Labor to unveil super tax tweaks on big balances

Treasurer Jim Chalmers has promised that the Labor government won't tinker with negative gearing.

Treasurer Jim Chalmers has promised that the Labor government won't tinker with negative gearing. Photo: AAP

The number of Australians with super balances in the hundreds of millions has been expanding quickly as the federal government prepares to tighten tax breaks for wealthy retirees.

The Labor government committed to halving the concessional tax rate for those with super balances of $3 million or more earlier in the year in a bid to claw back some revenue and make the system fairer.

Draft legislation for the tax concession changes, due to come into force in 2025 – after the next election – will be unveiled on Tuesday.

Only 0.5 per cent of people with balances above $3 million will be captured by the changes, with most Australians having less than $200,000 in super.

Massive super balances have risen sharply, however, with the number of people with more than $100 million in super growing from 17 to 28 in just 12 months during the pandemic.

Based on the new analysis of Australian Taxation Office data, those with balances above $50 million lifted from 78 to 107 in the same period between 2019-20 and 2020-21.

The average super balance also grew substantially over that period, from $150,000 to $170,000.

Treasurer Jim Chalmers said everyone would still receive super tax breaks under the changes but concessions would be less generous for balances of more than $3 million.

These people will still incur a concessional tax rate on annual earnings but it will lift from 15 per cent to 30 per cent.

“Australians are making hard choices around the kitchen table, and it’s important that the government does the same thing around the cabinet table,” he said.

The opposition has accused the federal government of breaking an election promise by tinkering with super tax settings, and is expected to fight the changes at the next election.

Without the coalition’s support, the government will need the Greens and key crossbenchers on board.

The Greens have already called for super payments on paid parental leave in exchange for their support.


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