Super tax changes a ‘down payment’ for greater reform
Wealthy retirees will pay more tax on balances over $3 million after the Greens agreed to demands to strengthen controversial new laws.
The government is expected to pass its long-promised tax changes through parliament by the end of the week.
The Greens were withdrawing their support for the pension tax package because they felt it did not go far enough.
Greens treasury spokesman Nick McKim accused Labor of watering down its original proposal, first announced in 2023, because unrealized capital gains would no longer be covered by the new tax.
Starting July 1, the tax rate on retirement earnings for accounts over $3 million will be doubled to 30 percent.
Earnings over $4 million will be taxed at 40 percent; this rate is higher than the original offer.
Thresholds will be indexed to prevent the number of Australians captured by the changes from becoming excessive over time.
The new package would also increase the low-income retirement tax offset threshold from $37,000 to $45,000 and increase the maximum payment to $810.
Despite their concerns, Senator McKim said the Greens would support the bills as “a down payment on real, progressive tax reform” in the upcoming budget.
“This budget is a once-in-a-generation opportunity for ambitious tax reform and we are opening the door for Labor to pass it,” he said.
Senator McKim said the bill barely scratches the surface of the changes needed to fix a tax system that “accelerates intergenerational inequality.”
“We expect bold tax reform so young and working Australians don’t have to bear the burden while the super-rich enjoy generous tax concessions on their income from assets,” he said.
The Greens are already pressing the government to rein in investors’ tax privileges on property, including capital gains tax relief and unfavorable practices, which they argue have led to a sharp rise in housing costs and widening wealth inequality.
The Treasury is reportedly investigating reducing the 50 per cent deduction on capital gains for investment properties held for more than 12 months.
Finance Minister Jim Chalmers thanked the Greens for their “constructive” involvement in the super tax bills.
With the support of the Greens, Labor could pass the bill in the Senate even if the coalition votes against it.
“A vote against these reforms is a vote against a safer retirement for more than a million Australians, including hundreds of thousands of young people and women,” Dr Chalmers said in a statement. he said.
