The treasurer, Jim Chalmers, has defended potential superannuation changes, asking Australians to consider “whether we can afford” to keep giving large tax concessions to the small number of wealthy people with multimillion dollar balances.
While insisting the Albanese government had made no firm decisions yet, Chalmers claimed it was “not especially controversial” to re-evaluate how tax concessions flowed to people with the highest super balances.
“We should be capable of a conversation that says we’re not proposing major changes to superannuation. We haven’t taken any decisions yet but this is an area of concern to us,” he told Sky News on Sunday.
But the opposition’s Treasury spokesperson, Angus Taylor, maintains the Coalition will fight any changes, even as the government tightens its focus to reassessing tax breaks for the fattest 1% of super accounts.
Chalmers and the prime minister, Anthony Albanese, have stoked discussion about superannuation settings for a week, raising concerns about the sustainability of the retirement policy and sharing details that the cost of concessions for voluntary contributions will soon rival that of the aged pension.
While senior ministers say no decision has been reached, debate has narrowed to the concessions for superannuants with more than $3m in their accounts. Less than 1% of Australians have that much in their accounts; the average Australia has about $150,000.
Voluntary contributions to super are taxed at much lower rates than income tax, to incentivise people to save extra for their retirement. The superannuation minister, Stephen Jones, said the government wasn’t planning to cap the total balance, only to limit the amount that could be accumulated under those more lucrative tax concessions.
The Coalition opposition and crossbench members representing wealthier electorates have criticised the proposal, noting Albanese promised no “big changes” to super before the election. But Chalmers backed the government’s stance.
“We care about it [superannuation], we want to invest in it, we want to make sure that it delivers a decent retirement for people,” he said.
“So the fundamentals won’t change, the tax concessionality will still be there. But we do need to consider whether we can afford the degree of tax concessionality for people who’ve got very big balances.”
The energy minister, Chris Bowen, told ABC’s Insiders on Sunday that the government wanted to make super more “equitable”, calling it a “sensible discussion”.
The Coalition has pledged to oppose any changes.
Also speaking to Sky, Taylor raised his concerns that the government would make wide-ranging super changes, claiming it was “just the beginning”. The same argument was pushed by former Liberal prime minister, John Howard.
Chalmers denied those claims.
“I’m not interested in a war of words with John Howard. John Howard is someone who I respect and I think he deserves better than to be wheeled out to prop up Angus Taylor’s dodgy arguments or to shore up Peter Dutton’s failing leadership,” he said.
Taylor denied Howard had been “wheeled out”, saying the former leader had spoken up “on his own volition”.
Greens leader Adam Bandt said he was open to considering superannuation changes, but questioned whether the government was “robbing Peter to pay Paul” to fund the stage three tax cuts, which will also overwhelmingly benefit higher-income earners.
The Coalition-legislated tax cuts, due to cost $254bn over 10 years, kick in from 2024. Bandt suggested any savings from super changes should go toward Greens-backed policies like adding dental to Medicare or freezing electricity bills.
“The government is flying a number of kites through the media … we’ll have a look at anything the government puts on the table and consider it in good faith,” Bandt said of the super changes.
Chalmers is in India attending a meeting of G20 finance ministers and bank governors. In an interview with broadcaster CNBC, he admitted the government was not able to do as much about Australia’s inflation problems as it would like, forecasting the rate would remain high for longer than the government would like.
Asked about the Reserve Bank governor, Philip Lowe, and the RBA’s controversial decision to jack up interest rates nine times in a row, Chalmers said they had a “difficult job”.
Chalmers said he believed Australia had passed the peak of inflation, which was 7.8% in the year to December, but admitted the outlook was not ideal.
“We certainly hope that that is the case. But inflation will be a bit higher than we’d like for a bit longer than we’d like in Australia,” he said.
Chalmers said the world faced “a very narrow and very perilous path” to avoiding widespread recession issues.