00:00For two years, the government has argued that its proposed changes to the way that it taxes
00:08multi-million dollar super funds were necessary to make the system fairer. However, this ambitious
00:15plan was criticised for two key reasons. The first is that its original threshold for earnings
00:22above $3 million would not be indexed to keep up with inflation. And the second was that
00:28it applied to unrealised gains. So unrealised gains are effectively assets which have increased
00:35in value over time that you haven't cashed in yet. And that could maybe be a property,
00:39a farm or a really expensive painting. And the idea was that both of these measures would have
00:45boosted the amount of revenue that the government would have to spend on essential services for the
00:50public, things like hospitals or public schools. But after months of advocating for these changes
00:56to the super tax system, the government has now backpedalled. Instead, it has agreed to index the
01:04$3 million threshold to keep up with inflation. And that means that fewer people will be captured
01:11by this policy over time. It's also scrapped plans to tax unrealised gains as well. So while the
01:20government has certainly been talking a big game on changes to the tax system, this proposal doesn't
01:27go as far as the original. And it also means that the government will have less money to play with
01:31compared to what was previously anticipated. And Treasurer Jim Chalmers has defended the changes
01:37today. What's he said in response to some of this criticism? That's right. So the Treasurer has been
01:44really eager to highlight some other elements of this super tax plan. And that involves plans to increase
01:52the low income superannuation tax offset from $500 to $810 for people who earn less than $45,000 a year
02:02by 2027. So the short version of that is that this means that some of Australia's low income earners,
02:10earners, some of the poorest, will receive $15,000 extra in retirement. So that's great news for
02:18them. As for the more controversial elements around indexing and unrealised gains, the Treasurer Jim
02:25Chalmers says that those changes were made following conversations with the Prime Minister and other
02:30stakeholders over time. Here's what the Treasurer had to say earlier.
02:34Prime Minister and I have had a number of conversations over recent months about finding
02:38another way to deliver on the objectives of our policy. And our objectives here are a super system
02:46which is stronger and fairer and more sustainable. And even with these practical and pragmatic changes
02:52that I announced yesterday, this means another way to satisfy those objectives. It means a better
02:58outcome for people on low incomes. It means better targeted superannuation concessions for people
03:04with millions of dollars. It means a fairer superannuation system from top to bottom.
03:11So while Jim Chalmers insists that this new tax system still reigns in generous tax concessions for Australia's
03:18wealthy, the reality is that the government has watered down its original proposal and one that it took to the election,
03:25which it won with a thumping majority. So while many have lauded these changes, the government still needs to win over the support from the Greens,
03:33who aren't impressed. They say that these changes essentially are a win for some of Australia's richest and it also needs to win over the support of the coalition who hasn't formally announced their policy position on this yet, but it is likely that they will support these concessions.
03:51Samantha, thank you.
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