Interview with Tom Connell, Sky News Regional

TOM CONNELL: Well, each week, Shadow Finance Minister Jane Hume and Assistant Climate Change and Energy Minister Jenny McAllister face off and fire up on the big news and political developments. Jane, Jenny, welcome. Of course, it's a truncated version. We'll start with you, this week, of course, you both get an opportunity to fire up on what you'd like to. Jenny, how would you like to kick things off?

JENNY MCALLISTER: Good morning. Well, I'm actually joining you from Tokyo and over the coming days, I'm going to be engaging with counterparts from Japan, but also around Southeast Asia about the arrangements we'll put in place together as we head towards net-zero. We've always said that the world's climate emergency is Australia's jobs opportunity and this is a really important opportunity here in the next couple of days to talk with other countries in our region about the economic opportunities that lie ahead for Australia and for Australian businesses.

Now, it's been an important part of the domestic agenda. It mattered that we legislated our targets and it matters that in the coming weeks we'll put in place clear and certain arrangements to businesses so they understand what their carbon reduction obligations are. That, of course, has been welcomed by business groups across the spectrum. The only group of people who are actively opposing it, of course, are the Liberal Party. We had ten years of denial, delay and dysfunction when it came to climate and energy policy and unfortunately, in opposition, the Liberals do not appear to have changed. It's a missed opportunity and it's a shame but we're getting on with the job.

TOM CONNELL: All right. Jane can't possibly think what you might be fired up over this week.

JANE HUME: It's been a pretty bad week, I think, for Jim Chalmers, Tom. First of all, his national conversation on superannuation was cut short by Albo, who pushed him out with an overegged but undercooked super policy, which was a blatant lie, a breach of faith for the Australian public. Second of all, Jim opened the door to capital gains tax on the family home. That went well, Albo had to come out and clean up that mess as well. Poor old Jim was out there with his tail between his legs, certainly a chastened man at a press conference. This whole debacle has essentially opened up internal rivalries between inside the Labor party. 

And in fact, I think that Jim probably went out there and kicked the cat because who's been absent from the debate this week? It's none other than the Coalition's favourite Labor Minister, Assistant Treasurer Stephen Jones. Stephen Jones, often wrong, but never in doubt. The self-opening piñata of the Labor party was clearly told to stop talking about superannuation and just talk about what he knows. Narrow guardrails indeed. 

So this has been a very bad week indeed, but can I give Albo some advice? Because there is one Labor Minister that knows more about superannuation than any other. More than Jim Chalmers. More than - certainly more than Stephen Jones and more than Anthony Albanese. And I'll bet that she hasn't even been part of these policy deliberations, Jenny McAllister, where are you when Labor needs you? I don't even think you've been in the room for this development of this policy, and yet we know that you could do a much better job. So my message to Albo is, time for that reshuffle - Stephen Jones, Jim Chalmers out, Jenny McAllister in.

TOM CONNELL: We have one panellist asking for a promotion for the other, but Jenny's far too humble. I can see her shaking ahead. I'm disappointed, though, Jane, we had Stephen Jones on the programme. You must have missed that edition of Newsday. We'll send you a clip. Let's run through what the debate was like this week, though, Labor maintaining this is not a major change and it won't come into effect until the 2025 election has been held as well. The opposition saying it's still a broken promise. Let's jump off on the indexation, Jenny, because the current arrangement for the tax-free element is indexed, but the 30 per cent at 3 million is not indexed. Why not?

JENNY MCALLISTER: Look, there's a range of different arrangements in the tax system for indexation. You'll know, for example, that income tax is not indexed. We've picked $3 million as the benchmark because we think that that is more than enough for a comfortable retirement. And certainly, it exceeds the benchmarks that have been established by the major industry groups. 

The truth is that this is a modest change. It will affect a very small group of superannuants and even those superannuants will still receive tax concessions, just not as generous as the ones that they receive at the moment. The truth is that the budget we inherited has a very significant amount of debt. Interest on that debt is one of the fastest growing areas of expenditure in the budget. We need to take responsible steps to repair the budget, and this is one of them.

TOM CONNELL: The interesting part about this, Jane, is the Coalition is just voting no. There's no sort of amelioration, because in opposition, you can look at a bill and say, we don't like that aspect, we'll change it. So that means you entirely back, say, that 32 super accounts with $100 million plus getting very generous tax concessions. That seems fair to you?

JANE HUME: Well, it's not those accounts that we're concerned about, Tom, and it's in fact not just the 88 or so thousand people that are going to be caught up in this net. And let's remember that it was only 34,000 last week or 36,000 last week. This week it's 88,000. And now we're hearing that in fact, half a million Australians are going to be caught up in this net because that cap is an index. It's an intentional trap so that more and more people will fall into the net of double taxation on their superannuations.

TOM CONNELL: So why not just say "alright, index it?" If that's the big problem, index it. Say "we'll support it but index it." Why not put a change up?

JANE HUME: I 100% agree. Let's index it. Let's make sure that it's indexed. Let's make sure that we're not taxing unrealized capital gains. Yet another thing that hasn't been thought through. 

TOM CONNELL: So will that amendment be move in the Senate?

JANE HUME: Let's make sure that amendment dealing with poor people that have been saving away forever in a day, those in self-managed superfunds. What about those people that have already walked away with their superannuation? Are we going to start taxing them as well? This is actually opening - it's so badly thought out, this policy. It is so undercooked, and yet they're out there trying to sell a dead horse. I don't even think it's going to get off the ground. We know, too, that without -

TOM CONNELL: Okay, so just on that, Jane.

JANE HUME: If it wasn't indexed - sorry, if it was indexed, it wouldn't raise anything like the amount of money that they're talking about.

TOM CONNELL: So would you be moving such amendments in the Senate, for example, move to index it as a - when you get the opportunity?

JANE HUME: Oh, I'm absolutely certain it will be moving all sorts of amendments to this because this is really bad legislation - it's going to be bad legislation and we're going to have to try and make a silk purse out of this sow's ear. But we simply can't back it. Most importantly, because it's a broken promise. It's a lie. They said to you before the election they would not change super, they would not increase taxes. They're doing both. So what's next? We can't support a lie.

TOM CONNELL: All right, pointy question coming up, Jenny, but Jane has endorsed you as the superannuation guru, so taxing notional gains. There's no other tax that does this, even the 15% tax on super. So why is Labor moving to tax notional gains? And can you be upfront and say that might mean wealthier people need to sell, for example, an investment property as part of their superannuation portfolio?

JENNY MCALLISTER: Look, I'm not really accepting Jane's endorsement about my role. I'm very confident about the role of all of our finance and economic portfolio spokespeople and actually very happily occupied in the role I occupy at the moment. However, on the specific question that you ask about the taxation of unrealised capital gains at the moment, self-managed super funds need - the trustees need to report and make a valuation of their assets to the Tax Office. That's not changing. It'll be the Tax Office, as they do now, that's responsible for making that assessment.

TOM CONNELL: But not pay a tax on it each year?

JENNY MCALLISTER: Sorry, the earning - the value of the asset is and then the earnings associated with it, that will be worked through with the Tax Office.

TOM CONNELL: But the paper that has been released says that what will happen is whatever increase that asset has. So if an investment property goes from $500,000 to $600,000 in value, that's $100,000 that account has earned. That's considered earnings, and you pay tax on that. Are you comfortable with that? Or is that you saying that - 

JENNY MCALLISTER: That is a point of detail that you will need to take up with the Treasurer. I'm here in Tokyo working with colleagues around energy transition questions. But the broad point is this, that it's a very small group of people who have assets at $3 million. It's half a percent of the Australian population, and honestly, these are not average Australian balances. Now, well done on people who've managed to accumulate $3 million. That's terrific. But we do need to tailor our tax support for those parts of the community that need it most. This is a really modest change, but it does make some important impacts on the budget going forward, and it's a step that we think is reasonable and we're happy to put it before the Australian people.

TOM CONNELL: Jenny, we know you've got a very tight schedule over there in Tokyo. We'll let you get away. I'm sure it's work and it's not nigiri and Sake, but maybe you'll fit a time for a little bit of that. Because when in Tokyo you're shaking your head. It's okay. I know it's hard work over there as well. But we'll let you go because we know you're very tight.

JENNY MCALLISTER: It's a fairly busy program, Tom.

TOM CONNELL: Yes. No, I know it is. It's tongue-in-cheek. Don't worry, we'll let you go.