Labor’s new super tax is bad policy and bad precedent. The Coalition will continue fighting it every step of the way.

This tax isn’t just unfair; it breaks with every prior tenet of a just and balanced taxation system. For the first time in our country’s history, Labor wants to tax unrealised capital gains – profits that exist solely in theory, not bank accounts. This is not a ‘First’ to be proud of. It’s governmental overreach that will mean families, farmers and small business owners will be taxed on money they don’t even have.

This sets a dangerous precedent for future reforms.

Australians have always been taxed on real income. Money that actually exists and is available to spend, save or invest. So why the hasty push for change from a desperate Treasurer? At its core, the reason is simply to make life easier for the big super funds to administer the change. With an ocean of budget deficits stretching as far as the eye can see and mountains of unrealistic promises sold into the Australian public at the last election, the Treasurer needs cheap fixes to stop the budget haemorrhage.

While the $3 million balance threshold might make for easy sound bites professing to ‘tax the rich’, the reality is far more nuanced. Multitudes of family farms, start-ups and small businesses hold land or business premises in super as part of their retirement planning. They’re asset-rich but cash-poor. And every one of these examples built their funds within the parameters of the laws of the day.

Under Labor’s plan, they’ll be hit with tax bills based on rising land values – even if their business or farm is struggling and they haven’t seen a cent of actual income. For some, it could mean walking away from the family business after generations of careful planning. Not quite the ‘tricky rich folk’ portrait that Labor paints of those affected.

Unlike the super balance cap, Labor’s $3 million threshold isn’t indexed, meaning more Australians will be dragged in every year. People like teachers, tradies and professionals who’ve done the right thing by working hard and contributing responsibly to their super balance throughout their working life.

The government claims fewer than 80,000 Australians will be affected – but that figure is taken from previous financial year data and provided purely for catch phrase purposes. Because the threshold isn’t indexed, that number will grow rapidly. By the time younger Australians retire, millions will be caught.

I acknowledge that Labor says they’ll consider raising the threshold in the future. But if that’s the plan, why not just index it now? Put simply, by freezing the threshold Labor can make the budget look better on paper. It’s no more than accounting trickery in an attempt to cook the books in the face of the impending decade of deficits.

We’ve also learned Jim Chalmers has included a sneaky clause that gives him the power to single-handedly expand the tax after the Bill passes. That’s not the transparency the Government promised and smacks of political hypocrisy. Make no mistake, this clause gives a green light for additional taxes down the track, without the due diligence of parliamentary debate or committee scrutiny.

When Labor runs out of money, it comes after yours. And this clause is a trojan horse.

The Coalition believes in aspiration, in reward for effort, and in a super system that encourages responsible saving for your own retirement. We believe in supporting generational farmers, small business owners and entrepreneurs and we recognise their contributions to our economy.

As an opposition, we want to work constructively with the new Government on reform that is good for Australians and our economy. But it is our job to call out policy that doesn’t meet that criteria. This hastily conceived tax does not represent the interests of the Australian people, but rather the interests of a Treasurer in trouble.