Labor will pass legislation to increase the tax on those with super balances of more than $3 million, ending a years-long stalemate.<\/p>\n
The tax bill will pass the Senate this week without amendment, after Labor secured the support of the Greens.<\/p>\n
It will affect about one in every 200 super fund holders from July, with balances of more than $3 million to have earnings taxed at 30 per cent instead of 15 per cent, and balances above $10 million to have earnings taxed at 40 per cent.<\/p>\n
From July of the following year, the low-income superannuation tax offset, a top-up contribution made by the federal government, will increase from $500 to a maximum of $810 and will be paid to anyone with taxable income up to $45,000.<\/p>\n
“We welcome this development and thank the Greens for their constructive engagement,” Treasurer Jim Chalmers said in a statement.<\/p>\n
Mr Chalmers tried to pass a similar tax bill during the last parliament, but the proposal had attracted criticism because the $3 million threshold was not indexed to inflation.<\/p>\n
The method for enacting the tax was also controversial because it would have captured “unrealised” gains in the value of any assets held in super funds, which the current 15 per cent earnings tax does not.<\/p>\n
Both elements were changed in a revised proposal, and the $10 million threshold and offset were added, resulting in the policy raising slightly less money per year.<\/p>\n
In 2028\u201329, the new version of the tax will raise $2 billion, whereas the old proposal would have raised $2.5 billion.<\/p>\n