He said retrospective legislation is undesirable, even when foreseen, even though the government has consistently stated that the proposed Div 296 measure has been in the public domain for over two years.

“However, the principle at stake is broader: retrospective legislation, even where foreshadowed and subject to consultation, creates legal and commercial uncertainty,” Ellem said.

“Critically, there remains the strong possibility that amendments may be introduced when the bill is eventually presented. This means the final legislative form and its practical impact could change, and then be applied to, and potentially impacting, actions taken before there was a settled law.”

Furthermore, Ellem said the impact of retrospectivity in law is rarely confined to those directly affected – in this case, the 80,000 the government has indicated will be impacted by the new tax.

“For superannuation, the principle of prospectivity underpins confidence, not just for the so- called ‘top end of town’, but for all Australians who participate in a system designed to operate transparently and under clear rules,” he said.

“Each instance where retrospective changes are made risks setting a precedent. This, in turn, saps confidence in the long-term stability of the superannuation system, undermining the willingness of millions of Australians to engage in long-term savings decisions under the expectation of certainty and fairness.”

Ellem said the recently enacted objective of superannuation – to preserve savings to deliver income for a dignified retirement equitably and sustainably – sets a guiding norm for future policy.

“It raises a critical question: can legislation that undermines certainty through retrospective effect genuinely be labelled as advancing equity and sustainability?”

“There is a disconnect between this newly established objective and actions that erode the integrity of the system through uncertainty and retrospective lawmaking. Superannuation policy, above all, must support confidence and predictability as core elements of its long-term sustainability.”

He also said that although the government has already included the forecast revenue from the tax in its budget, it should not prioritise revenue over sound policy implementation.

“This risks establishing a poor precedent and undermining trust in future reforms. There are compromise options under discussion, including the Greens’ suggestion: lowering the threshold from $3 million to $2 million with ongoing indexation and shifting the start to 1 July 2026,” he said.

“While this would likely result in short-term revenue losses, it potentially delivers increased collections over the forward estimates and, more importantly, root future changes in law that is settled and prospective, not retrospective.”