Federal Treasurer Jim Chalmers says the Albanese government will release “updated thinking” on reforming the superannuation performance test ahead of the federal budget on May 12.
The annual Australian Prudential Regulation Authority (APRA) superannuation performance test evaluates whether funds deliver appropriate investment returns. According to the regulator, it’s designed to hold super providers to account for “underperformance through greater transparency and increased consequences”.
Mr Chalmers told reporters in Canberra the update would be announced in the “coming weeks or days”.
“We have been trying to progress this work (on the superannuation test) for some time,” he said on Monday.
“I want to be really clear that I have absolutely no interest in watering down or ditching the performance test, so I see it as a really crucial part of the superannuation system.”
But he said the government had signalled a “willingness, privately and publicly” to reform the performance test in a way that didn’t diminish standards or super funds’ responsibilities to members.
“There is no consensus here on the best way forward in the discussions that we’ve been having with the sector for some time,” he said.
“We would prefer a consensus if one is possible, but at the very least, the paper that I’ll be releasing with (Assistant Treasurer) Daniel Mulino (soon) will give you an updated sense of our thinking here in the hope that we can try and get some people around one of the options presented in the paper.”
Chalmers, Gallagher tight-lipped on CGT
Earlier, Finance Minister Katy Gallagher avoided answering whether Labor was weighing up a return to the Keating-era capital gains tax (CGT) model, after reports suggested Mr Chalmers was in favour of scaling back the current 50 per cent discount rather than scrapping it altogether.
Nine Newspapers reported overnight that Mr Chalmers was leaning towards reverting the CGT discounts to its pre-1999 iteration, where it would only tax assets on their real rise in value, an approach that takes into account inflation.
This is unlike the current approach that applies a flat 50 per cent discount on nominal gains and was introduced by the Howard government in 1999.
A Greens-led senate inquiry found in March that the CGT discount skewed home ownership towards investors, disproportionately benefited wealthier Australians and distorted productive investment. This, alongside Mr Chalmers’ declaration that the May 12 budget will focus on addressing intergenerational inequity, has ramped up speculation the Howard-era settings will be scrapped.
But on Monday, Ms Gallagher refused to be drawn on the government’s deliberations, telling ABC’s Radio National: “The budget will be released in that second week of May, and that will have all the decisions the government has made.
“I mean, I think the Treasurer and PM have made it clear our tax policies haven’t changed. I think we’ve made it clear we want to focus on intergenerational equity.
“And so, you know, we’ve been clear about that, but the announcements around that will be made in the budget.”
Mr Chalmers took a similar line when asked about CGT changes, telling reporters: “We’re obviously considering a whole range of changes in the tax system, but we haven’t changed those policies.”
“We haven’t taken any decisions on those policies, whether they’re the specific ones you mentioned.
“There is more work to do on our options for tax reform in this budget, we have been really upfront for some time now in saying that we do think that there is intergenerational unfairness in the tax system and in the housing market.
“I think the housing market is where some of those intergenerational issues are most obvious, and so we are working through a range of options to see if we can deal with them or address them in a responsible way … we’ll have the opportunity to tell everyone all about it on budget night.”
Parliamentary budget office analysis commissioned by a Greens-led inquiry into the CGT discount found the concession would cost the budget $247bn over the next 10 years.
More to come
