Subjects: Labor’s superannuation shambles; the Deputy Prime Minister’s inability to explain his own superannuation policy; Aston by-election; cost of living pressures; AUKUS; Richard Marles’ $800,000 new office.
E&OE
KARL STEFANOVIC:
Well, there’s only been one word on everyone’s lips in the Canberra bubble this week – superannuation. As the Opposition sharpened its attack lines, the Prime Minister and Treasurer were forced to regroup after Jim Chalmers failed to rule out tax changes to the family home. Deputy Prime Minister Richard Marles and Opposition Leader Peter Dutton join us now. First of all guys, hats off to you, you’ve made superannuation sexy again! Richard, a week, though, you’d rather forget?
RICHARD MARLES:
Well look, this is a modest change, Karl. It only affects people if you’ve got $3 million in your superannuation fund – that’s about 0.5 per cent of superannuants. So, 99.5 per cent of people are unaffected. It doesn’t come into play until after the next election. But, at the end of the day, we’ve got to make the system sustainable. We inherited a budget from Peter and his crew, which was a trillion dollars in debt and there was nothing to show for it and we need to be responsible and that’s what we’re trying to do.
KARL STEFANOVIC:
It was a gift for you, Pete, this week. You’ve got your super wealthy Tesla driving Teal supporter base back?
PETER DUTTON:
Well Karl, I mean, you broke the story on the Today show with that train wreck interview with Jim Chalmers. Richard’s reading from the old talking points there when he talks about a ‘minor change’. It was a tweak, as you pointed out, and the ‘sheik of tweak’ old Jim Chalmers let the cat out of the bag. That was what happened. Just a little tweak. Just a tweak!
As it turns out, it’s not 80,000 people, it’s hundreds of thousands of Australians. Even if you’re 25 years of age with the $3 million not being indexed, in today’s dollars, it’s a cap of about $1.2 million. The government’s making it up on the run. It now turns out that they want to tax unrealised capital gains. So, if your shares go up in value, they want to tax you on the profit before you actually sell the shares – which is unbelievable. I just think it continues to go from disaster to disaster for the government. You can’t promise people, you can’t as a Prime Minister, look people in the eye and tell them one thing and do the complete opposite when you get into the job. I think that is a broken promise writ large.
KARL STEFANOVIC:
I do want to pull you up on that point, not the sheik of tweak, which was a fairly good line. But I do want to pull you up on that point, Richard, if you can. Can you explain this to me? How are you going to tax the increased paper value of an asset that hasn’t been sold?
RICHARD MARLES:
Well, this is a tax in respect of earnings. And so, you know, it’s a detail which goes to that question and I think for particularly people in self-managed super funds. But let’s be clear, this does not apply unless you have more than $3 million in your superannuation fund. So, what Peter has just said there is absolute rubbish…
KARL STEFANOVIC:
But Richard, sorry Richard…
RICHARD MARLES:
There’s a whole lot of smoke and mirrors that he’s trying to put around this…
KARL STEFANOVIC:
I know it’s a technical question, but again, how are you going to tax the increased paper value of an asset that hasn’t been sold?
RICHARD MARLES:
Well, as I say, this goes to the question of earnings in super funds with more than $3 million and the way in which that’s put in place. That is the issue here. This applies to a small number of people and what Peter has said in terms of trying to make this seem like it’s a broad thing which applies across the economy, I mean, it’s the smoke and mirrors which you will hear from the Opposition time and again. But this is only applying to a small number of people and at the end of the day, it is a modest change and it’s a modest change which we need to put in place to make this system sustainable.
KARL STEFANOVIC:
Just one more time – how are you going to tax the increased paper value of an asset that hasn’t been sold? If you don’t know, it’s okay.
RICHARD MARLES:
Well, a process will be worked through to work out what the earnings are on an ongoing basis.
KARL STEFANOVIC:
Pete?
PETER DUTTON:
Richard, you’re the Deputy Prime Minister. You’re on the Expenditure Review Committee. You were there for this conversation. You agreed to this crazy plan which is going to cascade onto many other superannuants and there’s no question about that. So, I mean, if you don’t understand the detail, how on earth can the Australian public understand what it is you’re proposing here? It’s a pretty basic question.
RICHARD MARLES:
Well, I do understand the detail. I mean, there is a process that will be put in place to assess earnings in respect of those superannuants who have more than $3 million. Now if you’re in a self-managed fund that’s going to require a process for that to occur. In terms of…
PETER DUTTON:
Where else in the tax system do you tax somebody on a profit that they don’t actually make; that they don’t realise? They don’t sell the asset and your taxing them before they realise the profit? So, where else in the tax system does that happen?
RICHARD MARLES:
An assessment is going to be made in relation to super funds and their earnings so that there is a tax applied to those earnings and that is what will occur. Again, what you’re now talking about goes to people who are in self-managed super funds and a process will occur in order to enable that assessment to be undertaken on an ongoing basis. But again, this doesn’t apply unless you’ve got $3 million in your super…
KARL STEFANOVIC:
Ok.
RICHARD MARLES:
…and there is a very small number of people who fit that category.
KARL STEFANOVIC:
I’ll let you try and come up with a better explanation to that at a later date, like Jim Chalmers did the other day. We’ll move on. Peter, this has put a little bit of a spring in your step. They’re saying now the Victorian seat of Aston, it might be now a chance for you. Are you going to take Stuart Robert down there to help campaign?
PETER DUTTON:
Well, I was down there with Roshena Campbell yesterday, who’s a great candidate…
KARL STEFANOVIC:
Not Stuart Robert?
PETER DUTTON:
…She was door knocking the day after she was elected. Well, Stu’s very busy, at the moment. So, he’s at the Royal Commission and whatnot, he won’t be able to make it down there. But I think the obvious thing to point out, Karl, is that in Aston, if you want to send a message to the Prime Minister, there’s a by-election coming up on the 1st of April, you can do that.
Just walking here this morning, a couple of joggers pulled up, you know, just average punters who said: ‘don’t let them touch our superannuation’. The risk that this sends and the uncertainty that it creates across the market is really very significant. I don’t think the government realises that and you’re meddling with something that’s really important to people and when Labor run out of their money, they come after yours – and that’s exactly what’s happening now.
KARL STEFANOVIC:
Richard, Peter – on another note, too – caused almost World War III this week, from a diplomatic point of view, with the Old Dart, writing off the British subs. I just want to make sure this morning that you are still committed to those dodgy British subs or are we going to go for US subs? Are you going to have a change of heart there?
RICHARD MARLES:
Well, I can assure you one thing, there’s not going to be any change of heart based on anything that Peter is saying. The pathway that we’re about to announce will be there for all to see…
PETER DUTTON:
We only negotiated AUKUS, Richard.
RICHARD MARLES:
But I’m a bit confused, Peter. I mean, I am confused now because on the one hand, you’re saying you’re going to support the government on whatever it does, and on the other you’re trying to tell us exactly what we should do. So I mean, I think there is a very simple question. When we announce the optimal pathway in a very short period of time, is the Opposition going to support it or not?
KARL STEFANOVIC:
You know, Richard…
PETER DUTTON:
Yes, we will.
RICHARD MARLES:
I’ve listened to what Peter’s said over the…
KARL STEFANOVIC:
Richard, at the end of the day, I know how to resolve this…
RICHARD MARLES:
Well, then I don’t get what the commentary’s been.
KARL STEFANOVIC:
I know how to resolve this. According to newspaper reports this morning, you’ve got a new $800,000 office that you’re not going to move into. So, I reckon let Peter do all of his, you know, his subterranean defence, you know, collecting his mail instead of those three star generals, just let him go for it in that very clandestine defence portfolio. Are you going to use that office?
RICHARD MARLES:
No. I have a very modest office at Russell which I think is important…
KARL STEFANOVIC:
Agree.
RICHARD MARLES:
…so that I’m actually present in Defence and I’m not going to be in that office, that is going to be used for someone else.
KARL STEFANOVIC:
Alright, guys, good to talk to you today. Appreciate it. Thank you.
[ends]