What Albo's super changes could mean for you: How it will work, when it could happen and why the taxman will get access to your money sooner

Daily Mail​

05-05-2025

A co-architect of Labor's radical plan to tax superannuation is adamant Anthony Albanese will use his landslide re-election as a mandate to implement a policy experts warn is a threat to retirement savings.
The Senate last year blocked Labor's plan to impose an unrealised gains tax on balances above $3million.
But Labor's re-election means the government could have more senators, increasing the chance of contentious legislation being made into law with help from the Greens.
That means someone with a self-managed super fund would be forced to sell assets like real estate to avoid paying the tax, sparking a warning that radical new taxes could undermine confidence in Australia's $4.2trillion superannuation sector.
In a break from the usual capital gains tax practice, Labor is seeking to slap a new 15 per cent tax on superannuation assets before they were sold, under the new Division 296 proposal.
Outgoing assistant treasurer Stephen Jones said Labor was likely to use its landslide re-election to legislate the superannuation policy, with the government's Senate numbers also likely to improve.
'I think the government's got a mandate to prosecute its policy agenda, the agenda that it took to the election,' he told Daily Mail Australia.
'I'd expect the government to pursue all of the policies that we took to the election including that one.'
But Mr Jones was reluctant to defend the idea of taxing unrealised gains, a policy that hasn't been tried on retirement savings anywhere else in the world, and referred questions to Treasurer Jim Chalmers.
'I'm not going to get into those details, you can raise those questions with Jim and I'm sure he'd be happy to take your call,' he said.
'I'd expect the new government, which won't include me, to pursue all of the policies that they took to the election.'
Wilson Asset Management chairman and chief investment officer Geoff Wilson said taxing unrealised gains, based on the notional value of assets in super, was bad policy.
'Taxing unrealised profits is illogical and unfair,' he said.
'The retirement security of Australians, and indeed the long-term prosperity of our nation, depends on a thoughtful and economically sound approach to superannuation policy, not one with multiple unintended consequences.'
Mr Albanese ruled out super changes ahead of the 2022 election, only to introduce the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023.
'We have no intention of making any super changes… we're making all our policies clear,' he said three years ago.
How many people are affected?
The government argued the plan to impose an unrealised gains tax on super balances above $3million would only affect 0.5 per cent of the population, or 80,000 people.
Financial Services Council modelling put that figure at 500,000 with the threshold not indexed for inflation.
'I think it got the balance right - it was about ensuring that the significant tax concessions, the significant tax concessions, that taxpayers make to retirement savings are appropriately targeted,' Mr Jones said.
'Even after the changes, even people with high balance super above $3million will still have very generous tax concessions.'
How would earnings be taxed?
Labor wants earnings on balances above $3million to double to 30 per cent from 15 per cent.
This was part of a plan to save $2billion a year in foregone revenue.
What are the possible consequences?
Wilson Asset Management released a new discussion paper arguing Labor's new proposed superannuation taxes would erode retirement savings.
'A tax perceived as eroding accumulated wealth, such as the proposed taxing of unrealised gains in super balances over $3million, may lead to reduced savings, increased consumption, or a shift towards less taxed investment options,' it said.
'Conversely, tax policies seen as promoting wealth accumulation can encourage savings and investment. The proposed policy is the former having a direct impact on reducing savings and encouraging people to alternative tax structures.'
This would have the effect of diminishing federal government revenue from taxing super.
'If the tax significantly discourages investment and economic activity, it could lead to slower economic growth and lower overall capital gains across the economy, including within superannuation,' it said.
'This would further diminish the revenue potential from taxing unrealised gains.'
This would ultimately erode trust in Australia's $4.2trillion superannuation system.
'Introducing a tax on unrealised gains could erode public confidence in the stability and predictability of the superannuation system,' it said.
'Australians may lose trust in the system if the tax rules are perceived as constantly changing and eroding their retirement savings. This lack of confidence could further discourage voluntary contributions and undermine the effectiveness of Australia's superannuation system.'
Where do the Greens and Teals stand?
The Greens want the threshold reduced from $3million to $2million, but they generally support the principle of taxing unrealised gains.
During the election campaign, Senator Sarah Hanson-Young said the Greens would push Labor to reduce the threshold.
'In the new Parliament, of course, we will be pushing for making sure that there is a fairer share of these things,' she told Sky News in April.
'People who have millions and millions of dollars in superannuation being able to have special tax settings versus the rest of the population, who are struggling and worried about what their super balance is going to look like at retirement, is there even going to be enough in there?
'My focus is everyday hardworking Australians wondering if there will actually be enough money in the bank, and that's the bulk of workers.
'The people who are retiring on $2million or $3million is small.'
But Teal MP Allegra Spender, who represents Wentworth in Sydney's wealthy eastern suburbs, spoke out against the policy in October last year, a month before the Senate declined to pass Labor's bill.
'Let me explain some of the concerns I have in relation to the taxation of unrealised gains,' she said.
'The first is on principle, which is that this is not money that anybody has.
'So, why the government should tax it is beyond me. As a principle of taxation, it is extremely problematic.'
Climate 200-backed independent David Pocock and fellow senator Jacqui Lambie last year refused to support a bill to tax unrealised gains on super.