Tax rate increased for Aussies with super balances above $3 million

Prime Minister Anthony Albanese said from July 1 2025, Australians who have a superannuation balance over $3 million will be taxed at a concessional rate of 30 per cent, up from 15 per cent.

“This proposal does not change the fundamentals of our superannuation system,” he said.

“99.5 per cent of people with superannuation are unaffected by this reform.”

Albanese said the changes will impact around 80,000 Australians.

The changes will come into effect after the next election and will not be retrospective but will rather apply to future earnings.

Albanese said the reform will make the country’s $3.3 trillion super system more sustainable.

“The savings that are made from the reduction in these tax breaks will contribute $900 million to the bottom line over the forward estimates,” Albanese said.

“And some $2 billion when it is operating on a full-year period.”

Treasurer Jim Chalmers said the “modest adjustment” to change tax concessions for $3 million balances isn’t about diminishing anyone’s super balance.

“We want to make that clear. If you have done well in super, that’s a good thing,” he said.

“We’re not going out of our way to begrudge people who have done well for themselves.

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“We want to make sure that whatever we provide in the tax system is fair.”

Chalmers said the average superannuation balance is about $150,000 and the number of Australians who have more than $3 million in their super all the way up to $400 million is very small.

Chalmers added the superannuation tax concessions cost the government around $50 billion a year.

“Every dollar spent on a tax break with tens of millions of dollars in super is a borrowed dollar that makes the deficit bigger,” he said. 

Chalmers said people with more than $3 million in their super balance or the 1 per cent of Australians will still receive some concessions on their retirement fund.

“There will still be tax concessions for you, they just won’t be quite as generous as they were before.”

Albanese emphasised that the 99 per cent of Australians with balances below $3 million will not be impacted by any superannuation changes during Labor’s term.

“There will be no changes, no changes, this term, even this change is pointing towards 2025,” he said.

“Now, we can’t be clearer, not just in our words, but in our actions.”