Thursday, 17 March 2016
This was the Member for Warringah, Tony Abbott, in the Australian Financial Times on 9 March 2016:
On Friday, Tony Abbott said one of Labor's "five new taxes" included a housing tax (negative gearing), a wealth tax (capital gains), a seniors tax (superannuation), a workers tax (smokers), and the carbon tax.
"Five new taxes is what Bill Shorten has in store should Labor win the next election”…..
There it is, another three-word slogan – “five new taxes”.
So where are these five new taxes?
Negative gearing is a tax concession not a tax charge and Labor does not intend to eliminate this concession for all existing negatively geared investments or future new housing stock – the concession will be removed only on any future investment purchases of old housing stock after 30 June 2017.
Capital gains tax already exists so it is not new. The existing discount subsidy on this tax will be halved under a Labor Government on 1 July 2017. However, all investments made before this date will not be affected by this change and will be fully grandfathered and this policy change will also not affect investments made by superannuation funds. The CGT discount will not change for small business assets. This will ensure that no small businesses are worse off under these changes.
Superannuation is already taxed at certain points of accumulation. Labor is proposing to make this tax fairer by discouraging its use for estate planning/tax avoidance by people with very large incomes by realigning super tax concessions i.e. lowering the High Income Superannuation Contribution (HISC) threshold to $250,000. Around 110,000 people will be affected by the new arrangements. It will also reduce the tax-free concession available to people with annual superannuation incomes from earnings of more than $75,000. From 1 July 2017, future earnings on assets supporting income streams will be tax‑free up to $75,000 a year for each individual. Earnings above the $75,000 threshold will attract the same concessional rate of 15 per cent that applies to earnings in the accumulation phase. This measure will affect approximately 60,000 superannuation account holders with superannuation balances in excess of $1.5 million......To ensure that similar concessions are reduced for defined benefit superannuation schemes, Labor will also remove the 10% tax offset for defined benefit income above $75,000, estimated to effect approximately 9,500 account holders.
Tobacco taxation already exists so it also is not new, but the tax percentage will change if Labor wins government. Resulting in a price increase on a packet of cigarettes of an est. $10 spread over four years.
Carbon tax does not exist currently – in fact the previous Labor government's carbon levy was scheduled to end in 2014-15 as it moved towards the then legislated change to a market-driven carbon pricing mechanism. In 2014 a newly elected Abbott Government abolished this national emissions trading scheme. To date Labor has not announced details of its new climate change policy except to point out that it intends to implement an emissions trading scheme which will not be a tax.
Five new taxes planned under Labor? Er..... more like no new taxes in these five instances identified by Tony Abbott in full election campaign-mode.