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Labor’s decision to double the tax on super balances above $3 million moves the goalposts yet again, the body says.
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Super tax singles out small group who played by the rules: CA ANZ
01 March 2023
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10 minute read
The government has targeted a small group of people who have followed the rules and left the rest of the country confused about super following the decision to double tax on balances above $3 million, CA ANZ says.
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“How on earth can we expect Australians to invest in their superannuation now when the rules keep changing every few years?” the body asked in reaction to the announcement yesterday. “Who knows what the rules will be when they finally are coming to retirement age?”
Labor claimed the changes, which raise the tax on super earnings to 30 per cent where the balance is above $3 million from July 2025, would hit just one in 200 Australians and raise $2 billion in tax over four years.
But CA ANZ superannuation leader Tony Negline questioned the fairness of the move.
“The target of these changes is a relatively small number of people who played by the rules which the government at the time set and kept for about 20 years between the late 1980s and 2006 against the advice of the industry,” said Mr Negline.
“Investing in superannuation in this country is like trying to shoot a moving target flying in circles over shifting goal posts.
“The lead time is good as the changes will come into force after the next federal election, but it is still a major impact proposed on a small number of people who haven’t done anything wrong – they played by the rules and now the rules have changed.”
“How can we ask people to invest in super now when you won’t know what rules will apply by the time people will need to access their money?”
CA ANZ said previous rule changes included:
- Until 2007: no limit on amounts invested, taxed at 15 per cent.
- 2007: limits introduced, but super became tax free on retirement.
- 2016: $1.6 million limit on after-tax contributions.
- 2017: contribution tax of 30 per cent kicks in for those earning above $250,000.
Mr Negline said there was also the potential for unintended consequences or questions about how the higher rate would be implemented.
“What do we do about people with multiple accounts? I have $1 million in five accounts. Can I choose?” he said.
“Does it apply to unfunded superannuation? If not, why not?
“What distortions will it cause over the next three years? Moving money to safer accounts?
“What impact will it have on divorce settlements?
“Capital gains in super are now taxed at 10 per cent. How will they be taxed under this new policy?”
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