The Fin The not-so-super tax change that is dividing Australia
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Jun 4, 2025 Joanna Mather, Wealth editor at The Australian Financial Review, and Michelle Bowes, a reporter at the same outlet, dive deep into the controversial proposed superannuation tax changes in Australia. They discuss the implications of taxing super balances exceeding $3 million and how this could affect wealth distribution. The duo explores strategies taxpayers might adopt in response, the debates surrounding unrealised gains, and the potential for increasing wealth inequality. With expert insights, they shed light on the emotional and financial stakes at play.
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Complex Proportional Super Tax
- The new super tax increases tax on earnings above $3 million from 15% to 30%, but only proportionally on that segment of the balance.
- It taxes unrealised gains annually, which can be unfair if asset values fluctuate with no refunds for losses.
Threshold Not Indexed for Inflation
- The $3 million threshold for the tax is not indexed, meaning inflation and wage growth will cause more people to be affected over time.
- Young workers starting now could surpass this threshold by retirement due to compound interest and wage inflation.
Illiquid Assets Hit Hardest
- Farmers and self-managed super fund owners with illiquid assets like farms or commercial property are particularly affected because they may struggle to pay the tax on unrealised gains.
- This has made these groups strong opponents of the proposed super tax.