The Association of Super Funds of Australia says the incoming government should ensure fairness in superannuation tax concessions by supporting the $3 million super tax legislation while ring-fencing and enhancing the low-income tax offset to protect low-income earners.
“These reforms present an opportunity to enhance fairness in the system while preserving long-term retirement savings,” the association said.
At last week’s Momentum Media Election 2025 event, chief executive Mary Delahunty said the handwringing over taxing unrealised gains is being blown out of proportion.
“ASFA believes that the tax on earnings on assets above $3 million is a worthwhile pursuit, the bill and the shape that it’s currently in, obviously has some hairs on it.”
“I’m not as concerned about the taxation of unrealised capital gains as some other commentators are. I think we’re all fairly familiar with land tax, which is also a taxation system that is based on unrealised capital gains.
“Whether or not that means you need to pay the tax at the time, or whether or not there should be some reform done to that bill that would see a debt held over. Those are the sorts of issues I think an incoming government might want to tackle if they want to bring more equity to the tax incentives in superannuation.”
In its official policy priorities 2025 document, ASFA said the super sector’s 2025 policy agenda calls for “targeted reforms that protect and build upon the strengths of Australia’s superannuation system”, including maintaining preservation settings, improving equity outcomes, and ensuring the system remains a pillar of national economic stability.
“Superannuation must continue to deliver strong retirement outcomes for individuals while also playing a critical role in funding infrastructure, housing, and business investment,” it said.
Among its other recommendations is to introduce greater flexibility for retirees to make contributions to their pension accounts.
“This reform would allow retirees to better manage their retirement savings, optimise their income streams, and improve financial security throughout retirement,” it said.
It recommended preventing early withdrawals for property purchases and said the incoming government must ensure that super is not used as a short-term measure in response to the housing shortage.
“Evidence shows that allowing withdrawals for home deposits would drive up property prices while reducing future retirement savings.”
“The proposal would offer limited benefit. Of the 5.3 million eligible first home buyers, over 5 million would not be able to make full use of the policy. Those who would are predominantly higher-income earners who would already have the capacity to purchase property.
“Early release schemes can also significantly erode long-term savings, lead to financial insecurity in retirement and also increase future reliance on the Age Pension – placing greater pressure on government budgets over future decades.”
It also called for enhancing access to affordable financial advice by enacting reforms that improve the availability and affordability of financial advice.
“These reforms should be implemented without delay to provide greater clarity, confidence, and security for superannuation members navigating their retirement planning,” it said.
“An incoming government should establish an accredited education pathway equivalent to AQF5 to support a new class of advisers to build long-term capability in the system and increase access to advice for Australians.”
Well, what can you say when a lobby group supports a decision specifically against the interests of its members – oops, no more lobby group! What can you say when the govt introduces a measure specifically because industry super funds accounting systems are unable to do the job! Lunacy at best, total stupidity at worst. Why would you use a different system to calculate “income” or “assets” than is used normally? Is everyone deranged?
Not us! The issue is the Others because they simply don’t care – they are just desperate for our money and they will do whatever they need to, come what may. Its akin I guess to when someone breaks the law. They know its against the law, but they simply DO NOT CARE. They need desperately need something and they believe that they will get away with it. This whole business reeks of desperation by a desperate government. I hope that they are on their way out as this seems to be the only way to protect our life savings. Geez – we can’t even get our hands on it, other than to pay this tax on basically thin air. A tax on nothing? How does that make any sense at all? Have we truly come to this? When will this current government be open and clear with the voting public please? We deserve an answer, NOW!
Far from hand ringing!! This policy is ill conceived poorly drafted with numerous consequences. The lack of indexing will leave most young workers in a high tax super trap they cannot exit until retirement. It will lead to most people placing the absolute minimum into super as who know what the rules will be in the future!
I assume the ISFA is just a lobby group for the industry super fund with no real consideration for the members?
I love the comparison to land tax.
Justify a new tax based on the most easily manipulated and over used tax currently in existence.
Says it all.
Thanks to the ASFA for raising this. We certainly want some clarity please also as to whether or not the Labor party intends to take Division 296 to the next parliament should they win.
Specifically, we also want to know if the Labor party wants to
1. make any changes to capital gains tax
2. make any changes to superannuation
3. bring in taxes to unrealised capital gains across any entities in the taxation system
4. make changes to negative gearing
We know where the Liberal Party and the Greens stand. As well as demanding an answer from Labor, we should also be asking independents and other parties where they stand as we seem to be at a crossroads of change on these principles in our taxation system as other monies have run dry (due to too much wastage).
An easy one that for Labor.
Same as before the last election:- ‘No intention of making changes to super ‘and we can have it proclaimed aloud by Anthony and catalogued as evidence of their intentions. Just like last time.
As for the rest of the questions, are their answers worth listening to when we have this example still before us and the sitting gov’t holding on to the idea of taxing unrealised gains like a dog with a rat (at least partially at the behest of their industry fund masters)?
We hear a lot about Dutton behaving like a Trump mini-me but this kind of 180 degree swing from pre-election Labor promises paints a very orange tinted pic of Jim Chalmers and Anthony Albanase.
Debt held over!!!!
What an idiotic statement from a vested interest lobby group that wishes nothing but harm confusion and scare mongering for the smsf sector.
I say bring in 296, tax income only (including REALISED gains) and if the afsa members don’t want to spend the money to upgrade their IT systems these members can move to SMSF’s.
Don’t believe a thing from this woman nor the lobby group she’s fronting.
I see that the Labor party and affiliated organisations believe that they have found the pot of gold at the end of the rainbow. They want to tax a piece of paper where no individual or super fund has received any monies. Nothing short of confiscation.
The fairness of the tax concessions come about because the people that pay the most tax in superannuation in the first place, get most back – and far less at that, which makes sense.
The concessions are there to encourage savings, put in place decades ago and the previous governments even encouraged extra funds to be placed into savings over and above the superannuation guarantee. What a turn-around. Now some are deemed to have saved too much. So guess what – the government of the day says “Lets just confiscate their wealth! They have more than enough anyway and we can turn that into more waste! Happy days!”
With regards to housing, I ask this: how is a young person who is having up to 12% of the income saved on their behalf, and then often also paying for further education or a HECS debt, whichever situation they choose in order to pay for their education… how are they supposed to save for a home? A home is the single most secure asset in retirement years. I see merit in holding of compulsory super savings until maybe age 30. Just an idea. That still allows for 35 years of savings towards retirement.
PS: The reason that many have balances in superannuation over $3m is because they have saved for 35 years or so and they will need that to last them another 30 years, with luck. $3m is only $125k – good luck living off that in Sydney.
Hands off our life savings and stop wasting our tax revenue please.
“Whether or not that means you need to pay the tax at the time, or whether or not there should be some reform done to that bill that would see a debt held over.“
So if you can hold over the unrealised gain until it is realised isn’t this a tax on realised gains??
Regardless this endless fiddling with the super system is retrospectively penalising people that have done the right thing and provided for their retirement at a time when they are unable to deal with the change once in retirement.