Treasury examining concerns raised with Anthony Albanese’s office

Prime Minister Anthony Albanese is directly involved in the government’s contentious plan to increase taxes on large pension accounts, while the Treasury department said it was examining concerns about the impact on the economy and super funds.

Senior Treasury official Diane Brown told a Senate hearing this afternoon that the prime minister’s office was consulting with the department about the changes, which have not yet been enacted.

Finance Minister Jim Chalmers announced a 15 per cent surcharge on income from super funds with balances over $3 million in early 2023. The bill, which will start on July 1 this year, has not yet become law.

The amendment, which is expected to generate approximately $2.7 billion in revenue, must be supported by the Greens in order to pass the Senate (the minor party is demanding that the threshold be lowered to $2 million). Earlier this year Albanese ruled out accepting the Greens’ demand.

While the government maintains it has held extensive consultations since the policy was announced, the tax change has sparked criticism from investors and the self-managed super sector, with claims the change will impact farmers, the property market and venture capitalists.

Critics also said that not indexing the $3 million threshold would mean that many more would be affected than the 80,000 people originally expected to pay, and that the tax should not apply to unrealized gains (gains that have not been converted into cash).

Brown told the committee there had been “stakeholder engagement” with the department, including Albanese’s office, on the proposal.

“There have been some discussions in the Prime Minister’s office,” he said. “It’s probably not unusual for this to happen from time to time, it remains illegal and so stakeholders continue to ask questions about the bill.”