AUSTRALIA

As the Labor government settles into another term, there is much talk of a fight brewing between the Treasurer and the Australian accounting profession.

This is because Australians are sleepwalking towards a new tax that until now, has been waved away as only being relevant to the rich.

The Government calls it the ‘Better Targeted Superannuation Tax Concessions Bill’, which Parliament is set to pass later this year. When it does, earnings on super balances – including unrealised gains – that are more than $3 million, will be taxed an additional 15 per cent.

In the past few days there has been much public discussion about why this new tax is not just an issue for the wealthy. Taxing unrealised gains in super funds could see funding for the tech and start-up sector dry up, and force farmers to sell their tractors to pay tax on an income they are yet to receive.

And while the younger generation’s eyes may widen at the thought of a super balances above $3 million, AMP analysis shows that at least half of Gen Z will hit the $3 million mark by the time they near retirement in 40 years.

But what’s yet to be scrutinised is the impact of this Bill on women. And should I be surprised given how hard it has been historically to make gender equality a priority?

This Bill will further disadvantage women who are already on the back foot when it comes to superannuation, which is why I am calling it a ‘widow’s tax’.

Data from the Workplace Gender Equality Agency’s “Women’s Economic Security in Retirement” shows that women at retirement age have accrued on average 50 per cent less in superannuation than men.

This is because women are more likely to have broken work patterns as they are more likely to step away from work to care for children and often other relatives.

Then, when they return to work and try to catch up their superannuation, they are prevented by the annual super contribution cap.

This is why we have long advocated for the annual superannuation cap to be replaced with a lifetime cap to end the disadvantage women face when trying to increase their superannuation.

Alas, we are yet to see a sitting government make this vital change.

So, what does this have to do with the ‘Better Targeted Superannuation Tax Concessions Bill’?

Statistically women out live men by an average of four years according to the Australian Institute of Health and Welfare. AIHW data also shows that women on average also live without disability or infirmity longer than men.

This also means that women are statistically more likely to be hit with this tax through inheritance with little regard to the superannuation brake that has been applied throughout their earlier life when they stepped away from work to care for children.

Now I appreciate the example I have used is a traditional heteronormative case study to make this point.

There will also be Australians in same-sex marriages and relationships who will be unfairly impacted; surviving spouses, regardless of their partner’s gender, will suffer this tax hike too.

As the peak body representing Chartered Accountants across Australia and New Zealand, we are concerned this flawed policy will hurt many Australians while raising very little net revenue when all costs are considered. All pain, little gain.

That’s why we are calling on the government to scrap the ‘widow tax’ and start a conversation about more sensible and long-term tax reform.

We have repeatedly called for the Government to commit to a tax reform roadmap, one that examines the whole system and corrects the over-reliance on personal income tax, among other matters.

The Albanese Government has a special opportunity to use its second term of government for bold, visionary change. It shouldn’t be squandered by piecemeal tax policies which hurt everyday Australians.

It will take courage, but I have confidence this government can do it. The people of Australia have given you this opportunity – it is time to live up to it.