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

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.

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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.