As reported by The Australian, the modelling uses ASIC’s Moneysmart calculator and data from the ATO and reveals 47,860 people aged between 55 and 59 will pay 30 per cent total tax on their super earnings and unrealised capital gains if the threshold is lowered.
Additionally, nearly 800,000 people under 30 years old would also be impacted by the tax throughout their working life.
The Australian reported that the analysis showed that if the threshold was dropped to $2 million, people who had $1.875m in their super in one year would be pushed to the higher tax rate the following year if their fund delivered a 7.5 per cent return.
If the threshold remained at $3 million and an individual had $2.8 million in superannuation they would be taxed at 30 per cent the following year after a 7.5 per cent return.
Peter Burgess, chief executive of the SMSF Association, told SMSF Adviser that the association has not seen the “numbers or the analysis” behind the claim.
“Looking at the ATO statistics and the ranges it uses, if the Div 296 tax threshold is dropped to $2 million, the accuracy can’t be known,” Burgess said.
The Greens previously said they would support the Better Targeted Superannuation bill through the Senate, where it stalled just days before the election was called, if the government agreed to lower the $3 million threshold.
“I’m not surprised the Greens would propose this reduction, and if the polls are right, we are heading towards a minority Labor government and the Greens’ position on this tax is very relevant,” Burgess said.
“I have no reason to dispute the figures [mentioned in the analysis]. If the threshold is reduced, many more people will be impacted.”
If there were a minority government, or if Labor secured a majority government, the SMSFA’s position would not be changed, Burgess added.
“If it is a minority government, we are back to where we are now. It is unlikely the Labor government would have the numbers in the Senate to pass the bill as it is, so it will be up to the crossbench again.”
He continued that it was now a wait-and-see game.
“If it is a minority government, they will need the support of the Greens to get this bill through, and we will just have to wait and see how the election pans out,” he said.
“Our position hasn’t changed regardless of the election outcome. We don’t support this tax and will continue to oppose it in its current form.”
It’s also a tax on recouped losses. Eg purchase $4m shares in 2024/25. These shares drop in value to $3m as at 30/6/25. In year ended 30/6/26 they grow back to $4m. Even though there is no capital gain (realised or unrealised) for the 2026 year, Div296 creates a $37500 personal tax bill in respect of the year due to being taxed on the increase in the member balance for the year.
This is robbery and needs to be highlighted
This isn’t correct. They would have high water mark as base under the old proposal. The problem is they are attached to the member not the fund. If they day then the losses are lost.
Well you can forget about any evidence on this matter to be considered by the Greens. They are economic neanderthal thugs who are totally captured by Marxist theology. The obvious issue is, if the measure is to raise $2.3 Billion from 2028 year onwards, then that is $2.3 Billion less in the hands of the super fund members which, in turn means that there are less funds available for the payment of super benefits in the future. If that be the case, why on earth do we have superannuation at all?
This is the issue that will be upon all of us if this gets passed in any format. When the government needs more money – which they inevitably do as they can’t seem to stick to a budget – thresholds go up or down depending on what gives them more money and percentages go up and down likewise. Perfect examples are land tax, payroll tax, Medicare levy (it used to be 1%, now its 2%) and personal tax rates and thresholds. The changes rarely benefit the tax payer. By introducing another completely new tax, a tax on non-existent profits, into superannuation, they can then extend it to unit trusts, other trusts and companies, as well as individuals. It is just the way that it is. Because of the track record of government and how they twist and spin the truth, this needs to be stopped now. It has already gone on for over 2 years and we all know the lies and stretching of the truth that has been told to try to get this over the line. The government will stop at nothing to get its hands on this honey pot as they see it. It is not your money, so hands off our life-savings. For them, it is literally the pot of gold at the end of the rainbow, because it apparates from nothing – a tax on paper profits. :/