Australia’s superannuation sector has welcomed elements of the Federal Budget 2026–27, while warning further reform is needed to strengthen consumer protections, improve retirement outcomes and protect tax stability for long-term savings.
The budget included a $17.8 million consumer safety package to strengthen oversight of managed investment schemes following the Shield and First Guardian collapses, while also confirming the boost to the Low Income Superannuation Tax Offset (LISTO) and the extension of super payments on Commonwealth Paid Parental Leave to 26 weeks.
It also preserved existing capital gains tax (CGT) settings for super investors, including SMSFs, amid broader CGT reforms outside the super system.
The budget papers also pointed to a “tell us once” approach to data reporting and further red tape reduction measures aimed at cutting duplication across the sector.
HESTA said the budget had provided welcome cost-of-living relief for members, including personal income tax cuts and offsets, reductions to the cost of medicines and fuel, and measures aimed at boosting housing supply.
The fund also pointed to further funding for hospitals, urgent care and aged care as important for the health and community services sector, where many of its members work.
HESTA chief experience officer, Lisa Samuels, said the budget had been delivered against a difficult economic backdrop.
“This budget has been delivered in a difficult environment, with geopolitical instability and persistent cost-of-living pressures shaping everyday choices for our members and many working Australians,” Samuels said.
“The typical HESTA member is a 42-year-old woman earning $63,000 a year and any relief the Government can deliver is welcome.”
Samuels said HESTA particularly welcomed the boost to the Low Income Superannuation Tax Offset being reflected in the budget papers, alongside the upcoming extension of Paid Parental Leave and super contributions on Paid Parental Leave to 26 weeks.
“HESTA has long advocated for the lifting of the LISTO payment and permanently linking it to personal income tax thresholds as a meaningful step forward, particularly for those working in lower-paid caring professions. Combined with extended paid parental leave and super paid on every one of those 26 weeks, these changes will make a real difference to the retirement balances of Australia’s lowest-paid workers,” she said.
The fund renewed its call for the government to modernise the retirement phase of super, arguing more Australians should be able to benefit from tax-free retirement investment earnings when they are eligible.
HESTA said its modelling showed only 45 per cent of eligible Australians voluntarily transitioned to a tax-free retirement account, with nearly 3 million Australians potentially missing out on $5.44 billion in retirement savings each year by 2030 if they remained in accumulation accounts.
“Dignity in retirement should be for everyone. Our members have spent their working lives caring for other Australians – they deserve a super and retirement system that works just as hard for them,” Samuels said.
The Super Members Council (SMC) also welcomed the budget’s $17.8 million allocation to strengthen consumer safety in super following the collapses of the Shield and First Guardian schemes.
The SMC said the funding would resource ASIC to strengthen governance requirements for managed investment schemes and use data to more closely supervise those schemes, with the measure to be partially offset by cost recovery.
SMC chief executive Misha Schubert said the budget had included modest but important investments, but argued more work was needed.
“Overall, this is a steady as she goes budget for super, with a handful of modest but important new investments to boost oversight of investment schemes like those in the Shield and First Guardian collapses,” Schubert said.
“Further urgent reforms are needed to make super safer by strengthening consumer protections and transparency, including applying the super performance test on super platform products where millions of consumers are still flying blind on whether their super is performing for them or not.”
“It’s also crucial that the Government fast-track long-promised reforms to help Australians to get more safe guidance and advice from their own super fund – those tools are crucial to keep consumers safe from predatory social media clickbait ads like those that targeted the Shield and First Guardian victims.”
The council also argued the government needed to set stronger expectations for unpaid super recovery ahead of payday super laws commencing from 1 July.
“The new payday super laws from 1 July will mean that for the first time, the ATO will soon have real-time visibility on which workers have been unpaid or underpaid super every single pay cycle. The Government must set the ATO bold targets to swiftly recover that money owed to everyday working Australians.”
Schubert also called for the government to extend guaranteed super to younger workers.
“It is also long past time to end an unfair, outdated and discriminatory exclusion of under-18 workers from being guaranteed super if they work less than 30 hours a week for the one employer. This will be a watershed moment for intergenerational equity.”
The ASFA welcomed the government’s decision to exempt super investors, including SMSFs, from changes to the capital gains tax discount, saying existing CGT settings for super would remain unchanged.
“[The] budget is a win for the 19 million Australians with a super account, who value stability in super’s tax settings,” ASFA chief executive Mary Delahunty said.
“Super offers every Australian a deal: if you set aside money for your retirement and reduce your future reliance on the age pension, you are rewarded by paying less tax. Australians rightly expect those tax concessions to remain stable, and that’s what this budget has delivered,” Delahunty said.
Outside super, ASFA said investors currently received a 50 per cent discount on CGT for assets held longer than 12 months.
From 1 July 2027, CGT payable in that context would be the higher of a 30 per cent rate or the investor’s marginal tax rate minus an inflation-indexed discount.
Inside super, investors would continue to receive a 33 per cent discount on capital gains on long-held assets, while earnings in super were taxed at a flat 15 per cent rather than an individual’s marginal tax rate.
“Super’s $4.5 trillion savings pool is a primary driver of investment in Australian businesses. Stable tax settings keep super an attractive home for long-term capital that funds the productive assets that grow our economy and create jobs.
“[The] budget is good news for people with super and good news for the nation,” Delahunty said.
