For decades, Australians have relied on the stability and predictability of the superannuation system.

Traditionally, Aussies only pay tax on their super's capital gains when selling an asset—meaning Aussies are being taxed on the profit they made, not on paper increases.

However, that could all change under Labor's latest proposal.

The Albanese government has been pushing a controversial new superannuation tax policy.

This change could have a significant impact on the nest eggs of many Australians, especially seniors and those with larger balances.

The government wants to introduce a 15 per cent tax on 'unrealised gains' for super balances above $3 million.

Seniors may have to keep an eye on their superannuation should the proposal push through. Image Credit: Pexels/Tima Miroshnichenko

With the proposal, Aussies with the said balance could be taxed on the increase in value of their super assets—even if they have not sold them and not pocketed any profit.

The change could be a radical departure from the way things worked and has raised eyebrows across the country.

After a sweeping election victory, Prime Minister Anthony Albanese and his team believed they had a strong mandate to implement the policies they campaigned for, including the new super tax.

Labor's national president, Wayne Swan, stated that the government now has 'a broad mandate for policies that it put before the people'.

Who will be affected?

The proposed tax change should target Australians with super balances above $3 million.

While it might sound a lot, it's not just the ultra-wealthy who the new rule could catch out.

Many self-managed super fund (SMSF) members, small business owners, and retirees who have worked hard to build up their savings could find themselves over the threshold.

With the tax being on 'unrealised' gains, Aussies who met the said criteria could be forced to pay tax on increases in value despite not selling anything.

Some experts warned that this change could force retirees to sell assets just to pay the tax bill.

Is this normal?

The idea floated in the United States, but it was quickly dropped.

In Australia, the proposal has already faced resistance from crossbench senators and independents.

What are the critics saying?

Swan, also the current Chairman of Cbus Super, has been careful not to defend the policy directly.

Meanwhile, independent senators like David Pocock also raised concerns about the fairness and practicality of taxing unrealised gains.

The Greens, for their part, want the threshold lowered even further to $2 million.

Wilson Asset Management's Founder, Geoff Wilson, warned shareholders about the tax plan and how it could affect small business investment in the country.


'If you want to destroy innovation, if you want to destroy entrepreneurialism—what is Australia all about? It's about giving people a chance to have a go, and this is what it's destroying,' Mr Wilson said in an interview.

'I was talking to someone that works in a technology hub recently and he said 50-60 per cent of the money that comes into those small technology companies comes from our self-managed super funds.'

Prime Minister Albanese addressed several questions about the said proposal in an interview. Watch here:

Source: Sky News Australia/YouTube​

'So even though Mr Albanese is correct in terms of the tax only affects a very small number of people in terms of paying extra tax, it actually affects every Australian in terms (of the fact) the $4.2 trillion is now going to be not going to be productively invested,' Mr Wilson added.

Seniors with a super balance under $3 million won't be directly affected by the new tax, at least for now.

However, with inflation and rising asset values, more and more Australians could be over the threshold in the coming years.

If you have a self-managed super fund, own property in your super, or are planning your retirement strategy, it's more important than ever to stay informed and seek professional advice.

Whether you're directly affected or not, it's a reminder that the rules around retirement savings could change, sometimes quickly and dramatically.

Key Takeaways

• The Albanese Labor government proposed a new superannuation tax.
• Labor wants to tax unrealised gains on superannuation balances above $3 million.
• The policy could force some with self-managed super funds to sell assets in order to pay the tax.
• Critics from wealth management firms believed that the proposal could be detrimental to Australians in the long run.

Are you worried about the new super tax? Do you think it's fair, or do you see it as a raid on your hard-earned savings? Have you made changes to your retirement plans before because of government policies? Share your thoughts and experiences in the comments below.

 

[IAN3005]

Thank heavens i dissolved my super years ago...the mongerel bastar* won't get his hands on a cent of mine.

 

[Jest]

you put the bastard back in, now you take the consequences. suffer.

 

[Jest]

What a lot of rubbish they can tax me anytime when my 50.000 gets to 3 million.

a typical selfish remark. there are others apart from you.

 

[Jest]

A dozen hells would need to freeze over, before I would ever think of voting for "no personality Dutton" and his nuclear garbage.
Albanese, in my eyes, is the better of the two demons. Also, with Dutton thinking he can make our health system like the US, Dutton committed political suicide. If he was too stupid to see that, he's definitely too stupid to lead a country. He had no hope and I was never worried he would ever be Prime Minister. What a fool.
I have way less than $100,000 in super and I'm on DSP, so I don't think the super changes will EVER affect me.

i know who is the stupid one. talk of dutton is old news now, rest on your laurels and dream of albo.

 

[Jest]

You clearly have no idea about how voting and the count works, so you follow the conspiracy nutjobs who say the election was rigged. What nonsense. They called the winner early, in your mind, because of the way the voting was going. When there's a large move in one direction with the early counting you are not going to suddenly see a massive swing the other way to offset the early swing and than make the other side ahead by a large amount. That's not how counting works, no doubt though you'll keep the stupid conspiracy thinking going. Strange how the Libs haven't said a thing about that, why, because they know the count was right and they knew BEFORE the election where they stood. Guess what, not everything is released for public information before an election.

she put her view in and your reply is just, guess what, nothing of interest.

 

[Jest]

What a load of BS,where did Dutton say that or anything like it. It was just another Labor lie, and seems like the vast majority of Australians fell for it, hook, line and sinker. We're all going to pay the price for voting these fools in.

agree, but some just have to put down the obvious 3,0000

 

[mykl]

This would penalise those who have been frugal and provided for their retirement.
They do not receive or apply or are eligible for a government pension or the various rebates granted eg. reduced power and license fees.
They are self funding their retirement and not relying on government handouts.
Thereby saving the government, and by extension, the taxpayers probably billions of dollars
Labor and the Greens seem to have the desire to reduce all of us to the Lowest Common Denominator, instead of trying to raise everyone to the Highest Common Multiplier.
grumpyoldman

 

[Wombat2u2004]

For those who voted for the twat Albo.......this is only the beginning.
You will reap what you have sown....stay tuned.