Treasurer Jim Chalmers has defended the government’s planned taxes on wealthy superannuation balances, describing them as modest.
The government doubled the tax rate on super accounts with more than $3 million from 15 per cent to 30 per cent, with the changes to come into effect from mid-2025.
Dr Chalmers said the measures, which will impact about 80,000 superannuation accounts, are needed to deal with budget pressures.
“This is a modest change but a really simple choice. This is a modest change that only affects half a per cent of Australians,” he told reporters in Brisbane on Sunday.
“It is making concessional tax arrangements a little bit less, so there will still be generous tax concessions for everybody in the system, but a little bit less generous for people with more than $3 million in their superannuation accounts.”
The coalition has hit out at the changes, with shadow treasurer Angus Taylor warning more people will be affected over time.
“The reality is this policy is flawed, in some respects it’s reckless and it will have a far bigger reach, much bigger reach than Labor is pretending,” he said.
“If you’re a younger Australian in your 20s, you’re not going to be facing in real terms a $3 million threshold. You’re going to be facing something closer to a third of that.”
Mr Taylor said the tax change represented a broken election promise.
“People are very sensitive about superannuation, the reason is you’ve got to trust the government on this,” he said.
“When a government says they’re going to do one thing and does something completely different when the money is locked away and I can’t get access to it, then it is a very, very significant breach of trust.”
The coalition has threatened to repeal the legislation should it win the next election.
However Dr Chalmers dismissed the opposition concerns.
“What we saw today from Angus Taylor was his ridiculous and dishonest scare campaign falling down all around him under the weight of its own lies,” he said.
“Our job is to take the challenges in the budget seriously, to take the challenges in the economy seriously, to take the right decisions and to recognise the right path is not always the path of least political resistance.”
Workplace Relations Minister Tony Burke said the super changes were needed to lower spiralling levels of government debt.
“How can we have a situation where we keep hurtling towards a time where superannuation tax concessions cost more than the age pension, which is where we’re heading,” he told Sky News.
“If you’ve got more than $3 million, good on you, you’ll still get a tax concession, it just won’t be as generous as for what it is for the 99.5 per cent of Australian balances.”
Liberal senator Andrew Bragg said the government should have explored other options to reduce debt.
“Raising taxes is the last thing they should be doing and I just think it sends the wrong message to people that the government will pull the rug from underneath you,” he told Sky News.
“If the change was going to go ahead, it would be better if it was indexed. If it’s not indexed, then over half million people will be hit by this creeping tax.”
The Greens have called for the threshold to be lowered from $3 million to $1.9 million and the changes to come into effect from July this year.
Costings from the Parliamentary Budget Office show those changes would affect 210,000 people and raise $54.6 billion over the next decade.
By Andrew Brown in Canberra
