Her comments followed a statement to this masthead on Monday by former prime minister and the architect of superannuation, Paul Keating, who noted that most workers would eventually reach the $3 million threshold.
“Every young person joining the workforce this year will begin and remain at 12 per cent of superannuation contributions throughout their entire working life,” he said.
“This level of contributions and compound earnings will guarantee personal super accumulations in excess of $3 million at retirement, reducing the call by the age pension on the Australian budget to 2 per cent of GDP in the 2050s.”
Shadow treasurer Ted O’Brien said Keating was “dead right” in noting that over time, “millions of Australians” would be affected by Chalmers’ proposal.
“Labor today, under Anthony Albanese, is turning it into a scheme for revenue collection. This is a blatant tax grab,” he said.
“And the younger you are as an Australian, the higher the chances are that you are going to be stung by Labor’s new super tax. Which is why it’s super big, super bad, and Paul Keating is dead right.”
While the proposal is expected to raise $2.7 billion in its first full year of operation, by not indexing the threshold, the revenue take – and its impact on the federal budget – is expected to grow sharply as more people are affected.
In his pre-election budget, Chalmers forecast cumulative deficits of $152 billion between 2025-26 and 2028-29, with the budget not expected to be back in surplus until the middle of the 2030s. Without the increased revenue expected from the superannuation tax change, the budget remains in the red until the 2040s.
In an exclusive interview with this masthead last month, Chalmers would not be drawn on whether the government would consider any more changes to superannuation.
“First of all, let’s try and bed down the changes that we announced two-and-a-half years ago,” he said.
“I haven’t been considering next steps because I’ve been focused on trying to legislate a modest change that we announced at the beginning of 2023.
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“There are views in the community about sustainability of tax concessions there and in other parts of the budget. One hundred per cent of my focus is to try and make the progress that we’ve announced already.”
The Greens in the new Senate, which officially took office on Tuesday, have enough votes to help the government pass its super proposals. They want the threshold to be reduced to $2 million and for that to be indexed to wages growth or inflation.
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