MARLES BACKS TECH SAFETY; SUPER TAX HIT

Marles assures defence partners on security levels

Deputy Prime Minister Richard Marles has defended Australia’s level of security in working with US military technology, ahead of increased co-operation through the AUKUS partnership. The Defence Minister said the levels of security that existed now within Defence were of the highest degree, in response to reported concerns within the US Congress over Australia receiving US technology. Mr Marles said Australia’s requirement of a nuclear-powered submarine capability would involve a significant hardening of security in both the physical sense (such as buildings and fences) and in the IT sense. He said he believed there was a “high degree of confidence” within both the US and the UK about Australia’s ability to increase security.

Treasurer follows through on higher tax rate for superannuation

A week after flagging potentially higher taxes on superannuation balances above $3 million, the Federal Government has confirmed legislative changes to apply to the superannuation threshold. From 2025-26, the concessional tax rate applied to future earnings for superannuation balances above $3 million will be 30 per cent, not 15 per cent. Treasurer Jim Chalmers said the proposed changes – subject to legislation – would affect around 80,000 people, or about 0.5 per cent of superannuation fund members. He said the changes would generate around $2 billion in revenue in its first full year, once the legislation took effect.

CGT exemptions, superannuation head list of tax breaks

Meanwhile, superannuation tax breaks are worth about $50 billion a year, according to the latest Tax Expenditures and Insights Statement released by Federal Treasury. The statement, which Treasurer Jim Chalmers said was required by the Charter of Budget Honesty, estimated revenue foregone from tax expenditures, such as deductions, exemptions and concessions. Capital gains tax exemptions relating to the main residence accounted for $48 billion, with rental deductions worth about $24.4 billion. According to the Treasury paper, CGT discounts for individuals and trusts amounted to almost $23.7 billion. Dr Chalmers said more than 55 per cent of the benefit of superannuation tax breaks on earnings flowed to the top 20 per cent of income earners.

Economy still growing, but investment falling

Australia’s economy grew just 0.5 per cent, seasonally adjusted, in the December quarter, as sustained inflation and lower investment levels eroded GDP growth rates. Latest figures from the Australian Bureau of Statistics show that net exports and household spending helped to keep the economy in positive territory, as private investment fell. For the 2022 calendar year, the economy grew by 2.7 per cent; economic growth rates, however, have fallen over the last three quarters. While goods inflation eased as supply chains recovered, services inflation remained strong, affecting costs of employment. Meanwhile, the ABS reported separately that the monthly Consumer Price Index indicator showed annual inflation of 7.4 per cent to the end of January, fuelled by near double-digit price rises in housing costs.

Minerals exploration jumps to meet energy transition demand

Investment in mineral exploration in Australia soared by 28 per cent to a near 10-year high of $3.6 billion in 2021, according to a Federal Government report. The Australia’s Identified Mineral Resources report for 2022 shows that Australia remained the world’s top producer of iron ore, bauxite, rutile and lithium. Resources Minister Madeleine King said that Australia had strong reserves of minerals required for domestic and global energy transition, with the world’s second-largest reserves of cobalt, lithium, tungsten and vanadium. Ms King said that traditional metals such as aluminium, nickel and copper were also vital to energy transition.