Crossbench senators have welcomed the Albanese government’s plan to double tax on superannuation balances above $3m, but Labor is under pressure to do more to lift government revenue and boost women’s super balances.
Super funds and the independent MP Zoe Daniel have proposed adding superannuation on to paid parental leave, while the Greens and senator David Pocock want to revisit the stage-three tax cuts and crack down on other concessions.
The treasurer, Jim Chalmers, poured cold water on the suggestion that the money saved could be redirected to other purposes, although the government has said it would like to extend super to paid parental leave when it’s affordable to do so.
On Tuesday the Albanese government announced it would legislate to tax earnings on super accounts with more than $3m at 30%, up from 15%, from 1 July 2025. Those accounts will still be taxed at 15% on earnings from the $3m below the threshold.
The Coalition accused Labor of breaching an “unambiguous” pre-election commitment, saying Anthony Albanese’s statement in May had “no intention of making any super changes”.
Several crossbench senators reiterated they were open to the move.
Pocock said the change to super was a “really sensible move” to deal with “tax breaks that are only benefitting a very small percentage of Australians” – just 0.5%, according to the government.
“When the budget is so tight, I welcome discussion of winding back tax concessions for people who have accumulated millions of dollars of superannuation,” Pocock told ABC Radio.
“Millions of dollars of superannuation is so out of reach for the average Australian. These are the kind of sensible things that we should be doing when we face the sort of budget we face and we see most Australians dealing with huge cost-of-living pressures.”
Pocock said the change was a “good start” but that the government should revisit tax concessions that had become “taboo to talk about”, including the capital gains tax discount.
He proposed capping the number of investment properties eligible for negative gearing tax concessions at one or two.
The Jacqui Lambie Network senator Tammy Tyrrell said it was “great that the government is looking at these changes, and I’m open to them”.
“But there’s nothing on paper yet,” she said in a statement. “I’ll wait until I see what the actual bill looks like before making up my mind.”
The Greens treasury spokesperson, Nick McKim, said Labor’s willingness to revisit super taxes has left the stage-three income tax cuts as “the elephant in the room”.
“Modest changes to superannuation tax concessions to help pay for a $9,000 tax cut is just a money-go-round scheme for the rich,” he said. “Jim Chalmers is proposing to rob Peter to pay Peter.”
The super measure will raise $2bn in its first full year of operation.
Greg Combet, the head of Industry Super Australia, suggested the government should use savings to address “inequities”, including women who take time out of the workforce to look after kids who then “retire with lower account balances”, and invest in enforcement against employers failing to pay super.
Deanne Stewart, the chief executive of Aware Super, said it was “absolutely against constant tinkering with super” but the higher tax rate on balances above $3m “looks to be an appropriate step to ensuring that sustainability and fairness remain central to the system”.
“We would encourage the government to consider using some of the budgetary savings … for initiatives such as paying superannuation guarantee contributions on paid parental leave, or raising the [low-income super tax offset] to improve the financial stability of many women and low-income earners.”
Martin Fahy, the chief executive of the Association of Superannuation Funds of Australia, said it would “carefully assess any unintended consequences, and importantly, the extent to which the associated tax savings will be used to address the gender retirement gap and to boost super balances for low-income earners”.
Daniel, the member for Goldstein, said she was “particularly interested in how the government plans to spend that revenue. She said there was “the potential to add superannuation entitlements to paid parental leave, given that women already have far lower super balances than men and are at greater risk of poverty and homelessness in retirement”.
Chalmers hosed down the suggestion of reinvesting savings, telling reporters on Tuesday that “the purpose of raising this money from superannuation tax concessions is to improve the structural position of the budget”.
The treasurer said that “when we can afford it, we would like to pay superannuation guarantee on paid parental leave”.
The shadow treasurer, Angus Taylor, said Labor had walked away from an “unambiguous … commitment to not add taxes to superannuation”.
He vowed the Coalition would not “be party to Labor breaking an election promise which was very clear”.
Taylor noted the government had “refused to rule out” imposing capital gains tax on Australians’ homes or getting rid of negative gearing.
