Unrealised capital gains tax threshold won't stay at $3m for decades: Chalmers
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The news: Treasurer Jim Chalmers has rebuffed suggestions that the government's plan not to index the $3 million mark over which superannuation accounts will be taxed on unrealised capital gains will mean the threshold remains at this level for decades.
Speaking to Sky News on Tuesday morning, Chalmers said it "wouldn't happen" that the threshold would remain unchanged by government for 30 or 40 years, despite not being indexed.
"There are a number of areas in our tax system where thresholds aren't indexed, where they are changed from time to time by governments, and I would expect that to be the case again," Chalmers said.
"It would be a strange assumption to assume that in the next 30 or 40 years nobody ever changes the threshold. That doesn't happen in other parts of the tax system, and it wouldn't happen in this part of the tax system over a period that long."
The context: The changes in the tax treatment of these large super funds is currently expected to affect 0.5% of the population. But it has faced fierce criticism from business, accounting and financial groups.
One of the concerns is that by not being indexed it will end up capturing a significant portion of the population over time.
Chalmers said that a change in approach in response to these concerns is "not something that you should anticipate, it's not something that we're considering or planning".
What they said: "I don't think it's particularly newsworthy that we haven't changed our policy on that [taxing unrealised capital gains]. We've made it clear that it's a very modest change, it only affects half a per cent of people with balances over $3 million," Chalmers said.
"It's still concessional tax treatment, just a little bit less concessional, and it's an important way that we fund some of our other priorities, including strengthening Medicare or providing income tax cuts, helping with the cost of living and building more homes. It's an important part of our Budget, we haven't changed our approach to it.
"We know that there are elements of the media that are very focused on it, but we haven't made a change there."
The source: Sky News
