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Labor’s return sparks super reform momentum as $3m tax nears reality
Labor’s re-election has reignited calls to strengthen Australia’s $4.2 trillion super system, with industry bodies urging swift reform amid economic and demographic shifts.
The re-election of the Albanese government has reinvigorated calls from a leading superannuation industry body to strengthen Australia’s $4.2 trillion retirement savings system, with a renewed push for reform, stability, and equity amid evolving economic and demographic challenges.
In a landslide victory, Prime Minister Anthony Albanese led Labor to secure more than 85 seats, according to ABC projections, well above the 76-seat majority threshold, marking the first time in 21 years that a sitting Labor Prime Minister has won a second consecutive term.
Opposition Leader Peter Dutton suffered a significant blow, losing his seat of Dickson after 24 years in Parliament, as voters across the country swung decisively towards Labor.
In his victory speech on Saturday night, Albanese pledged to advance Australian values of “fairness, aspiration and opportunity” and vowed action on fair wages, affordable childcare, education, health, climate, reconciliation, and housing support.
Among the first to respond to the election result, the Super Members Council (SMC) welcomed the government’s return, saying that the new Parliament presents a “new opportunity” to build on the “world-class” superannuation system.
“Super gives everyday Australians more confidence about their financial futures and there is further work to do to make super even stronger for younger Australians and low-income workers,” said SMC CEO Misha Schubert. “A clear message from the election is that Australia must always strengthen and not weaken our world class super system – it is a key source of financial security for all Australians.”
The SMC urged the incoming government to prioritise the passage of payday super legislation within the first 100 days, alongside reforms to improve access to affordable financial advice and retirement planning.
Also high on its agenda is an increase to the Low-Income Super Tax Offset (LISTO), which has not been updated in 13 years and disproportionately affects 1.2 million low-income earners, most of them women.
The council also called for urgent reforms to prevent family violence perpetrators from benefiting from superannuation death benefits and to end age-based exclusions that deny super to most workers under 18.
Housing – one of the dominant themes of the federal election – was cited as a critical opportunity for super funds to contribute capital at scale, particularly in increasing supply.
The SMC reiterated its opposition to policies such as the Coalition’s push to allow super withdrawals for house deposits or permitting individuals to opt out of compulsory super, calling for these to be permanently shelved.
While Mary Delahunty, CEO of the Association of Superannuation Funds of Australia (ASFA), has yet to address the election outcome, speaking to stakeholders last month, she similarly said that superannuation is “not immune to erosion”.
“It needs clarity. It needs consistency,” Delahunty said. “And it needs the political courage to say no to policies that may seem appealing in the short term but are fundamentally undermine long-term retirement outcomes.”
ASFA’s election priorities included preserving super for retirement, stabilising policy settings, and closing equity gaps.
As the Albanese government enters its new term, one of the first major tests of its superannuation reform agenda will be the proposed tax on balances above $3 million – a measure that has sparked sharp backlash from the business community.
With Labor not only re-elected but likely to strengthen its Senate position, the controversial proposal is now expected to clear the legislative hurdle.
While superannuation funds themselves aren’t particularly concerned about the measure, with ASFA’s CEO saying in April that it isn’t a big deal, the business world remains strongly opposed. Critics said that taxing unrealised gains could disrupt investment strategies and negatively impact long-term economic growth, making the legislation a highly debated issue thus far.
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