Latest news with #superbalances
Daily Mail
24-07-2025
- Business
- Daily Mail
The looming threat hanging over thousands of Aussie super accounts
Australians are bracing for a radical new super tax that could prove even more damaging for households if Labor bows to pressure from the Greens. Anthony Albanese was re-elected with a plan to impose a new 15 per cent tax on unrealised gains on super balances above $3million. The resumption of Parliament means the government will attempt to pass the law - backdated to July 1 - but it needs the support of the Greens in the Senate. The policy is radical because it proposes to tax the notional capital growth of assets during a financial year before they are sold, which could force self-managed super funds to sell the likes of farms and commercial real estate to avoid the tax. The new tax is different to an existing 15 per cent tax on earnings during the accumulation phase, which is paid to the fund without most workers noticing. The 80,000 Australians with more than $3million in super would have to pay an annual tax bill, which an individual would have to pay from their bank savings. The SMSF Association estimates 50,000 of these people are in a self-managed super fund and will therefore be affected by Labor's proposed new tax. The group's chief executive Peter Burgess said those with more than $3million in super would be forced to sell assets like commercial business premises to avoid this tax - creating severe cashflow issues for businesses with a self-managed super fund. 'They will need to find that money somewhere else because you're talking about a paper gain,' he told Daily Mail Australia. 'They haven't actually received that gain - the tax is based on that; it means they're going to have to dip into their savings or their reserves elsewhere in order to be able to pay this tax.' It comes as Greens leader Larissa Waters has hinted her hard-left party will be demanding an even tougher new tax on super. The party want the threshold lowered to $2million but indexed for inflation. It's expected to affect 104,141 super accounts or 0.6 per cent of retirement savers. 'We'll be having some good discussions with the government on that matter and I'm optimistic of a good outcome there, but I'll have those discussions in private,' she told the ABC's 7.30 program on Tuesday night. Host Sarah Ferguson didn't press Senator Waters on whether the Greens would insist on a lower $2million threshold. But Mr Burgess said it would be political suicide for Labor to agree to the demands of the Greens, at least on the point of the threshold. '[Labor] is holding their ground and they're not making changes - I would be very surprised to see the government reduce the threshold,' he said. 'That would be suicidal for the government to do that with all the controversy, exposing more people to the unintended consequences.' The Coalition and left-leaning crossbench senators David Pocock and Jacqui Lambie are opposed to taxing unrealised gains, which means Labor needs the support of the Greens in the Senate to get its tax division 296 legislation passed into law. The new super tax bill isn't expected to be introduced during this fortnight of Parliament, but the government is proposing to backdate it to July 1. Mr Burgess argued is was impossible for people to plan their financial affairs without knowing the final outcome of the bill. 'The government can argue, "Well, we've been talking about this tax for a few years now" but it's unreasonable to expect people to act on legislation,' he said. 'To backdate it to the first of July we think is completely unreasonable - if it isn't passed in this fortnight, then the earliest it will be passed is late August. 'We may see some panic selling - but certainly what we're saying to people is "let's wait until the legislation is passed".' Assistant Treasurer Daniel Mulino told the House of Representatives during Question Time on Wednesday this was a 'very modest measure'. 'If an SMSF has a farm or a business within the fund, that it should be receiving commercial, arms length payments from that business or that farm,' he said. Labor's Better Targeted Superannuation Concessions and Other Measures bill was first introduced in 2023, with Treasury calculating it will affect 80,000 people or just 0.5 per cent of super savers. Wilson Asset Management modelling predicted a failure to index the new tax would affect 5.4million Australians, aged 18 to 34, by the time they turned 67 and were able to qualify for the age pension. AMP warned Labor's plan to tax unrealised gains above the $3million threshold would affect the average 22-year-old worker in four decades' time.
News.com.au
26-05-2025
- Business
- News.com.au
Minister defends super tax amid leniency concerns for politicians
Amanda Rishworth has defended Labor's proposal to roll back concessions on ultra-high super balances amid reporting federal parliamentarians may be able to defer payments. Only half a per cent of Australians — some 80,000 — have super balances north of $3m. Under the Albanese government's plan, super accounts above that would be slugged with an extra 15 per cent on earnings, pumping $2.7bn into Commonwealth coffers annually, according to Treasury estimates. But federal politicians enrolled in defined benefit pension schemes might not need to pay until after they retire, the Australian Financial Review has reported. Appearing on morning TV, the newly appointed Workplace Relations Minister was asked: 'Is it fair?' 'I have to be clear that both past and future federal politicians — if they have a super balance of over $3m — they'll be have to pay tax under this measure as well,' Ms Rishworth told Nine. 'But what we're talking about is a slightly less generous concession for people with balances over $3m.' Pressed further, she insisted that she would be 'subject to the same tax if my balance ever reaches over $3m'. 'Past federal and future federal MPs will be subject to this tax if their balance gets over three million (dollars),' Ms Rishworth said. 'Now, this is a reasonable measure and it's still going to be subject to a concessional rate, it's just not going to be as generous. 'And I would suggest that those 99.5 per cent of people that don't have a balance over $3 million, probably assume that you would have to pay a little bit more tax for it.' It was revealed earlier this month that a handful of judges and former state-level officials would be exempt from the tax. The exemptions would be restricted to 'those earnings in superannuation funds that the constitution prevents being taxed by the government will be excluded', according to a government summary document.
