In a stunning reversal, the Albanese government’s controversial plan to increase taxes on superannuation balances exceeding $3 million has been all but abandoned. Sources close to the prime minister suggest the backdown is driven by mounting concerns that the policy could expose Labor to a repeat of the politically catastrophic franking credits campaign that played a pivotal role in its 2019 election defeat.
As the clock ticks down to the next federal election, Prime Minister Anthony Albanese is said to be meticulously pruning Labor’s policy platform, discarding any proposals that could provide ammunition to the opposition. The superannuation tax hike, once a centerpiece of Treasurer Jim Chalmers’ economic agenda, appears to be the latest casualty of this strategic shift.
Fears of a Franking Credits Redux
Insiders suggest that while the proposed superannuation changes would have generated substantial revenue for the government, the political risks ultimately outweighed the potential fiscal benefits. Memories of the backlash against Labor’s 2019 franking credits policy, which would have curtailed tax concessions for retired shareholders, remain fresh in the minds of many within the party.
There’s a real sense of déjà vu around this superannuation policy. The wounds from the franking credits debacle are still raw, and no one wants to hand the Coalition another weapon to bludgeon us with come election time.
– Labor insider
Some of the key figures who orchestrated the campaign against Labor’s franking credits policy are reportedly gearing up for a similar offensive should the superannuation changes proceed. Faced with the prospect of history repeating itself, Albanese appears to have calculated that discretion is the better part of valor.
Legislative Limbo
In a telling sign of the policy’s waning prospects, the enabling legislation for the superannuation tax hike was conspicuously absent from a list of 37 priority bills circulated to senators ahead of the final scheduled parliamentary sitting day for the year. While the bill could theoretically still be added to the docket for the government’s planned legislative blitz, sources suggest it currently lacks the numbers to pass the Senate.
The prime minister’s reticence to expend political capital on the superannuation changes is said to be shared by others within the government. Despite the proposal originating from the treasurer’s office, there are growing doubts about whether the potential revenue gains justify the electoral risks.
Yes, it would bring in much-needed funds, but at what cost? We’re staring down the barrel of an election campaign, and the last thing we need is to hand the opposition a cudgel to beat us with.
– Government source
Prioritizing Political Safety
As the government scrambles to clear its legislative decks before Parliament rises for the year, the focus appears to be on shepherding through measures deemed politically essential or relatively risk-free. Bills relating to migration, electoral reform, privacy protections, and social media regulations for minors are among the 37 pieces of legislation earmarked for expedited passage.
In contrast, proposals that could invite political blowback or are not seen as electorally vital are being quietly shelved. In addition to the superannuation changes, the government has already withdrawn contentious legislation aimed at curbing online misinformation and disinformation. Plans for gambling reform have also been put on ice until after the election.
It’s all about minimizing political risk at this point. Anything that could give the opposition a free hit is being put on the backburner. The priority is getting through the must-pass bills and avoiding any self-inflicted wounds.
– Parliamentary insider
Bracing for a Bruising Campaign
With the next federal election looming larger on the horizon, the Albanese government appears to be transitioning into full campaign mode. Shedding politically risky policies like the superannuation tax hike is seen as a crucial part of armoring Labor against the coming electoral onslaught.
Government strategists are acutely aware that the opposition will seize on any perceived vulnerabilities or policy overreach. The specter of a re-run of the franking credits campaign, which successfully portrayed Labor as a party hostile to self-funded retirees and investors, weighs heavily on the minds of many within the party.
We can’t afford to go into this election carrying any unnecessary baggage. If that means sacrificing some policies, no matter how worthy they might be from a policy perspective, then so be it. The stakes are just too high.
– Senior Labor figure
As the pre-election jostling intensifies, the government’s decision to shelve the superannuation tax increase suggests a newfound caution and pragmatism within Labor’s ranks. Chastened by past electoral traumas and cognizant of the government’s narrow majority, Prime Minister Albanese appears determined not to concede any political advantage to his opponents.
While supporters of the superannuation policy may lament its abandonment, the cold electoral calculus of an impending campaign seems to have carried the day. As the battle lines for the next federal election begin to take shape, Labor’s retreat on the issue underscores the paramount importance of political risk management in the cut and thrust of modern electioneering.
