
But Dr. Chalmers refused.
“I cannot commit future governments to change or otherwise,” he said.
He was then asked if he could guarantee “during your tenure as treasurer, you will never change the capital gains tax exemption on the family home.”
“It’s not my intention, it’s not something I’ve thought about, worked out or considered. We don’t know what the situation will look like in 10 or 15 years and other governments,” Dr Chalmers said.
Less than half an hour later, Prime Minister Anthony Albanese went to ABC’s Radio National to clear up the confusion.
“Do you look at those numbers and do you think we should do something about capital gains tax as well?” asked RN host Patricia Karvelas.
“The treasurer would not rule out capital gains tax changes on family at the family home, said that is not your intention. Can you rule it out?”
Mr Albanese said he could rule it out.
“Yes,” said the prime minister.
“We are not going to influence the parental home. Full exclamation mark.”
“Because we’re not going…because it’s a bad idea.”
“It’s a bad idea because people saving for their house where they live with their family (that) is something we don’t intend to do. We will not make any changes there.
Mr Albanese said no one in the Labor Party had put forward that proposal.
The Prime Minister said it was “nonsense that … the family home was somehow brought up as part of this discussion … when you have an opportunistic opposition that is against everything”.
Treasury figures released yesterday confirm that 2.4 million real estate investors are claiming $51 billion in rent deductions and generating $18.6 billion in lost income.
Thousands of millionaires with super balances worth more than $3 million will pay more taxes under the proposed changes outlined by the government.
The Albanian government insists that the changes will not affect 95 percent of workers and retirees who do not have huge super accounts.
The changes don’t come into effect until 2025, an effort by the Albanian government to try and deflect attacks that the super changes are a broken promise.
“Today we have seen the Prime Minister and Treasurer walk away from their commitment not to add taxes to the pension,” opposition spokesman Angus Taylor said at a press conference on Tuesday.
“This was an unequivocal commitment from the Prime Minister, he said he would not tax the Australian super.
“We will – I am sure – see a lot more from the PvdA.”
The changes will wipe out 80,000 millionaires who currently have more than $3 million in super with more taxes.
Currently, taxpayers earning less than $250,000 a year can voluntarily deposit up to $27,500 a year into their super and pay a favorable 15 percent tax rate.
Under the proposed changes, that tax rate will double to 30 percent from July 1, 2025 for Australians with more than $3 million in their super.
Labor had promised in the run-up to last year’s election that they would not make “major” changes to the pension system during this term of office.