Joint Media Statement
A coalition of leading industry associations is calling on the Prime Minister and the Opposition Leader to immediately and unequivocally rule out any move to tax unrealised investment gains in any part of the tax system.
The call follows the Albanese Government’s failed attempt in the last term to introduce a new tax on unrealised superannuation earnings via the controversial Division 296 legislation – a proposal which remains official Labor policy.
With Australia’s debt projected to soar beyond $1.2 trillion, there are growing fears that other investments– including the family home, investment properties, private trusts, farms or financial instruments – could be next.
“Let’s be clear: taxing someone on paper gains they haven’t received a cent from is not reform – it’s confiscation,” the industry coalition said in a joint statement.
“It punishes aspiration, destroys liquidity, and turns volatile market movements into tax bills.”
The absurdity of taxing paper gains is laid bare with the recent turmoil in investment markets. It shows just how easy it is for a paper gain in one period to be wiped out in the next, leaving the investor with a tax bill for an investment gain they never received.
While both major parties have ruled out changes to negative gearing – recognising the political and economic damage such a policy would cause – no such commitment has been made on taxing unrealised capital gains. With Labor’s Division 296 legislation still on the table, the threat remains live and dangerous.
Division 296 isn’t just a bad policy – it’s a dangerous precedent. Once taxing unrealised gains becomes embedded in superannuation, it opens the door to expansion across the entire tax system.
Once you cross the line and start taxing gains that haven’t been realised, the entire tax system is up for grabs.
The risk is heightened by the likelihood of a hung parliament, which could see the government relying on Greens or independent MPs pushing for even harsher versions of the tax. The Greens, for instance, want to lower the threshold, dragging in thousands more Australians – including those who’ve simply had their superannuation grow over time.
International precedent is damning. Attempts to introduce similar taxes in the United States were scrapped after facing fierce economic and legal backlash.
Experts agree such taxes are unworkable, unfair, and damaging to investment, innovation, and long-term growth.
“Australia has a proud history of rewarding effort, enterprise, and prudent investment. A tax on unrealised gains turns that on its head. It punishes people not for what they’ve earned, but for what they might earn – and that’s a road no country should go down.”
The industry coalition is calling on both major parties to follow the precedent they’ve set on negative gearing: rule out any tax on unrealised gains, in any form, for any asset class.
The joint coalition of leading industry associations includes:
- The SMSF Association
- The National Farmers Federation
- The Council of Small Business Organisations Australia (COSBOA)
- The Family Business Association.