Huge call on tax cuts after Albo’s super changes

Prime Minister Anthony Albanese has announced Australians with more than $3 million in their superannuation accounts would have their concessional tax rate doubled from 15 per cent to 30 per cent from 2025.

The change will affect about 80,000 people and would save the budget $2bn per year.

While the major super decision was announced on Tuesday, Labor is still committed to the controversial stage three tax cuts introduced by the former Morrison government.

Greens leader Adam Bandt accused the government of avoiding discussions about the tax cuts in the lead up to the May budget.

“This is all about the government trying to find ways to fund the stage three tax cuts for billionaires and politicians,” Mr Bandt said.

“One of the most expensive items in the upcoming budget is over a quarter of a trillion dollars being spent on $900-a-year tax cuts to billionaires and politicians.

“The problem is, I don’t think much of the money saved by the government’s proposed measure is going to find its way into the pockets of everyday people who are struggling with a cost of living crisis.”

The stage three tax cuts, due to come into effect in July 2024, largely affect medium to high-income earners and are set to cost $254bn over 10 years.

Stage three involves abolishing the 37 per cent marginal tax bracket for those earning $120,000 to $180,000 and creating a flat rate of 30 per cent for those earning between $45,001 and $200,000.

Greens Treasury spokesman Senator Nick McKim said the stage three tax cuts were “the elephant in the room” following the superannuation announcement.

“Modest changes to superannuation tax concessions to help pay for a $9000 tax cut is just a money-go-round scheme for the rich,” he said.

The 2022-23 tax expenditures and insights statement released earlier on Tuesday revealed the revenue foregone from superannuation tax concessions amounted to about $50bn a year, and is on track to cost more than the age pension by 2050.

Senator McKim said that the statement revealed a system that “already favours the rich” and that the stage three tax cuts would make that worse.

“Jim Chalmers is proposing to rob Peter to pay Paul,” he said.

“Any budget that includes the stage three tax cuts makes us a less equal society.”

The government said only 0.5 per cent of Australians would be affected by the changes to the level of tax on super, while the other 99.5 per cent would receive the “same generous tax breaks”.

The average superannuation balance is about $150,000. And of the 80,000 people with more than $3 million in their accounts, the average is about $6 million.