{"id":153377,"date":"2025-05-27T17:44:08","date_gmt":"2025-05-27T17:44:08","guid":{"rendered":"https:\/\/websitedesigns.com.au\/elankanew\/?p=153377"},"modified":"2025-05-27T17:44:08","modified_gmt":"2025-05-27T17:44:08","slug":"noel-news-74","status":"publish","type":"post","link":"https:\/\/websitedesigns.com.au\/elankanew\/noel-news-74\/","title":{"rendered":"NOEL NEWS"},"content":{"rendered":"

NOEL NEWS\u00a0<\/b><\/span><\/h2>\n

\"NOEL<\/p>\n

“True leadership isn’t about being in charge,\u00a0<\/i><\/strong><\/span>
\nit’s about taking care of those in your charge.”<\/i><\/strong><\/u><\/u><\/span><\/p>\n

DAVID MELTZER<\/span><\/p>\n

Renowned broadcaster John Deeks and I discuss all the big topics covered in this newsletter in detail each month.<\/span><\/p>\n

\"NOEL<\/span><\/p>\n

Listen Now on Spotify<\/a><\/span><\/p>\n

Welcome to our June newsletter <\/strong><\/span><\/p>\n

The end of the financial year is hurtling towards us. Much has happened since my last newsletter \u2014 not least, the federal election. Labor scored a landslide victory, while the Liberals were nearly wiped out.<\/span><\/p>\n

But it does raise questions about the voting system. Despite the result, Labor secured just 34.6% of the national primary vote. The Liberal\u2013National Coalition managed 31.6%. That means two-thirds of voters didn\u2019t give their first preference to either major party. The combined primary vote for Labor and the Coalition fell to 66.2% \u2014 the lowest since the 1930s.<\/span><\/p>\n

\"NOEL<\/span><\/p>\n

It\u2019s a clear sign Australians are turning away from the major parties \u2014 and looking for alternatives. That makes policymaking harder to predict and potentially more volatile.<\/u><\/u><\/span><\/p>\n

Expect Labor to push ahead with its controversial tax on unrealised capital gains inside super \u2014 and to double down on policies like the shared equity housing scheme. But with the Greens and independents now holding even more sway, the pressure will be on for new taxes on wealth and further intervention in the housing market.<\/u><\/u><\/span><\/p>\n

We\u2019re in uncharted waters. Stay informed \u2014 and stay strategic. And remember: if you take care of the things in your life you\u00a0can<\/i>\u00a0control, you won\u2019t need to lose sleep over the things you can\u2019t.<\/span><\/p>\n

Taxing unrealised capital gains<\/strong><\/span><\/p>\n

Labor\u2019s proposed tax on unrealised capital gains in super is finally getting the attention it deserves, as more Australians grasp just how draconian the policy really is. It\u2019s a textbook example of unintended consequences \u2013 a slick-sounding policy with the potential to wreak financial havoc. It must have been an irresistible proposition: let\u2019s put a special tax on the rich; there\u2019s not many of them, and they don\u2019t vote for us anyway.<\/span><\/p>\n

\"NOEL<\/span><\/p>\n

Welcome to Australia\u2019s Animal Farm, where all super funds are equal, but some are more equal than others. Judges and public servants retiring on massive defined benefit pensions, often worth well over $3 million, have been handed a special exemption. Why? Because taxing them was deemed \u201ctoo hard\u201d \u2013 while everyone else above the cap is expected to pay up. The hypocrisy is breathtaking.<\/u><\/u><\/span><\/p>\n

The proposed tax is also a form of double taxation.<\/strong>\u00a0Under this plan you\u2019ll pay an extra 15% tax each year on the nominal increase in value of your super assets \u2014 even if you haven\u2019t sold anything. When you do sell those assets and realise a profit, you\u2019ll pay capital gains tax. And no, there\u2019s no credit for tax already paid on the unrealised gains.<\/span><\/p>\n

\"NOEL<\/span><\/p>\n

Labor have never made any secret about their hatred of self-managed super funds. Every dollar in an SMSF is one less dollar paying fees to the Labor-dominated industry super funds. But SMSFs let people hold assets not open to the big funds \u2013 business premises, farms, and commercial property \u2013 none of which can be sold at the click of a button. If taxes on paper profits force enough people to liquidate at once, prices will collapse; it\u2019s simple supply and demand.<\/u><\/u><\/span><\/p>\n

And make no mistake \u2013\u00a0Australians will respond.<\/strong>\u00a0Many I\u2019ve spoken to are already planning to restructure by gifting to children: helping them buy property, pay down loans, or invest. That shift \u2013 combined with likely interest rate cuts later this year \u2013 could fuel another property boom. It\u2019s the opposite of what the government claims it\u2019s trying to achieve.<\/u><\/u><\/span><\/p>\n

If this tax becomes law, it will also\u00a0impede innovation<\/strong>. Many tech founders launch start-ups through their super funds, and these businesses are often illiquid for years. Their perceived value can fluctuate wildly. Imagine a $1 million start-up growing to $6 million on paper \u2014 triggering a tax on a $5 million gain that may never be realised. If the valuation crashes to $3 million the next year, the fund is still taxed on money that never existed. Madness.<\/u><\/u><\/span><\/p>\n

And let\u2019s not forget the Laffer Curve:\u00a0<\/strong>the well-established principle that raising tax rates beyond a certain point actually reduces total tax revenue.\u00a0<\/i><\/span><\/p>\n

\"NOEL<\/span><\/p>\n

Push people hard enough, and they\u2019ll restructure, withdraw, or move their wealth offshore. So a tax designed to raise more money might end up collecting less.<\/u><\/u><\/span><\/p>\n

But the biggest danger is this:<\/strong>\u00a0it\u2019s a foot in the door for taxing wealth that doesn\u2019t exist. Once you accept that principle, no asset is safe.<\/span><\/p>\n

\"NOEL<\/span><\/p>\n

If it\u2019s okay to tax unrealised gains for someone with $3 million in super \u2013 or $2 million if the Greens get their way \u2013 what stops a future government from applying the same logic to investment properties? Or a share portfolio? Or a business? And then there\u2019s the family home. Right now, your principal residence is tax-free, even if it\u2019s worth $100 million. But it stands out like a beacon for any government desperate for cash and bold enough to grab it.<\/u><\/u><\/span><\/p>\n

Once that line is crossed, there\u2019s no telling where it ends. You may think this policy doesn\u2019t affect you, but to quote John Donne: \u201cNever send to know for whom the bell tolls; it tolls for thee.\u201d<\/span><\/p>\n

What to do now<\/strong><\/span><\/p>\n

\"NOEL<\/span><\/p>\n

For most people, the key message is: don\u2019t panic and sell assets willy-nilly. Provided your super balance is under $3 million per member on 30 June 2026, the new tax won\u2019t apply to you.<\/span><\/p>\n

A special case is those with large illiquid assets \u2014 such as farms or commercial buildings \u2014 held within an SMSF. In many cases, it may be worth obtaining a valuation as at 30 June 2025 at the highest justifiable value. This could reduce the size of any unrealised capital gain as at 30 June 2026.<\/span><\/p>\n

But there\u2019s always a paradox. A higher valuation now means a higher cost base, which could reduce your capital gains tax liability later if you sell. This is a complex area where expert advice is a must.<\/span><\/p>\n

Remember, only a portion of the fund is subject to the new tax. For example, if your super fund is worth $4 million and there\u2019s an unrealised capital gain of $300,000 in a given year, only 25% of that gain \u2014 or $75,000 \u2014 would be taxable. At the proposed rate of 15%, that equates to a tax bill of $11,250. That may be a better outcome than transferring assets out of super to another entity, which would likely trigger capital gains tax \u2014 and if real estate is involved, stamp duty as well.<\/span><\/p>\n

It all comes back to careful modelling of every scenario \u2014 including the possibility of gifting assets to family members before 30 June next year.<\/span><\/p>\n

Noel’s Next Presentation<\/strong><\/u><\/u><\/span><\/h2>\n

\"NOEL<\/span><\/p>\n

I\u2019m thrilled to advise that I\u2019ll be visiting\u00a0South Australia<\/strong>\u00a0to get talks next month.<\/span><\/p>\n

Topics will include:<\/span><\/p>\n