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Here’s what the average person with $3 million in super looks like

By Millie Muroi and Shane Wright

The average wage-earner who would be hit by Labor’s superannuation tax changes is an older man pulling in more than $240,000 a year and living in a major city as the government looks to patch up the budget with its planned tax rise on retirement balances over $3 million.

But an analysis of tax numbers from the Association of Superannuation Funds of Australia shows that the median income for people affected by the change is much lower, at $110,000, and a quarter have an investment property.

Of the 80,000 Australians with super balances eclipsing $3 million, about 55 per cent are male.

Of the 80,000 Australians with super balances eclipsing $3 million, about 55 per cent are male. Credit: Oscar Coleman

Labor will need to secure the support of the Greens over coming weeks to pass its legislation, which would lift the concessional tax rate on earnings from the portion of super balances above $3 million from 15 per cent to 30 per cent. It claims the change would raise about $2.7 billion in revenue.

Only about one in 200 Australians are expected to take a hit under the change, but critics have suggested far more people would be affected in coming years if the threshold is not tied to wage growth or inflation.

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Opposition Leader Sussan Ley this week told the Coalition party room, ahead of the opening of the 48th parliament, that the Coalition would target Labor’s tax agenda after leaked Treasury advice urged the treasurer to consider new taxes to boost the budget bottom line. Ley vowed to “fight them every step of the way”.

The Association of Superannuation Funds of Australia’s research, based on the latest data from the Australian Taxation Office during the 2022-23 period, found about 77,400 – or more than nine in 10 affected individuals – have super balances of more than $3 million but less than $10 million.

The remaining 7 per cent have between $10 million and $50 million banked up in super, while about 100 Australians – less than 1 per cent of those affected and less than 0.005 per cent of the population – have nest eggs exceeding $50 million.

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Of the 80,000 Australians with super balances eclipsing $3 million, about 55 per cent are male, one-quarter have at least one investment property and about a third are still earning wage or salary income, according to the association. Of those still working, most are in managerial or professional roles.

Older Australians comprise an overwhelming majority of those with super balances above $3 million, with 65 per cent classed as retirees. About 90 per cent of those with super balances above that threshold are aged over 60 and just under half are aged over 70.

While some individuals report little-to-no taxable income, the average taxable income of people with super balances over $3 million is $240,000 a year, while the median is $110,000 a year. These figures do not include income from superannuation in retirement phase, which can be withdrawn tax-free if an individual is aged over 60.

About one in 20 reported income from farming or agricultural sources, but the Association of Superannuation Funds noted that often this was not the primary source of income, bringing into question claims that many farmers could be unfairly hit with unaffordable bills under the new super tax.

National Farmers Federation president David Jochinke has taken aim at Labor’s decision to tax unrealised capital gains, saying many farmers would not be able to pay the higher tax bill if the value of their land increased but their earnings did not, especially amid seasonal volatility.

“Taxing something that has only paper value, and no relation to your ability to pay that tax, is flawed,” he said previously. “Farms will be sold and generations of farming discontinued purely on this decision.”

But the data shows about 7 per cent of the Australians likely to be affected by the change – roughly 5600 people – live in rural areas, with only some of those ever having been involved in farming – and even fewer reporting self-managed super fund balances over $3 million.

Most of those with more than $3 million in super live in affluent regions within the major capital cities, with very few in rural or remote areas.

Areas with the highest shares of these people include the eastern suburbs, north shore and northern beaches in Sydney, inner areas of Melbourne and the Mornington Peninsula, and inner suburbs of Perth and Brisbane. The Association of Superannuation Funds also found there were significant numbers of these individuals in retirement areas such as the Gold Coast and the Sunshine Coast.

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Meanwhile, areas with the lowest proportions of people with super balances over $3 million include rural Tasmania, the Hunter Valley, the Central West of NSW, Murray, outer south-west Sydney, Hume, Darling Downs, Darwin, Logan in Queensland, and Mandurah in Western Australia.

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Original URL: https://www.theage.com.au/politics/federal/here-s-what-the-average-person-with-3-million-in-super-looks-like-20250721-p5mgja.html