Under the proposal outlined on Tuesday by Prime Minister Anthony Albanese and Treasurer Jim Chalmers, the concessional tax rate applied to future earnings of super balances above $3 million will be 30% from 1 July 2025.
At current, earnings from superannuation in the accumulation phase are taxed at a concessional rate of 15%.
Prime Minister Anthony Albanese said the proposal does not change the fundamentals of Australia’s superannuation system.
“99.5% of people with superannuation are unaffected by this reform, with around 80,000 people impacted by this,” Mr Albanese said.
The 2022-23 Treasury Tax Expenditure Statement reported superannuation tax breaks amounted to $48.2 billion in annual lost revenue for the Government.
Treasurer Jim Chalmers said the proposed policy will improve the budget position by $2 billion in its first full year and $3.2 billion over five years.
“This isn’t about limiting the amount of super you can accumulate, it's just about how generous the tax concessions are on it,” Mr Chalmers said.
“100% of Australians with super will continue to receive generous tax breaks.
“If you are part of the one half of one per cent with more than $3 million, you will still get tax concessions, they will just be a little bit less generous.”
Speaking to Savings.com.au, WLTH Head of Lending Cat Mapusua said supporters of this change may argue that this would help address wealth inequality and generate revenue for the government, while opponents argue that it could discourage people from saving for retirement and have negative economic effects.
"At WLTH, we think this presents an opportunity to engage with Australians about the importance of their super, particularly younger people for whom retirement is a long way away," Ms Mapusua said.
"Investing in property has historically been considered a low risk, high return option for those planning for their retirement via an SMSF, however the recent tax changes may unravel this strategy."
"It’s a common guideline that the average Aussie needs around $1 million in their super to retire comfortably at age 60, but given the rising cost of living and inflation compounding over time, this could easily jump past $3 million over decades, meaning a lot more Aussies will be sacrificing their nest egg to the tax man.
"Overall, the debate about superannuation tax breaks highlights the challenges of balancing incentives for retirement savings with concerns about fairness and sustainability in the tax system.”
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| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
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| Promoted | Disclosure |
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Harry O'Sullivan
Denise Raward
Harrison Astbury
