Aussies atop superannuation food chain speak on tax hike for bulging retirement accounts

Aussies atop the superannuation food chain have spoken out about the government’s latest tax hike for bulging retirement accounts.

Have you ever wondered how some people end up with millions in their retirement accounts?

Take Gary Belgre, a retiree from North Sydney, for example. At 66 years old, he enjoys a “very comfortable” retirement, thanks to earnings on his superannuation.

However, despite his good fortune, Belgre fully supports the government‘s decision to double the tax rate on Australia’s largest super balances from 15 to 30 per cent.

This move is expected to impact around 80,000 Australians or 0.5 per cent of the population, including the 11,000 Australians who have more than $5 million in their accounts.

“The fact of the matter is if you‘ve got more than $3 million … that’s not just for a comfortable retirement — which is what superannuation was intended for — that is wealth creation going forward,” Mr Belgre told ABC Radio Sydney.

“I just have enormous sympathy for the vast majority of Australians. They‘re hardworking, they’re battling, and they’re not lucky like me.”

The move is expected to impact around 80,000 Australians or 0.5 per cent of the population, including the 11,000 Australians who have more than $5 million in their accounts.

On the other hand, Evelyn Stanz‘s impressive super balance is not the result of luck. In her early twenties, Stanz worked three jobs, including full-time professional work, waitressing at night, and market research on weekends. Her hard work and dedication have clearly paid off.

“I saved as much money as I could to put into super. I‘ve never claimed a government benefit, I’ve paid all my taxes, I’ve never inherited anything, and I’ve worked really hard at making sure that what I had in my super was productive to provide for me,” Ms Stanz told Mornings presenter Sarah Macdonald.

“I don‘t think it’s fair that I should be penalised for not travelling, for not going out drinking, for not doing things that other people did.

“My goal was to make sure that I had some sort of buffer in the event that I had to be put into a nursing home or have doctors come to the house. I mean, all of that is really expensive.”

However, Ms Stanz, like Mr Belgre, will be affected by the new tax changes.

Starting July 1, 2025, the higher tax rate will apply to the earnings on balances over $3 million, rather than the entire amount.

Treasurer Jim Chalmers has raised concerns about the current system‘s cost to the budget, stating that tax concessions currently cost the budget $52.5 billion a year and that “we’re on track to spend more on super tax concessions than the Age Pension by around 2050.”

Dr Chalmers has called for a “national conversation” on the issue, which he believes could include a reform of the tax concessions system or a $3 million cap on super balances.

Treasurer Jim Chalmers has raised concerns about the current system‘s cost to the budget, stating that tax concessions currently cost the budget $52.5 billion a year and that ‘we’re on track to spend more on super tax concessions than the Age Pension by around 2050’.

The other major area the government wants to tackle is the proposal to legislate an “objective” for superannuation, which would mean that future governments would find it difficult to introduce policies that allow Australians to dip into their super earlier.

Superannuation accounts can be accessed earlier than retirement age under a number of limited circumstances, including financial hardship and compassionate grounds.

Opposition assistant treasury spokesman Stuart Robert said the Coalition supports enshrining a purpose for superannuation, but the government is attempting to limit access to people’s own money.

He has claimed: “It is quite clear the government is building a mandate to come and tax Australians more.”

Meanwhile, Australians are being urged to check-in on their superannuation, with new data from the Australian Taxation Office revealing there is $16 billion in lost and unclaimed super across the country.

On Monday, the ATO said this was an increase of $2.1 billion from last financial year.

Deputy commissioner Emma Rosenzweig has reminded Australians that lost super can be easily found.

“Super is one of the most important investments many Australians will have during their lifetime, which is why we want to reunite hardworking Australians with what is rightfully theirs,” Ms Rosenzweig said.

“People often lose contact with their super funds when they change jobs, move house or simply forget to update their details,” she said.

“This doesn’t mean your super is lost forever – far from it. By accessing ATO online services through MyGov, you can easily find your lost or unclaimed super.”

Super becomes “lost” when the member can no longer be contacted or the account is inactive, the ATO said.

They said super funds currently hold $10.4 billion in lost super, while the ATO holds $5.6 billion.

Since 2017, the ATO has consolidated $4.7 million accounts, worth as much as $7.1 billion.

Originally published as Aussies atop superannuation food chain speak on tax hike for bulging retirement accounts