Chalmers and Bragg spar over $3m super tax

Treasurer Jim Chalmers is maintaining politicians will be captured by the $3 million super tax, labelling commentary to the contrary as lies.

Liberal Senator Andrew Bragg has copped heat from Chalmers over his claims that the Division 296 tax changes won't impact politicians with specific defined benefit arrangements that pre-date 2004.

Chalmers has maintained that politicians, no matter whether they're members of the Parliamentary Contributory Superannuation Scheme, will be subject to the tax, saying the government did a lot of work to "make sure that defined benefit was appropriately represented in the changes."

However, Bragg claims the legislation does not cover the Prime Minister or other ministers.

While Chalmers is adamant there will be no exemptions, Bragg has said that while the legislation would allow for the government to apply the tax to the Prime Minister and other ministers, the actual bill itself does not.

"There is provision for defined benefit schemes, there are calculations, those calculations are very similar to the ones that the Liberals and Nationals put in when they changed superannuation in the last term of the government, and that will apply to the Prime Minister, it will apply to any politician who's got the equivalent of more than $3 million in super," Chalmers said.

"... we're still providing concessional tax treatment for people with big balances in superannuation, it's just slightly less concessional, but it's concessional compared to the marginal rate that people would be paying."

Bragg claimed there was a "howling conflict of interest" in having the Treasurer set the Prime Minister's pension arrangements and called for Chalmers to include the detail of the Prime Minister's scheme and calculation methodology in the bill.

In response, Chalmers said this is "one of the reasons nobody takes [Bragg] seriously because when it comes to the Prime Minister, his pension's not yet known."

He reinforced again that the tax will only apply to a very small proportion of retirees, however this has also been challenged, with many commentators pointing out that lack of indexation will see more and more Australians captured by the regime.

Modeling by AMP deputy chief economist Diana Mousina demonstrated a 22-year-old today who earns an average income throughout their working life will have more than $3 million in super upon retirement when assuming inflation and 3% annual wage growth.

The government has maintained that just 0.5% of the population will be impacted.