Government moves to double tax rate for multi-million dollar super balances

28 February 2023
| By Charbel Kadib |
image
image image
expand image

The Albanese government has moved to double the concessional tax rate for superannuation balances exceeding $3 million.

Prime Minister Anthony Albanese and Treasurer Jim Chalmers have announced a proposal to double the concessional tax rate for super balances exceeding $3 million, from 15% to 30%.

The revised rate, which would apply from July 2025, would not be retrospective, applying only to future earnings.

According to Prime Minister Albanese, the changes would impact 0.5% of superannuation accounts, or roughly 80,000 Australians.

The higher concessional tax rate, to be proposed in the October budget, is tipped to contribute $900 million to the bottom line over the forward estimates and approximately $2 billion in the first full year of revenue after the election.

The proposed reform comes as the newly released 2022‑23 Tax Expenditures and Insights Statement revealed superannuation tax concessions amount to about $50 billion a year — projected to exceed the cost of the Age Pension by 2050.

“This modest adjustment is consistent with the Government’s proposed objective of superannuation, to deliver income for a dignified retirement in an equitable and sustainable way,” Prime Minister Albanese said.

“Labor built the superannuation system. We will always protect it and make it stronger, because we want working people to have dignity and security in retirement.

The government said it would introduce enabling legislation to implement the adjustment “as soon as practicable”, with further consultation to be undertaken with the superannuation industry and other relevant stakeholders.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

1 year 4 months ago
Kevin Gorman

Super director remuneration ...

1 year 4 months ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

1 year 4 months ago

Both economists and money markets have scaled back expectations of a jumbo rate cut in May....

3 hours 15 minutes ago

Negative market movements, coupled with net outflows, have prompted a near $6 billion decline in Challenger’s funds under management (FUM) for FY2024–25’s third quarter....

3 hours 19 minutes ago

Momentum Media’s wealth publishing network – comprising InvestorDaily, ifa, SMSF Adviser, Money Management, and Super Review – is proud to launch the annual Australian We...

3 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND