Bills
Treasury Laws Amendment (Better Targeted Superannuation Concessions And Other Measures) Bill 2023
Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023
Second Reading
Mr HAMILTON (Groom) (13:00): Isn’t it a joy to see what a couple of quorum calls do to lift the atmosphere in the chamber! I remember all the wonderful times on quorum duty that I spent listening to pearls of wisdom, and I’m happy to dispense some back, because there’s much to talk about with the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023. Goodness me: what an affront to the economic credibility that the Treasurer strives for—the idea of taxation of unrealised gains. Goodness me.
But to put this into the context of the time where we find this: this is the highest-taxing government in 23 years and—a wonderful little pearl that I picked out—outside of COVID, the highest spendings of potential GDP since 1986-87, which, for those of you who remember, were Keating’s ‘banana republic’ years. Isn’t it wonderful the way things just come back? We find ourselves in another era of spiralling spending, causing a giant threat to interest rate rises. But that is where a bill like this comes from: Labor needs to find a new tax. You’ve heard of Farmer Needs a Wife. Well, Labor needs a tax. That’s what this is about. They need something to feed this constant appetite for growing spending that we’ve seen.
And they’ve gone ahead with a new one. They’re flouting all our taxation history and coming up with taxation on unrealised gains, and I’ll speak about where this will hurt. This is beyond just the usual redistribution of wealth that we’ve come to expect. This is now a redistribution of wealth that you don’t even have. This is stretching into realms of fiscal thought police, economic re-education programs and monitoring the market for signs of aspiration to nip it in the bud and make sure we can snuff out the slightest thought of prosperity in this country.
To reinforce my humble contribution today, I’m going to add a few statements that we’ve received—all on the public record—that I think all very much agree on what a ridiculous proposal this is and on what an affront it is to the basis of economic credibility. The National Farmers’ Federation made a fantastic comment. They said they hold significant concerns about the impact of the government’s proposed changes to the treatment of superannuation holdings and what effect it will have on operations across the country. The NFF is particularly concerned with respect to the proposed taxation of unrealised gains on holdings and what this will do to farming businesses. They point out quite well that the smaller the farming operation the bigger the impact this will have—the less likely you will be able to cover the new tax.
Regarding that $3 million threshold, I’ve got to point out that in my part of the world a $3 million holding is not a big farm anymore. We’re not talking about big guys. These are family farms. And we have seen the value of the land increase, particularly around cities like Toowoomba and those beautiful black soil plains stretching out towards Dalby and beyond—these are reasonable, modest family operations. Their value has increased. The concerns that the National Farmers’ Federation raise about this legislation are significant. They point out that most of these farms nowadays use a self-managed super fund to hold that operation.
This is not new. When the NFF raised this to this side of the House we knew this. This is not new. These are our people. Sadly, it seems to be coming as quite a shock to the government. I think the National Farmers’ Federation put this clearest. They said that, given that agricultural land values can experience high growth, as they did in 2022 and 2023, land price per hectare increased by 28.6 per cent and 27 per cent, respectively. They continue to generate only modest cash income. This new tax may see an increased obligation that represents a significant proportion of their annual retirement income derived from leasing arrangements with their children or even exceed it. What we’re seeing here is capital growth, paper capital growth, but no growth in income coming in. So the ability to service this new tax is simply not there. In fact, it’s quite the opposite, because, whilst that growth in income isn’t happening, we’re seeing inflation across the board making every one of those dollars worth less. As inflation cripples the country—I know governments come up with forecasts to suit their spending habits, but it is out there and hurting us in the regions—as that continues, a farmer’s ability to service this new tax will decrease year on year.
I’ll go to the Financial Services Council. This was covered in the Australian. They’ve criticised the government’s refusal to index the $3 million threshold for tax structures and being unfair to future generations of super members. We’ve heard this covered before. The acting chief executive, Spiro Premetis, told the Australian that more than 500,000 current taxpayers would be adversely impacted, and this included ‘204,000 Australians under the age of 30’. I point out that this is the only demographic, 21 to 29-year-olds, who are experiencing a decline both in their discretionary and their non-discretionary spending. They are losing out every which way. House prices are going through the roof. Their ability to save is completely reduced. If they’re renting, they’re seeing rents going up. Now, thanks to this wonderful tax, they are again disadvantaged. Mr Premetis went on:
Leaving the cap stuck at $3m will mean that in today’s dollars a 30-year-old will have a real cap of around $1m, calling into question the intergenerational fairness of an unindexed cap.
It’s a very fair point. Under this government, it has become harder for these young people to own a home. We’ve seen house prices continue in this cost-of-living crisis. We’ve seen the ability for people to save reduce. Now, thanks to this, we’re also going to make it harder for them to retire. They’re going to get it as they come to adulthood and as they retire. We’ve just made that harder as well with this fantastically poorly-designed piece of legislation.
I’ll go to the next on my list of people who have reasonable concerns about a very unreasonable bill. Writing in the Australian, Robert Gottliebsen makes an excellent point. This was covered by the member for Wentworth as well. He wrote:
After July 1 2025 it will be virtually shut down because a major source of local funds—large self-managed funds—will withdraw.
He’s speaking of the ability of venture capital to support new industries. This is fascinating. He goes on:
The current participants in the venture capital market raise high risk money from a variety of sources, but one of the largest is big self-managed superannuation funds.
…
That tax is clearly unfair and goes against all principles of Australian and global taxation. But, when applied to unlisted venture capital investments it is a disaster.
This is a wonderful point. When we hear a government talking about Made in Australia and wanting to see things made here, this is fantastic!
Government members interjecting—
Mr HAMILTON: I love that the dots aren’t able to be joined by those on quorum duty today, but, when you take away the investment here, what you get in the end are fantastic investments—like getting a Silicon Valley company to build a computer, owned in America, and slapping a ‘Made in Australia’ sticker on it. You beauty—a billion dollars—what a great idea! Australia has mocked it and rejected it completely. But that’s where we’ll go if we continue down this path of making self-managed super funds less and less attractive.
My favourite part though, amongst all of this—because there are always different views—was from a silk, who was quoted in the SMH, that great bastion of right-wing thought:
Appearing before a senate select committee, Michael Black KC, said there was ‘no doubt’ there would be a constitutional legal challenge to the tax change.
So here we are. Not only is it poor, and not only does it present an affront to our entire taxation history; it’s completely risky. Of course, necessity is the mother of invention. When you have a high-spending government like this, they need to find new ways to raise taxes, and this is a great invention. It’s outside anything we’ve had before. They’ve invented a tax unlike anything we’ve had.
The government cannot say it hasn’t been warned of the consequences of this tax. We’ve heard from speaker after speaker, particularly on the impact on farming. I guess it’s okay; we don’t expect Labor to be across the issues that farmers face—it’s not their thing. But, when you have the NFF speaking out as clearly as it can on the impact of this; when we have local farmers raising their concerns to their members consistently about the impact this will have on their operations; and when we bring those concerns here and get them completely rebuked, laughed at and mocked by the government, you know they’re not listening. They’re not listening to the concerns about the consequences of this legislation—and they are significant, and they will play out. The government has been warned, and they now own every single outcome that will play out across farms in Australia. When this comes through, and your operational income hasn’t increased, but the paper value of your land has, and you can’t service this taxation—this is what the government wanted. That is the situation that the government is deliberately creating for farmers of Australia. They have been warned, and they refuse to listen.
They could have addressed it. They’ve had plenty of time to address this, and they haven’t. It’s a very simple calculation. There is no increase in the capability to service a new tax. In fact, we’re in a period of time where inflation has driven the cost of living through the roof, across every aspect. We can complain about new taxes on biosecurity laws that are unfairly put onto farmers and that should be distributed to those importing the risk, but this is such an affront to the farming community because there is no reason whatsoever why this concern should not be addressed. The government have walked away from their responsibility on this one.
We can be very clear: the impact of this will be that the smaller the farm or operation the more hurt it will cause, because they have less ability to pay a new tax. Once again, the small family run farms will be pushed out, and we’ll see farming run exclusively by corporations in Australia. That’s where we’re heading. It’s an absolute shame. I think about my electorate, where we still have the settlers’ blocks, the blocks that were given to the soldiers who came back. They’re small for a reason: so that a family could make a living on these farms. Because of their proximity to growing cities, these farms have grown in value, and they are now right in the firing line of this new tax. That is who is getting squeezed out. And who’s getting rewarded? The giant multinationals, who can afford to pay a new tax. They can afford to cover it. They’ve got the operational costs. The small guys don’t have the operational money coming in.
Government members interjecting—
Mr HAMILTON: I love to hear the laughter from those on quorum duty at what’s going to happen to farmers. It’s okay. I get it. You don’t have them in your patch. You don’t understand them. They’re not yours.
Government members interjecting—
Mr HAMILTON: I am angry. Absolutely. I want this point to be on record because I want to be able to say: ‘You guys turned your back on these people. You turned your back on them, every single one of you. There was a chance you had to change these ridiculous laws, and you didn’t.’ This is completely on the government. They’ve ignored the experts.
What we have here now is a clear separation. There could not be a clearer choice for regional Queensland: those who have chosen to tax farmers in an unreasonable and unfair way and those who have stood up for them. I’m very happy to be able to say that I have stood up for my farming communities.
