Anthony Albanese warns of ‘wealth tax’ that could hit thousands of Australians: Here’s what you need to know about the planned super shake-up
Center for Independent Studies worried about Labour’s super plan dubbed ‘wealth tax’
Anthony Albanese’s planned super shake-up has been described as a ‘wealth tax’ that could discourage Australians from investing in their retirement.
The Prime Minister and Treasurer Jim Chalmers are heading into the next election with plans to double the rate of tax relief for superannuation savers of $3 million or more.
If Labor is re-elected, the richest 0.5 per cent of the population will see the concessional tax rate on their super contributions double to 30 per cent – from 15 per cent as of July 1, 2025.
The Center for Independent Studies, a conservative think tank, described it as a ‘wealth tax’ that would discourage the wealthy from investing in super to avoid paying more tax.
Anthony Albanese’s planned super shake-up has been described as a ‘wealth tax’ that could discourage Australians from investing in their retirement (the prime minister is pictured with his girlfriend Jodie Haydon)
Robert Carling, a senior fellow, compared it to a land tax where someone was taxed on unrealized capital gains, in a submission to the Treasury that was released on Thursday.
‘In effect, the proposed calculation of earnings would make the new tax a wealth tax – or at least, a tax on the annual increase in this component of a person’s wealth,’ he said.
‘There is no comparable tax in Australia other than the state land tax.
‘Thus, for the first time in the Australian system, it includes unrealized capital gains.’
The Center for Independent Studies argued that Labour’s proposal would discourage the wealthy from investing in jobs.
The Center for Independent Studies, a conservative think tank, described it as a ‘wealth tax’ that would discourage the wealthy from investing in super to avoid paying more tax (Image: Sydney’s Royal Randwick Racecourse)
‘Another consequence will be that people affected by the change will do their best to avoid it by reducing their total super balance below $3 million – or even get out of super altogether,’ it said.
The federal government argued the proposal would affect only 80,000 Australians, but the Financial Services Council, which represents retail super funds, argued it would hit 500,000 people over the coming decades if it was not indexed for inflation.
Labour’s Better Targeted Superannuation Concessions proposal, announced in March, is designed to free up $2.3 billion in annual revenue in the Budget.
But the Center for Independent Studies said the policy would only encourage tax avoidance.
‘Any claim of significant additional revenue is questionable; As the new tax is likely to be met with strong tax-avoidance behavioral responses as listed above,’ it says.