Peter Dutton warns plans to target rich with $3 million in super is a ‘ticking time bomb’ for younger workers
Despite promising not to tinker with super at the 2022 election, the Albanese Government flagged the changes two years ago, vowing to take them to this election.
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The Liberal Party has predicted a ‘tax bomb’ awaits a younger generation of workers if the Albanese Government is re-elected because of “sneaky” moves to double the tax on super balances over $3 million.
Despite promising not to tinker with super at the 2022 election, the Albanese Government flagged the changes two years ago, vowing to take them to this election.
While the proposed changes currently impact a tiny proportion of the Australians with superannuation, the Liberals insist the “sneaky” tax grab will capture more and more workers over coming decades because it’s not indexed.
The proposal, first announced in the 2023-24 budget, would impose an additional 15 per cent tax on unrealised gains on superannuation balances over $3 million.
Treasurer Jim Chalmers has subsequently described the move as “unfinished business” confirming it will be back on the agenda if they win the election.
According to the super industry there were about 55,000 individuals with a balance over $3 million, up from around 35,000 in June 2019.
Given recent investment returns and further contributions, the Treasury estimates that by July 2025 there will be around 80,000 individuals with more than $3 million in superannuation.
As of June 30, 2024, approximately 17 million Australians have superannuation accounts.
Opposition treasury spokesman Angus Taylor said the proposed changes were “a ticking time bomb.”
“When Labor runs out of money it comes after yours,’’ opposition treasury spokesman Angus Taylor told news.com.au.
“Make no mistake this is a ticking time bomb and it’s going to grow over time and those who will pay the most are young Australians starting out in the workforce today.
“Not only is it a broken promise by the Prime Minister, it will be made even worse under a Labor-Greens minority government.
“These aren’t high-flyers. As the tax grows it will capture hardworking, every day Australians such as accountants, nurses, teachers and tradies.”
Opposition finance spokesman Jane Hume said the $3 million threshold was deliberately not indexed, meaning more and more Australians will be captured over time.
“The only plan Labor has is to keep making Australians poorer,’’ she said.
“Labor broke their promise on no new taxes and no changes to super. It is clear that taxes on super will go even higher, and Australians will be even poorer, under a radical left Labor Greens Coalition. “Anthony Albanese simply can’t be trusted.”
The Coalition cited analysis from the Treasury showing a 20-year-old today earning an average wage over their lifetime will be caught up and pay higher taxes under this tax – meaning up to 2 million young Australians could be captured by the time they retire.
- A 30 year old tradie earning $100,000 a year with a current superannuation balance of $50,000 would reach the $2 million threshold by the time they retire at age 65.
- A 25-year-old IT professional earning $100,000 with a current superannuation balance of $35,000 would reach the $3 million threshold by the time they retire at age 65.
- A 45-year-old school principal earning $150,000 today with a current superannuation
balance of $650,000 would reach the $3 million threshold by the time they retire at age 65.
Labor’s controversial plan has been stalled in parliament since last year, with the Coalition and Senators Jacqui Lambie and David Pocock refusing to support the legislation.
Treasurer Jim Chalmers has previously claimed doubling the tax rate was a “modest adjustment” that would make superannuation “more sustainable”.
A similar proposal became a major flashpoint during last year’s US election.
Former President Joe Biden first floated a 25 per cent tax on unrealised capital gains for ultra-wealthy Americans in 2022, with the policy also supported by Ms Harris after she became the Democratic candidate.
But the idea of changing a fundamental principle of how capital gains were taxed sparked widespread alarm among economists and investors about the potential unintended consequences.
Originally published as Peter Dutton warns plans to target rich with $3 million in super is a ‘ticking time bomb’ for younger workers
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