The Australian government has proposed a new superannuation tax that targets the wealthiest Australians. The “Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023” aims to apply an additional 15% tax on super earnings for balances over $3 million. This would affect about 80,000 individuals, or the top 0.5% of super holders.
Treasurer Jim Chalmers says the tax is about fairness. However, the bill has faced opposition from various groups, including the Coalition, business owners, and financial consultants. Former Reserve Bank Governor Philip Lowe and economist Ken Henry have also expressed concerns.
Chartered Accountants Australia and New Zealand have called the bill fundamentally flawed. The tax would fall under Division 296 of the Income Tax Assessment Act 1997. It would affect personal tax returns rather than the super funds themselves.
Proposed superannuation tax targets the wealthiest
Critics argue that this could lead to people being taxed on the paper value of their assets rather than actual realized income. The bill passed the House of Representatives but stalled in the Senate by early 2025.
If enacted, the measures would take effect from July 2025, with the Australian Taxation Office (ATO) starting to issue assessments a year later. Supporters argue that the tax is necessary to ensure superannuation serves its intended purpose as a retirement fund, rather than a vehicle for wealth accumulation. The government projects that it could raise $2.3 billion by the 2027-28 fiscal year to fund public services.
Opponents believe the proposal is unfair and could disrupt retirement planning for many individuals. They note that the $3 million threshold is not indexed to inflation, which may draw more middle-income Australians into its net over time. The debate over this legislative proposal highlights the tension between progressive measures to address disparities in the super system and concerns about undermining the financial stability of future retirees.
The ongoing discussion ensures that this issue will likely resurface in Australian politics in the coming years.
