“It’s no secret there is opposition to this tax within the Labor party ranks, but it remains to be seen whether this will be enough to convince the Treasurer not to proceed.”

The Australian Financial Review reported on Friday (5 September) that anonymous sources revealed the government had paused its plans to introduce the $3 million super tax in its current form.

It continued that while no decisions had been made, internal discussions had been held in recent weeks as the Prime Minister’s office takes an increased interest in the policy.

Burgess said he believes one of the government’s key concerns is the timing of the determinations – specifically, when those impacted by the tax would need to report.

“Though this has been talked about before, the first round of determinations will be issued in 2027 which is in the lead-up to the next federal election, and we know that is a consideration,” he said.

“The government is obviously very concerned about the taxation of unrealised capital gains, and the unintended consequences that flow from that. I think the other thing is that the government is trying to position the Labor Party as pro-aspirational, and if it is genuine about that then you can't get a better example of a tax on aspiration than this tax. It is completely at odds with what it’s trying to achieve in terms of encouraging innovation, productivity and aspiration so, there is little wonder there is growing opposition to this tax from within the Labor party ranks."

He continued that a tax on unrealised capital gains in a sector, which is a key contributor to venture capital and funding for start-ups, would be detrimental for the government.

Burgess added that there have also been concerns expressed by large APRA funds that would have to change their processes and reporting obligations.

“We know that one of the implications of this tax is that funds will have to re-report balances for people that have defined benefit pensions, and it's messy, costly, and as we keep arguing, there are other ways to go about achieving what the government is trying to achieve that don't have these unintended consequences.”

The recent Economic Reform Roundtable focusing on productivity sparked another round of concerns as the tax was increasingly seen as anti-innovation and anti-aspirational.

“It's very hard for the government to be arguing that it stands for innovation when it's got a tax like this on the table. I think that's probably what the backbench and Labor Party members are pointing out – that it's completely inconsistent with the government’s policy positioning,” Burgess said.

“The other issue here is it's becoming increasingly difficult for the government to start this from 1 July 2025, and that's what we've been trying to argue as well. Obviously, we would prefer to see this tax scratched, but if that's not possible this delay will hopefully give industry an opportunity to sit down with government and discuss alternatives, because we haven't been given that opportunity.”

It was not surprising, he added, to see the rumours of delay surface now, given the legislation has not yet been listed for debate.

“You must wonder why that's the case, given that the government has been saying it believes it had a mandate for this tax, but we haven't seen it yet. That suggests that something's going on behind the scenes.”

“We know the government hasn't had discussions with the Greens, although it was confident it would be able to get their support, so it seems the biggest issue now is support from with its own party.”

Geoff Wilson, founder and director of Wilson Asset Management, who has been running a campaign against the tax, said it seems the Prime Minister is listening to the Australian public.

Wilson released three research papers on the tax highlighting its impact on productivity, innovation and lastly on the fallout it would have if instituted on various postcodes regarding future voting trends.

“I sent those research papers to all participants of the roundtable and a few of them came back to me with specific questions,” he said.

“There was quite a bit of discussion about the insanity of taxing unrealised gains. In our own proposal to the round table, we indicated our main proposal was just about taxing unrealised gains because of the impact it has on productivity.”

Wilson said that there is a “glimmer of hope” that “sanity will prevail”.

“It’s an insane tax and very negative for Australia's productivity. To me, if what we're hearing is true, then good on Anthony Albanese for standing up for sanity.”