Coalition’s super changes will affect three times as many people as Labor’s plan, modelling shows
The Coalition’s superannuation changes will affect three times as many people as Labor’s new package over the long term, according to figures compiled by the Albanese government.
The treasurer, Jim Chalmers, said the figures showed “the Coalition’s dishonesty, deception and double standards” ahead of the resumption of parliament on Monday.
The Coalition has heavily criticised the government for its plan to reduce tax concessions for future earnings on super balances above $3m from 2025‑26.
The shadow treasurer, Angus Taylor, has gone as far as saying it was “very, very tricky” for the government to not index it to inflation and instead keep the $3m threshold fixed over the long term, meaning the number of people affected grows over time.
But the new analysis, based on Treasury projections, compares the impact of the Labor policy with another change to superannuation that the Turnbull government introduced in July 2017.
The Coalition lowered the income threshold for extra contributions tax for high income earners to $250,000. The Coalition similarly did not index its measure, meaning the impact builds over time.
Chalmers asked Treasury to project the impact of the two policies by 2052.
The government said these projections indicated that at least the top 30% of earners retiring in 2052 would have paid additional contributions tax in their working life under the threshold legislated by the Coalition.
That worked out to be three times the proportion affected by the Albanese government’s change in the long term, the analysis finds.
Treasury projects the top 10% of earners retiring in 2052 will have a have a superannuation balance of $3m or more upon retirement – and these are the ones affected by the Labor policy.
Chalmers said Labor’s policy had received “deep and broad support” from the Australian public because it was “a modest and sensible change that helps clean up some of the mess that the former government left behind”.
“All [the Coalition’s] hypocrisy and hyperventilating is to distract from the fact that they [now] want to add to the trillion dollars of Liberal Party debt to fund bigger tax breaks for people who already have tens of millions in super.”
The Coalition has been campaigning heavily on the cost of living before the byelection in the Victorian seat of Aston on 1 April.
Part of its criticism of the super changes has been that the government had obscured its long-term impact, by initially stating that the change would affect less than 0.5% of people with a superannuation account – or about 80,000 people – on introduction in 2025-26.
The Coalition has argued the measure is a breach of trust with voters who were not told to expect superannuation changes if Labor won the 2022 election, but the government has countered this by saying the policy would not take effect until after the next election.
The Coalition’s own change to superannuation was originally estimated to affect only about 1% of people with a superannuation account – or 160,000 people – when it began in 2017-18. But the Treasury projection is that it will end up affecting at least the top 30% of earners retiring in 2052.
The resumption of parliament is likely to bring a renewed debate about the state of the budget, given that the Aukus deal announced last week is expected to cost taxpayers from $268bn to $368bn between now and the mid-2050s.
Most of this forecast expenditure is beyond the first four-year budget period but defence spending will be a key part of deliberations leading up to the May budget.
The projected Aukus cost includes includes $9bn over the initial four-year budget period but $6bn is offset by the amount that had remained allocated for the abandoned French submarine project.
Defence is being asked to fund the remaining $3bn shortfall, which is expected to be found through changes to other defence projects considered in the broader defence strategic review.
The opposition’s defence spokesperson, Andrew Hastie, signalled on Sunday that the defence portfolio should not be spared budget scrutiny, saying there was “always waste in every government department”.
But Hastie told Sky News that the Coalition wanted to ensure the government did not “cannibalise” other defence capabilities. He said the Coalition would run a microscope over the government’s plans and believed defence industry needed certainty.