Federal Government about to ruin superannuation tax reform plan Superannuation Minister Bill Shorten faces growing concern in the electorate about more changes to the tax treatment of super. Picture: Brad Hunter Source: The Australian HERE we go again. A politically tone-deaf Government is about to stuff up another worthy tax reform and turn back the clock on the issue by another decade. Watching this Government try to design and sell its policies is like watching a slow-motion, multi-car pile up. Over. And over. This lot couldn't sell a life raft on a sinking ship. The current debate about upping taxes on the superannuation of high income earners in the May Budget reminds me eerily of the mining tax shemozzle. Just as there was a valid case to be argued in 2010 that Australians deserved a fairer share of their mineral wealth, there is also a valid case that tax breaks for the fabulously wealthy could be tightened to fund important investments in kids' education and disability care. Just as economists agreed taxing minerals was an efficient way of raising revenue, many now agree that tax concessions on super could be better targeted. Surveys have shown Australians eventually came around to the idea of taxing our mineral wealth, with support at about 70 per cent. And the truth is, there is a strong argument for looking at the way we tax super. The current system was born two decades ago, before anyone had any idea how big super would become. The nation's collective retirement nest egg has grown beyond all expectations to more than $1.5 trillion dollars. In the process, the government has created an entire industry, the super industry, which earns a comfortable living charging fees to manage our retirement savings. The industry is up in arms at the thought this honey pot for fees may grow more slowly. Just as the miners mounted a concerted campaign against the mining tax, the super industry is mobilising with a campaign of fear and misinformation. The debate has turned toxic. And the Australian public faces being potentially robbed of yet another valuable source of revenue to fix a bleeding budget. Treasury has identified super tax breaks as the biggest source of lost revenue to the budget - even bigger than the exemption of the family home from capital gains tax. Because super is taxed at a low flat rate of 15 cents in the dollar, it delivers a big benefit to high-income earners that would otherwise pay a much higher tax rate. Really, all the Government is looking at is cracking down on tax breaks enjoyed by the rich, which, with the budget in the red, we can no longer afford. We need money to pay for the things we want, like education and disability care. The reality of our progressive tax system is that we tax those who are best able to afford it and give it to those who need a helping hand. Australians have never begrudged helping a mate in need. The Government should be on to a winner - but it can't seem to stop itself framing every policy through a divisive "us" and "them" prism. Australians are sick of the class warfare. It doesn't reflect who we are. In Australia we don't have the sorts of extremes of wealth inequality that Bruce Springsteen sings about in the US. Although income inequality has been growing recently, social mobility - the idea that you can escape your upbringing - is higher here than in the fabled American land of opportunity. We may not be on $150,000 now, but we'd like to think we may be one day. As the super debate reveals, Australians today aren't simply workers or bosses. We are, through our superannuation, all the owners of capital in our economy. We are directly invested in the future health of our economy. The Government has somehow made people feel they will be punished for getting rich. But the reality is that if you grow wealthy, you can afford to give back a little to support others less fortunate. The wealthy already do that, paying the lion's share of overall taxes. The Government should be appealing to our better angels and our sense of philanthropy that the well-off can afford to contribute to funding meaningful reforms to help the poorest in society. But in its haste to plug a budget hole, it is preparing to launch yet another complex policy change on an unsuspecting and deeply suspicious public. It's policy on the run. Read 'em and weep: Grocery Watch, FuelWatch, the alcopops tax, the mining tax, a national broadband network with no cost-benefit analysis, digital set-top boxes for pensioners that cost more than in the shops, the change of mind on a carbon tax, the pink batts, the so-called "Malaysian solution." And this from a Government that promised "evidence-based decision-making." Sure, this Government has done good things. It acted quickly to keep the economy ticking away during the global financial crisis. It has boosted education funding, introduced Australia's first paid parental leave scheme and boosted wages for childcare workers. But the policy debris is almost suffocating. A member of the Henry review tax panel once told me this Government has, with its ham-fisted response to its own tax review, killed all hope of major tax reform in this country for a decade. Make that two.