Liberal Senator Simon Birmingham has successfully moved a motion requiring the Albanese government to table modelling detailing the estimated impact of its proposal to lift the concessional tax rate for super balances exceeding $3 million, from 15 per cent to 30 per cent.
The motion, passed on Wednesday (8 March), requires Labor to disclose Treasury analysis by Thursday, 16 March.
This comes amid doubt over the Labor government’s initial claims, with opposition and industry stakeholders fearing the changes would have unintended consequences.
Upon announcing its proposed reform, the Albanese government said the changes would impact 0.5 per cent of superannuation balances, or approximately 80,000 Australians.
But during question time on Monday (6 March), Minister for Finance Katy Gallagher revealed up to 10 per cent of balances could be hit with a heavier tax burden.
“In 30 years, Treasury projects that roughly only the top 10 per cent of earners will retire with superannuation balances around $3 million or more,” she said.
An analysis from the Financial Services Council (FSC) also revealed approximately 500,000 superannuation balances could be impacted if the concessional tax rate is not indexed.
The government has been accused of hiding the modelling to downplay the true impact of its proposed reforms.
However, Assistant Treasurer Stephen Jones has dismissed modelling relating to the impact of the super tax reform’s absent indexation.
“It’s about as meaningful as saying that we’ve got modelling that says if wages don’t go up over the next 30 years, then Australians, all Australians, including those on $100,000 salaries, are going to be on the poverty line,” he said.
Labor’s proposed changes to the concessional tax rate, which would apply from July 2025, would not be retrospective, applying only to future earnings.
The reform, to be proposed in this year’s budget, is tipped to contribute $900 million to the bottom line over the forward estimates and approximately $2 billion in the first full year of revenue after the election.
The government’s super announcement coincided with the release of the 2022–23 Tax Expenditures and Insights Statement, which revealed superannuation tax concessions amount to about $50 billion a year — projected to exceed the cost of the Age Pension by 2050.