Coalition accused of ‘hypocrisy’ over unindexed super changes that hit more people than Labor’s tax hike

The Opposition has been accused of “hypocrisy” for slamming Labor’s tax hike as “tricky” on superannuation.

The Opposition is being accused of “hypocrisy” for slamming Labor’s tax hike as “tricky” on superannuation even though previous Coalition unindexed changes will impact three times as many retirees in 30 years.

After weeks of defending its backflip on a promise not to touch super this term, the federal government is going on the attack using new Treasury figures showing the Coalition’s decision not to index changes to superannuation contributions in 2017 capture far more people every year than Labor’s proposal.

Superannuation is already emerging as a battleground issue in the next federal election after Labor last month unveiled its plan to double the concessional tax rate on earnings from super balances above $3 million from 2025-26, which would initially impact 0.5 per cent of Australians.

The cap will not be indexed to inflation, meaning by 2052 about 10 per cent of top earners who retire that year would be above the threshold and paying the higher tax rate of 30 per cent on earnings.

Opposition treasury spokesman Angus Taylor described the lack of indexation as “very tricky”.

Opposition treasury spokesman Angus Taylor has accused Labor of being ‘tricky’ over indexation of super tax hike. Picture: NCA NewsWire / Gary Ramage

“$3 million in 10, or 20 or 30 or 40 years’ time because that’s how long we’re looking at for superannuation, is nothing like what it is today because of the impact of inflation,” he said.

However, Treasury modelling of the Coalition’s 2017 changes lowering the threshold for additional contributions tax for high income earners to $250,000 will go from impacting an estimated one per cent of top earners at the time of legislation to at least 30 per cent of people retiring in 2052.

This is because the Coalition also decided not to index the threshold.

Treasurer Jim Chalmers said the new figures revealed the Opposition’s “dishonesty, deception and double standards.

“All their hypocrisy and hyperventilating is to distract from the fact that they want to add to the trillion dollars of Liberal Party debt to fund bigger tax breaks for people who already have tens of millions in super,” he said.

Treasurer Jim Chalmers is calling out the Coalition’s hypocrisy on super. Picture: NCA NewsWire/ Glenn Campbell

“The reason why our policy has received such deep and broad support from the Australian public is because it’s a modest and sensible change that helps clean up some of the mess that the former government left behind.”

More than two thirds of voters approved of Labor’s proposed to changes to super tax rights in a Newspoll survey conducted for the The Australian in March.

But the government has faced backlash for tinkering with super barely a year after Anthony Albanese said there would be “no change”.

The Prime Minister revised his comment to “no major changes” ahead of the concessional tax announcement, which Labor is seeking to legislate this term to come into effect in July 2025 after the next election.