BREAKING: The Australian federal government has just announced a significant overhaul of its superannuation tax policy, impacting over 1 million Australians who can expect to be about $15,000 better off by retirement. This urgent change comes after mounting pressure on Labor to amend its controversial proposal to double the tax rate on super accounts exceeding $3 million to 30%.
The revised plan maintains the $3 million threshold but introduces a new 40% tax rate for accounts over $10 million. This crucial adjustment ensures that both thresholds will be tied to inflation, protecting lower-income Australians from being unfairly taxed as their incomes rise. Currently, approximately 80,000 individuals hold super accounts valued at $3 million or more and are subjected to the standard 15% concessional tax rate.
Treasurer Jim Chalmers stated, “These reforms will make the superannuation system stronger, fairer, and more sustainable.” Addressing concerns raised by economists, the government has abandoned its original plan which faced criticism for being locked at $3 million without indexing. Chalmers further confirmed that discussions regarding the new plan with the Greens are underway, but he has yet to engage with the opposition.
The government will also increase the low-income superannuation tax offset by $310 to $810, expanding eligibility to anyone earning above $45,000. These changes are set to take effect from July 2026 for the super tax adjustments and July 2027 for the low-income offset, pending parliamentary approval.
The Association of Superannuation Funds of Australia applauded the changes, with CEO Mary Delahunty emphasizing that “these changes will make a material difference to the retirement prospects of 1.3 million Australians.”
However, the revised proposal has drawn scrutiny from the opposition and the Greens. Senator Sarah Hanson-Young of the Greens called for more details, suggesting that the government may have softened its stance on taxing the wealthy. She stated, “For every rich dude who doesn’t have to pay his fair tax on superannuation, someone at a school is not getting the resources they need.”
Opposition spokesperson Ted O’Brien described the government’s backtrack as a “victory for the coalition of common sense,” highlighting the political ramifications of the announcement.
As this situation develops, all eyes are on the parliament, where Chalmers must secure support from either the coalition or the Greens to advance these critical reforms.
Stay tuned for further updates as this story unfolds and the impact on Australian superannuation policy becomes clearer.
