🧾 What’s actually being proposed?

Starting July, the Albanese government wants to apply an extra 15% tax on earnings from super balances above $3 million. This is on top of the usual 15% tax.

Example: If your super grows from $5M to $6M in a year, that’s a $1M gain. Since only the amount over $3M is affected, 50% of your balance is hit.

So 50% of the $1M gain = $500K → taxed at 15% = $75K in extra tax.

If your super doesn’t grow, or even drops, no new tax is applied — and losses can offset future gains.

🧓 “Just a rich people tax”? 

Right now, this change will hit about 0.5% of superannuation accounts — the very wealthiest.

But here’s where it gets complicated: the $3M threshold isn’t indexed to inflation. That means as wages and costs rise, more and more people could be affected — even if they’re not actually getting “richer.”

📈 According to AMP deputy chief economist Diana Mousina, an average 22-year-old today could hit the $3M mark just by retiring normally.

💥 Who’s mad about it?

A lot of high-income retirees and wealthy business figures. Gerry Harvey (of Harvey Norman) called the plan:

🗣️“Stupidity of the highest order.”

Meanwhile, outlets like Sky News and the AFR — with older, wealthier audiences — have heavily criticised the move.

🧓📉 Boomers still winning?

A recent ANU study found Australians over 60 are still earning post-tax incomes comparable to working-age adults, and much higher than younger Australians.

ABC political editor Laura Tingle:

🗣️“Older Australians are still picking up preferential tax breaks and income support… even as their super balances have increased.”

⚠️ Why younger Aussies should care

Right now, most people under 40 aren’t too worried. But the lack of indexation means the goalposts could move — without you ever getting richer.

There’s concern this could become a “middle-class tax” within decades, simply because people followed the rules and saved for retirement.

🕵️‍♂️ The tinfoil hat theory…

Could this all be a political strategy?

Could it be that Jim Chalmers didn’t index the threshold on purpose — so when the policy gets challenged in Parliament, he can “compromise” and introduce indexation later, looking reasonable in the process.

The Greens, for instance, want to lower the threshold to $2M, which could open the door for political bargaining.

🧮 The takeaway

Right now, it’s a tax on Australia’s wealthiest super accounts. But the lack of inflation adjustment is the sleeper issue. It’s worth noting that this could be something that future governments decide to change.  

But as always with tax changes, it’s not just about who gets hit today — it’s about who gets caught tomorrow.

⁉️THE UPDATE - 22/05/25

This week Jim Chalmers provided some clarity on why the threshold isn’t indexed.

Appearing on Politics with Michelle Gratton, Chalmers said:

“There are so many instances in the tax system where thresholds aren’t indexed, and from time to time governments take decisions to raise those thresholds.”

“I’m anticipating that that’s what would happen here. Some of these calculations about what people’s liability would be in 40 years assume that the $3 million threshold never changes.”

Chalmers also refuted the claims made in the media like that of Diana Mousina. A lot of the calculations that you see reported in the media are based on a pretty unrealistic assumption about what the next 30 or 40 years will look like.