The federal Coalition is split over whether to oppose or wave through the federal government’s superannuation tax changes, but is unlikely to promise to repeal the legislation if it wins the next election.

This masthead can reveal a formal decision to reject the government’s revamped super tax, which Treasurer Jim Chalmers announced on Monday and hopes to have passed into law early next year, has yet to be made by the Coalition.

Internal debate is under way over the changes, and MPs are determined to avoid repeating the mistake the Coalition made last term when its policy offering would have delivered voters higher taxes and more debt and deficit.

If the tax changes are in place by the time of the next election, which is likely as the government looks to do a deal with the Greens in the Senate, repealing the changes would mean the opposition would have to find billions in extra budget revenue.

Repealing the changes is therefore considered a virtual non-starter by some Coalition MPs because of the impact on the nation’s finances. Conversely, some MPs believe the tax treatment of superannuation is such a totemic issue for Coalition supporters that the party should promise to repeal the laws as a matter of principle.

The Coalition has attacked Chalmers and the government since it reversed its 2023 budget decision to impose a 30 per cent tax on earnings on super funds holding more than $3 million. The original proposal would have hit unrealised gains on assets, while the government refused to index the threshold, guaranteeing it would extend to many more people over coming years.

The unrealised gains tax has been dropped from Labor’s plan, earnings on super balances of more than $10 million will attract a 40 per cent tax rate, the 30 per cent rate will hit accounts over $3 million, and assistance for low-income earners to build their nest eggs will be increased.

This week, Coalition housing spokesman Andrew Bragg signalled the opposition was unlikely to back the bill.

“We’ll look at the detail of the bill, but the starting point is that we don’t support higher taxes,” he told ABC television.

Several other members of the shadow ministry declined to comment on or off the record, citing the need to maintain confidentiality. However, one member predicted it was likely the party would oppose the changes but not repeal them if returned to government in three or six years.

Shadow treasurer Ted O’Brien, along with Opposition Leader Sussan Ley, will have the final say over the policy decision.

However, opposing the bill would not block the proposal should the government get support from the Greens. By the time of the next election, due in 2028, the changes will have been in place for two years, with the expected revenue baked into the budget’s forecasts.

Chalmers has not revealed the full impact of the changes announced on Monday, except that by 2028-29 they are expected to raise $4 billion less than his original proposals. One of the reasons for the drop in revenue is that they are due to start a year later.

Economists estimate the new proposals, particularly the step to index the $3 million and $10 million thresholds, will cost the budget billions of dollars in lost revenue by the middle of next decade.

Before the May election, the Coalition pledged to repeal the original proposals.

In its analysis of all policies, the independent Parliamentary Budget Office found that repealing the original super policy would cost the budget $43.4 billion in forgone revenue over the next decade. The lost revenue would also increase the interest bill on government debt by $7 billion over the same period.

The same analysis showed that, together with other Coalition promises, Peter Dutton went to the election promising more than $460 billion in budget deficits and a $147.3 billion increase in expected gross debt that would reach $1.7 trillion, or 35.1 per cent of GDP, by 2035-36.

Next week, Ley will address the conservative Centre for Independent Studies think tank, delivering a speech on ways to “restore Australia’s economic strength”.

In it, she is expected to outline the Coalition’s principles on ways to lift productivity and reward aspiration.

It follows an address last month in which she discussed how the Coalition would approach budget management, including on spending and government debt, which sits at $963 billion and is forecast to reach $1 trillion by the middle of next year.

In Melbourne on Wednesday, Ley said the Coalition’s economic approach was targeted at protecting younger Australians.

“Every minute it costs $50,000 just to pay the interest on Labor’s debt and that has to change,” she said. “We have to, for the sake of Gen Zs and Millennials, get this back under control.”

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