Treasury unsure how many people will be impacted by super change

Treasury says it has not modelled the number of people that will be impacted over the long term by the government’s proposed $2.3bn tax hike on super­annuation balances.

Liberal senator Andrew Bragg. Picture: NCA NewsWire / Martin Ollman

The Department of Treasury says it has not modelled the number of people that will be impacted over the long term by the government’s proposed $2.3bn tax hike on super­annuation balances for wealthy retirees.

Labor’s plan to double the concessional tax rate on superannuation balances above $3m has drawn criticism from the Coalition, particularly because of its intention not to index the $3m threshold.

While only 80,000 people will be impacted when the change comes into force in 2025, questions have been raised about how many people will affected in coming years.

The Opposition has claimed that the reform will hit more than two million Australians who are 25 years old today, but are predicted to have super balances of $3m or more by the time they retire.

Under questioning from Liberal senator Andrew Bragg on Thursday, Treasury officials said they had not completed any modelling to confirm how many people would be impacted in coming decades.

“We haven’t modelled the population, we’ve modelled what percentage of GDP the concessions will represent,” Treasury Assistant Secretary of the retirement income policy division, Lynn Kelly, told Senate estimates.

Senator Bragg asked: “You don’t know how many people it will impact?”

Ms Kelly said Treasury’s focus was on determining the number of people – roughly 80,000 – impacted at the time of the change.

“But you can’t tell me how many people it will impact in 10 years or 40 years?” Senator Bragg pressed.

“We’ve not done that modelling,” Ms Kelly said.

Senator Bragg said it was clear that the decision not to index would mean “hundreds of thousands” of people would be paying the higher tax in years to come.

The government’s super reform is not guaranteed to pass parliament, with the Greens demanding Labor first add paid parental leave to super before ­assuring their support in the Senate.

Finance Minister Katy Gallagher said last week that while the government wanted to add paid parental leave to superannuation, it was not something there was “room for” in the budget at the moment.

This was despite Labor’s own Women’s Economic Equality Taskforce urging for the change to be adopted in its final report to government.