While the updated proposal removes the taxing of unrealised gains the new framework — based on realised earnings — still fails to deliver a fair or practical outcome.
Superannuation was built to encourage disciplined, long-term saving — not to become a testing ground for stealth taxation. By layering an extra 15 per cent tax on realised earnings above $3 million and 40 per cent beyond $10 million, the government is punishing the very people who invest in Australia’s future — and potentially signalling the start of a broader wealth-tax agenda.
A complex fix that adds cost and confusion
Under the revised Division 296 model, super funds will be required to track and apportion realised capital gains at the individual member level. This creates significant administrative and compliance challenges for both SMSFs and large APRA-regulated funds.
Even the most sophisticated funds will face higher accounting, system, and audit costs, and those costs won’t stop at large-balance members — they’ll flow through to all Australians saving for retirement.
The SMSF Association has echoed these concerns, warning that using realised earnings introduces new layers of complexity and potential for unintended consequences.
Distorted investment decisions and weaker growth
Furthermore, taxing realised earnings will distort investment behaviour — incentivising members to delay or manipulate the sale of assets to manage tax outcomes.
This kind of policy tinkering discourages efficient investment and undermines market confidence. If capital is pushed offshore or into lower-growth assets, the entire economy suffers.
A step toward a broader wealth tax
Beyond the immediate effects on super, the policy sets a worrying precedent.
Once government starts taxing accumulated savings within super, I believe it’s only a matter of time before similar principles are extended to family trusts, private companies, and other investment structures. The Treasurer’s refusal to consider simpler, fairer alternatives suggests this isn’t just about revenue — it’s about reshaping how private wealth is taxed in Australia.
Erosion of trust in superannuation
Repeated policy changes are undermining confidence in the superannuation system.
Australians have built their retirement plans around stability and consistency. Moving the goalposts again sends a dangerous message — that super is no longer a safe, predictable environment for investment.
A missed opportunity for genuine reform
The government had the chance to design a clear, low-cost, practical model that preserved simplicity and confidence. Instead, we’ve ended up with a policy that creates confusion, distorts behaviour, and risks long-term economic harm.
The Div 296 tax might no longer target unrealised gains — but it still targets the wrong problem, in the wrong way, at the wrong time.
