Coalition warns of $90b super ‘tax bomb’ under Labor Greens alliance

A Labor Greens alliance would deliver a $90 billion per year superannuation “tax bomb” on young Australians by the time they retired, the Coalition has claimed.

A Labor Greens alliance would deliver a $90 billion per year superannuation “tax bomb” on young Australians by the time they retired, the Coalition has claimed.

While Prime Minister Anthony Albanese has declared he won’t be cutting a deal with the Greens if the election results in a minority government, Greens leader Adam Bandt this week appeared to dismiss the comments, declaring: “I think there is an expectation that, in the next parliament, it’s a minority parliament, that we work together.”

The Coalition figure is based on a Labor plan to impose an additional 15 per cent tax on earnings including unrealised gains on superannuation balances over $3 million.

While proposed legislation to implement the tax increase did not pass parliament prior the federal election being called, the last budget showed Labor appeared to be pushing ahead with the plan.

A Labor Greens alliance would deliver a $90 billion per year superannuation “tax bomb” on young Australians, the Coalition warns. Picture: NewsWire / Martin Ollman

The budget forward estimates shows Labor expects to tax an extra $9.7 billion from superannuation funds over the five years from 2024-25 to 2028-29, compared with what was forecast in mid-year economic fiscal outlook.

It stated the upgrade to superannuation fund taxes reflects higher-than-expected current year collections, higher contributions due to the strength in employment and “an increase in tax from earnings on investments.”

The Coalition has seized on the statement, declaring Labor was pushing ahead to try to introduce what it described as one of the most “sneaky” tax grabs in history.

With the $3 million threshold not indexed, it has noted how an increasing number of Australians would be captured over time.

And with the Greens having already announced that they would seek to reduce this

unindexed threshold to $2 million, this would mean an additional million Australians would be captured should Labor have to rely on the Greens.

Prime Minister Anthony Albanese has declared he won’t be cutting a deal with the Greens. Picture: Jason Edwards / NewsWire

While the tax imposte might start off small, in this scenario it would raise $90 billion per year at its peak in 40 years time, according to the Coalition analysis.

Had the tax already been in place, Australians would have a tax liability for unrealised gains from 2023-24 when the market went up, while their superannuation balances were being clobbered due to the global sell off in risk assets this financial year, it claims.

When the Albanese government first proposed the tax in 2023, it estimated that only about 80,000 people had superannuation balances large enough to be affected.

However, Shadow treasurer Angus Taylor said the plan – which represented a broken election promise not to make changes to superannuation – would increasingly capture more “every day” Australians over time.

“Make no mistake this is a ticking tax bomb and it’s going to grow over time and those who will pay the most are young Australians starting out in the workforce today,” he said.

“Not only is it a broken promise by the Prime Minister, it will be made even worse under a Labor-Greens minority government.

“These aren’t high-flyers. As the tax grows it will capture hardworking, every day Australians such as accountants, nurses, teachers and tradies.”

Originally published as Coalition warns of $90b super ‘tax bomb’ under Labor Greens alliance