At midday, Chalmers told a packed media conference that the controversial Division 296 tax will only apply to future realised earnings and the $3 million threshold will be indexed.

He also stated that the government will introduce a second threshold at $10 million, which will also be indexed, above which the earnings tax rate will be 40 per cent. The $10 million threshold will also be indexed.

Importantly, the implementation of the tax will be delayed by one year to July 2026 and the tax will also apply to defined benefit pensions to ensure commensurate treatment.

Additionally, the government will boost the low-income superannuation tax offset (LISTO) to $810 from $500 and increase the eligibility threshold from $37,000 to $45,000.

The Treasurer said the net effect on the budget of these changes is a cost of around $4.2 billion over the forward estimates, a large part of which is due to the one-year delay.

“These reforms maintain the concessional treatment of superannuation, but ensure it is provided in a more equitable and sustainable way,” Chalmers said.

Burgess continued that following last week’s debate in Senate estimates it was obvious the government had been looking at modelling of proposed amendments.

“I think [Senate estimates] perhaps forced the government’s hand to come out and say what they've said today,” he said.

“But we welcome this announcement. We've worked tirelessly since this legislation was first released pointing out all the unintended consequences for taxing unrealised capital gains, so we're very pleased that the government has listened to those concerns and has agreed to consult with industry on how to bring this new tax in.”

Burgess said the government will now hopefully work with industry to determine how to deliver an appropriate calculation on earnings.

“We've got the taxing of unrealised capital gains off the table. That's what we've been fighting so hard for, for over two-and-a-half years,” he said.

“That was going to have devastating implications, not just for the SMSF sector, but for the broader community, and we're really happy that the government has finally acknowledged those concerns, and is looking to make changes.”