In a number of interviews on Tuesday, following the swearing in of the new cabinet, Chalmers was asked about the controversial tax that has been garnering increasing media attention since the final weeks of the election campaign.
The proposed legislation has been lambasted not just by the SMSF and financial sector but has been repeatedly criticised by the business industry, including leaders of the corporate sector.
Political opposition has also been gathering momentum, including from former treasurer Paul Keating, who was responsible for introducing compulsory superannuation to Australia more than four decades ago.
It was reported in September 2024 that Keating warned that the plan to double the tax on retirement savings over $3 million could turn superannuation into a low- and middle-income pension scheme and damage community confidence in the $3.9 trillion savings system.
However, on Tuesday, Chalmers said this government had announced the policy more than two years ago and had done extensive consultation on it.
“It is a policy that affects 0.5 per cent of people with balances above $3 million. It is still a concessional tax treatment for people. It’s slightly less concessional. And it helps us fund things like stronger Medicare or tax cuts or cost‑of‑living help, or building more homes. And so it’s an important part of our budget,” he said.
“The calculation of unrealised gains exists elsewhere in the super system. It’s not unique to what we are proposing. It affects very few people. It’s still concessional treatment. It’s been part of our budget for a little while now. It’s been before the parliament for a little while now, and we haven’t changed our approach to it.”
Chalmers said it is not unusual for tax changes to be legislated after a start date and added that he has been making the same point “repeatedly, really more or less since we first announced these changes more than two years ago”.
“This is a modest change which impacts a tiny sliver of the population.”
“And it makes an important contribution to the budget, to priorities like strengthening Medicare, the tax cuts, and building more homes. It’s been in the parliament for a long time now. It’s a modest change that impacts a tiny amount of people and still provides concessional tax treatment for people in super.”
Bring it on, Dr Chalmers. I can hardly wait to show clients how to (compliantly) navigate around your Div 296. Sure, it means extra work… (and, $)
DOES A PENSIONER NEED MORE THAN $3 MILLION IN RETIREMENT?
WHY DO ALL EFFORTS TO REDUCE OUR FEDERAL DEBT GET CRITISED?
Does an investor deserve to be punished for having an illiquid asset on which a fluctuating valuation-tax will be levied that may not eventuate when the asset is realised at a future point?
Do we deserve a treasurer that uses the “extensive consultation” phrase to imply the Div 296 tax is widely accepted?
#f.me
They seriously need to tax the low end of the market.
“Hey, you’ve done well, you’ve got off your arse and actually contributed to society, paid your dues and taxes plus some.. likely even employed people which has put food on the table for other by means of being productive and proactive.. but no f.you, for all your blood, sweat and tears let’s just keep taking from the top end of town.. let’s face it they can afford it”
How about this politicians, let’s scrap your pensions and ongoing payments outside of super… Let’s see how money EVERYDAY Australians will save.
Why not, unless for medical reasons, the lower unproductive end of town have a lazy tax! Get off your arse and actually be productive.
Go to fast on a highway, you get a fine. Go to slow, you get a fine!
Pretty selfish viewpoint- I, I, me, me, me… Sorry, $3 million in super is extremely wealthy in this country and basically, they can afford this tax. ‘Tax the low end of the market’ you say- what a vile creature you are Trumpet.
Just so you are aware based on a simple compound model, a person who is 25 years old today on an income of $80,000 a year [note according the Australian Bureau of Statistics the mean wage in Australian is between $100,000 and $102,742 for 2025, meaning way more than 50% of all Australians earn more than $80,000] and taking up a 2.5% CPI wage increase each year and 8% annualised growth on their superannuation, that person will have more than $3m in super before they retire. So please, don’t take the view this only applies to the “extremely wealthy”.
Compulsory lifetime annuities at retirement will also be legislated by Labor and the Greens in the term of government. Confiscation of your superannuation capital is coming. According to Comrade Jim the government needs to give you confidence to spend your money in retirement rather than hording your superannuation. Superannuation was apparently not meant to be a mechanism to leave an inheritance. Comrade Jim sees the solution as industry super funds providing compulsory lifetime annuities so they keep your capital. Who exactly benefits from this.
Industry Super and the agenda of?
wasnt the purpose of super is to replace pension at the first place? its not meant to be a tax haven for the rich to shelter their money and get passed to their next generation.
The movement of excess funds to investment bonds (including within trusts) may reduce tax revenue 3 ways:
1. Lower the balance against which Div 296 applies
2. Lower the amount subjected to super death benefits tax
3. Whether held within trusts or directly, investment bonds do not make distributions thereby reducing the personal tax for HNW clients.
Entrepreneurs will also move to jurisdictions like Singapore…
The middle class will keep getting hammered…
Hey Jim,
“The calculation of unrealised gains exists elsewhere in the super system. It’s not unique to what we are proposing”
Please explain in full detail Jim ?
This is definitely one piece of insane legislation that will be wiped when the Coalition is eventually re-elected.
Now you can see the benefit of using your super to pay out your home mortgage instead. Particularly when all 22 yr olds will be impacted by this new NON INDEXED unrealised capital gains tax by the time they retire.
The dumb rhetoric is typical of all politicians. “We have done extensive consultation…” WHO CARES when the consultation is only with “yes” toadies. Stupid legislation and unfair theft is still stupid and theft, no matter what “consultants” indicate, and the general population and specialists CONTINUE to provide that feedback.
ANY taxation of unrealised gains or a floating balance is inappropriate FOREVER.
I wonder what is next? A tax based on your overall wealth (assets inside and outside of super)? A death tax?This is just the start of it…
There is already a death tax on assets, payable to the Supreme Court before probate is granted.
Well 0.5% of the population is 141,000 people with that number growing by a large number each year without indexation…
Labor can’t keep their dirty hands off Australians superannuation money that they worked hard for. Nothing more than thieves.
Watch what the smart investors do (many who would received advice) to circumvent this tax robbery…
This is a truly mind blowing policy. The taxing of unrealised gains is a disaster waiting to unfold, and all it will do is drive the rich to invest in structures offshore. The tax will never raise anything like the $2.3bn pa which is pencilled into the budget long term because investors will rapidly change their behaviour to make sure they are never caught inside the tax.
You know what this does it sets a precedent you think they will stop at 3 million. they will reduce this back down to catch most retired people goes down to a million, 500k when does it stop.
This is not a modest change for the people impacted by the tax on unrealised gains. As a minimum, Chalmers needs to amend the proposed legislation so that people younger than retirement age, who are otherwise trapped in the super system, are given the option as a condition of release for the excess amount over $3 million in super for each year they are assessed as over the $3 million total super balance. This would be similar to the treatment of excess concessional contributions that may be withdrawn if over the cap.
Spin and more Spin …. and no actual truth!
How about being ethical and telling the truth and the whole truth!
Oh, i forgot …. politicians do not really have too, only sell the allusion that they do.
How about telling everyone that the $3M is not indexed and in the not-too-distant future more and more Australians will fall into your Net.
Also, Mr Chalmers please confirm, will your Defined Benefit Super and your Politician Mates Superannuation also be subject to capture with your proposed legislation
All politicians are exempt from the tax.
Asset confiscation. Something you would expect in a banana republic!
Someone remind me where unrealised gains are taxed again…oh that’s right, they aren’t. Unrealised gains affect the compulsory cashing of pensions. That’s about all I can remember. Not taxable income and not tax payable.
My primary concern is that there is no mechanism for tax paid to be clawed back if there is a subsequent drop in the value of the asset. Its bad policy and even worse draft legislation
Hey Jim, why are you wanting to tax Unrealised Capital Gains and not simply tax the Income earned from Assets over $3 Mill ?
Oh that’s right, Industry Super Funds can’t calculate income earnings separately from capital gains.
So you design the tax rules to suit Industry Super Funds.
Corrupt ALP & Industry Super at their worst yet again.
Taxing unrealised capital gains in superbis just the beginning. How long before they turn their attention to assets outside super?
The legislation has been drafted in a way that will enable them to be used on other assets in the future. With Labor, it’s always been their belief your money is theirs too.
The primary concern is that the amount is not indexed. Although it currently affects only a small portion of the population, it is anticipated to affect a significantly larger number of individuals in the future.
spot on!
welcome to the party that wants to crucify you for having a go and being successful and encourages laziness by increasing welfare on a regular basis….. lets see how many taxes are increased by the end of their next 3 years
“extensive consultation”