Revealed: How many more people will be hit with Labor’s super tax rise

The number of Australians impacted by Labor’s superannuation tax increase will be 20 times more than what was announced, sparking allegations it has been “telling fibs”.

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One in 10 Australians retiring in 30 years’ time will be impacted by Labor’s doubling of tax on superannuation accounts with balances of over $3 million, it was revealed on Monday.

It is a dramatic increase in the number of Australians the government have said will be impacted when the policy is expected to come into force from 2025.

Previously the government said just 0.5 per cent of people with superannuation would be impacted. The new figure, which briefly caused accusations the number of people would be increased 20-fold, is related only to the number of Australians who will retire in 2052 with a superannuation balance with $3 million and not the total number of people with superannuation accounts.

Treasurer Jim Chalmers said it would be about 1 per cent of people affected at retirement by 2030 and 10 per cent in 30 years time.

“What we are proposing is a modest change, but it is a simple choice,” he said.

“When we inherited $1 trillion of Liberal Party debt and deficits as far as the eye can see, unfunded ongoing commitments and intensifying pressures in the budget, we say that the generous concessions in superannuation for half a per cent of people can be a little bit less generous.”

Meanwhile, Prime Minister Anthony Albanese did not rule out making changes to the stage three tax cuts, when asked in Question Time on Monday.

Finance Minister Katy Gallagher. Picture: NCA NewsWire / Martin Ollman

LNP Senator Matt Canavan said Labor had been “telling fibs” the public for the past week about just how many people were being impacted by its tax increase.

It follows Labor unveiling its plans to increase tax on superannuation earnings from 15 per cent to 30 per cent on balances more than $3 million, in a bid to raise $2 billion for the budget.

The threshold will not be indexed to inflation, meaning an increasing number of people will be impacted by it.

Mr Albanese has said just 0.5 per cent, or less than 80,000, will be impacted initially, but the government has until now been reluctant to indicate how many more will be hit over time.

Senator Gallagher, in response to a question from Senator Canavan, revealed treasury modelling that about 10 per cent of taxpayers would be impacted by 2055.

“In 30 years, Treasury projects, only the top 10 per cent of earners will retire with a superannuation balance of $3 million or more,” she said.

“Many parts of the tax system aren’t indexed. For example, personal income tax levels.

“I would say that this is a modest change to 0.5 per cent of people. Of the 80,000 people affected, the average super balance is $5.8 million.”

She said industry estimates were that just $545,000 was needed for a single person to retire and $640,000 in superannuation for a couple.

LNP Senator Matt Canavan. NSW Picture: NewsWire / Monique Harmer

Senator Canavan said the government had been misleading the public about its policy.

“Labor’s broken promise on superannuation will impact 20 times more people than it is has been suggesting in the past week,” he said.

“The Romans had a word for targeting 1 in 10, decimation.

“If the Government is fair dinkum, they must reveal all of their secret modelling so that people know how much extra tax they will pay because of Labor’s broken promise on superannuation.”