On 28 February 2023, the Australian Government announced certain changes to superannuation tax breaks in Australia that will apply from 1 July 2025.

Currently, earnings from superannuation in the accumulation phase are taxed at a concessional tax rate of 15 per cent.  The concessional tax rate of 15 per cent will continue to apply for all superannuation balances below A$3 million.

However, from 2025-26, the concessional tax rate applied to future earnings on superannuation balances above A$3 million will be 30 per cent.

The next Federal election will be held in Australia by May 2025 at the latest.  Therefore, the above superannuation tax increase on superannuation balances above A$3 million will form part of the Labour Government’s tax policies re-election campaign prior to the next federal election in Australia.

The increase in the concessional tax rate for superannuation balances over A$3 million is expected to apply to 80,000 people.  The estimated additional revenue from the tax rate increases is anticipated to be A$2 billion in the first full year from 1 July 2025.

Other superannuation announcements

In February 2023, the Federal Government also announced a review in respect of objectives of the Superannuation system.  The review will legislate an objective to superannuation to serve as a guide for policy makers, governments, regulators and the wider community.