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Jim Chalmers finally reveals the specific changes he is making to the nation’s retirement system, revealing for the first time how the new system will work.
- Treasurer Jim Chalmers describes the super crackdown
- This affects those with $3 million in retirement savings.
Treasurer Jim Chalmers has revealed that Australians with more than $3m in retirement savings will no longer be able to afford an ultra-low concessional tax rate.
Australians can deposit up to $27,500 a year into their super and pay a low tax rate of just 15 per cent.
But from July 1, 2025, Labor wants those with more than $3 million in their super to pay a higher tax rate of 30 per cent.
These 80,000 people are among the top 1 percent of retirement savers.
Prime Minister Anthony Albanese appears poised to carry that policy to a 2025 election, which would make him the first prime minister since John Howard in 1998 to fight a contentious re-election campaign over personal tax reform.
Treasurer Jim Chalmers (pictured with his wife Laura) has revealed that Australians with more than $3m in retirement savings will no longer be able to afford a favorable tax rate.
Cracking down on 80,000 Australians with $3m in retirement savings would give the government $1bn in foregone revenue, but the 15 per cent concessional tax rate costs the budget more than $50bn each year.
The concessional rate is significantly lower than the marginal income tax rate 45 for those making more than $180,000 a year, and that threshold will increase to $200,000 starting July 1, 2024 when the tax cuts for Stage Three.
With gross government debt approaching $1 trillion, Dr. Chalmers and Assistant Treasurer Stephen Jones issued a joint statement arguing that a crackdown on supers was necessary to fund defense items for the National Insurance Scheme. of Disability.
“Since we came into government, we have been outspoken about the challenges facing the economy and the budget,” they said.
“We inherited a trillion dollars of debt, as well as mounting spending pressures on defense, health, elderly care and the NDIS.”
Two-thirds of retirement tax breaks go to the top 20 percent of income earners and less than 1 percent of people have super savings of more than $3 million, and that group has an average pool of $5.8 million. .
Dr Chalmers released the Tax Information and Spending Statement on Tuesday outlining the Labor Party’s proposals to reduce super-tax concessions.