Opposition grills Labor over controversial tax on wealth
Prime Minister Anthony Albanese (pictured) faced pointed questions in parliament today over the Labor government’s plan to tax superannuation balances exceeding $3 million at 30%.
As one of the government’s most contentious flagship policies, Labor Treasurer Jim Chalmers intends to double the rate of earnings tax – from 15% to 30% – for super balances over $3 million. The tax will not be linked to inflation, meaning more savers will be captured over time, while unreaslied gains, including on illiquid property assets, will also be taxed.
While it will only affect a tiny minority of Australians, the policy has been weaponised by the opposition, with Shadow Treasurer Ted O’Brien labelling it “a grave threat to retirement savings, investment, and the property market”.
Today, Opposition Leader Sussan Ley challenged Albanese directly, asking if he would abandon the proposal and instead join her, the crossbench, and former prime ministers Paul Keating and John Howard in rejecting what she called an “unfair tax".
Albanese refused to engage on the specifics of the super tax, instead pivoting to attack the opposition’s own tax record.
“Remarkably, those opposite went to an election saying that they would actually introduce legislation to increase income taxes, for every single Australian taxpayer, by increasing that first marginal tax rate not once but twice,” Albanese said.
“We want people to earn more and keep more of what they earn. That’s our tax policy,” he added.
Chalmers was also grilled by opposition MP Tim Wilson about the impact of the super tax, particularly on unrealised capital gains for balances above $3 million.
Chalmers said: “When we announced the policy, the expectation was that there would be about 0.5 per cent of people in the superannuation system impacted by what is a very modest change in terms of the impact on individuals.” He added that those affected would “still get very generous tax concessions in superannuation, but it will be slightly less generous".
The government has so far refused to index the $3 million threshold to inflation, with industry groups warning that as many as 500,000 Australians could eventually be affected if the policy remains unchanged.
But if today’s comments are anything to go by, Labor intends to stick to its guns on super tax for the time being.
The proposed policy carries certain implications for mortgage brokers, especially those guiding clients on property investment via self-managed super funds (SMSFs) or retirement planning.
By taxing unrealised gains, investors may be compelled to sell property assets to meet annual tax obligations – a particular concern for SMSF members whose portfolios are heavily weighted towards real estate. However, at the $3 million threshold, the vast majority of investors will see no impact from the incoming tax change.
