Labor backs down on key elements of controversial superannuation tax plan | Superannuation
The Albanian government has dramatically backtracked on its controversial pension tax plan, bowing to persistent criticism from media, industry and politics.
Treasurer Jim Chalmers announced the surprise decision on Monday morning, just three days after Anthony Albanese insisted Labor’s plan remained unchanged.
The government’s plan to double the tax rate on superannuation balances over $3 million from 15 per cent to 30 per cent has faced sustained attacks since it was announced in 2023, despite affecting just 0.5 per cent of savers.
The main criticisms were that the policy taxed so-called “unrealized gains” as well as cash profits, and that the $3 million threshold was not indexed, meaning more people would be affected as super balances rise over time.
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As part of a major rewrite of the policy, the government now plans to index the threshold to $10 million, cancel the application for unrealized gains and postpone the start date to July 2026.
The proposed 30 percent tax rate will remain for retirement balances between $3 million and $10 million, after which a new 40 percent rate will take effect.
The changes approved by the cabinet on Monday morning represent a major step back by the Albanian government, which failed to pass the law in the Senate during the last term of parliament.
Under a separate change, the government will increase the low-income pension tax offset from $310 to $810 from July 1, 2027, and raise the eligibility threshold from $37,000 to $45,000.
More details coming soon…
