CPA Australia welcomes common-sense changes to proposed $3m super tax

• Tax on unrealised capital gains would have been unjust
• Indexation of super balance thresholds vital to protect future generations of workers
• Increase to LISTO to benefit lower-income Australians 

Australia’s largest accounting body, CPA Australia, today welcomed Treasurer Jim Chalmers’ changes to the government’s proposed $3 million superannuation tax. 

Superannuation Lead Richard Webb said the revisions followed months of campaigning from industry groups and stakeholders. He said Parliament should legislate the changes.

“The government has listened to our concerns. The outcomes will help make Australia’s superannuation system fairer and more equitable,” Mr Webb said. 

“The indexing of the Division 296 proposal and taxing of realised earnings will ensure that Australia’s superannuation system remains fit for purpose for future generations.

“If legislated, this change is expected to benefit millions of low-income earners by improving their capacity to contribute to superannuation and build long-term retirement savings.”

Mr Webb said that if the $3 million balance threshold had not been indexed, it would have eventually impacted a greater number of Australians than was acknowledged.

“We are pleased that the government has listened to our feedback and made these common-sense changes,” he said. “Policymakers have a duty to ensure that the spending power of future retirement savings is preserved.

“Bracket creep already has a silent eroding effect on personal finances. Allowing further erosion of superannuation savings would have been contrary to the fundamental principles of our tax system.”

CPA Australia is also relieved to see the government change course on its plan to tax unrealised capital gains as part of its reforms of superannuation.

“This was a particularly egregious element of the government’s initial proposal,” said Mr Webb. “Providing certainty and financial stability for this and future generations of retirees is critical. Taxing unrealised gains would have distorted our tax system, which needs broader reform.”

Mr Webb said updating the low-income superannuation tax offset (LISTO) to $810 from $500 and increasing the eligibility threshold from $37,000 to $45,000 are positive and long-overdue steps that will help ensure more Australians – especially women and part-time workers – are not left behind when it comes to retirement savings.

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