Following Prime Minister Anthony Albanese’s election victory, the Australian government is poised to implement its plan to double the tax on earnings from superannuation accounts exceeding $3 million, including unrealized gains. With increased Senate numbers, Labor will likely only require support from the Greens to pass the legislation. The government aims to implement these changes urgently, given the plan is scheduled to commence in the new financial year.
Under the proposed law, the Division 293 contribution tax of 15% will apply to the proportion of an individual’s superannuation balance above $3 million at the end of the financial year. Individuals can elect to pay the tax personally or from their superannuation account balance. The government intends to introduce the legislation in August, with the new measures applied retrospectively. The lack of indexation of the $3 million cap has raised concerns, as it could affect a growing number of people over time.
Before the election, the Association of Superannuation Funds of Australia (ASFA) supported the bill, stating the tax can effectively ensure fairness in super tax concessions. Concerns remain regarding the taxation of unrealized capital gains, and potential reforms to address this issue might be considered by the incoming government. The current bill is budgeted to raise $2.3 billion in its first full year.
