I have no idea why every news article on this matter makes it sound like everyone should be against these changes. Superannuation has for decades been a neat place to dump surplus salary to get it taxed at a lower income tax rate.
Under the superannuation tax changes, the concessional tax rate on earnings for balances between $3m and $10m will double from 15% to 30%.
Balances above $10m will be subject to a new, higher 40% rate.
Most of us are not affected by these changes. I truly, genuinely wish I were affected.
I have no idea why every news article on this matter makes it sound like everyone should be against these changes
Broadly speaking: because news corporations aren’t owned by normal people. Reporting this kind of (mild, but nonetheless real) attack on the most wealthy in a positive light is a sure way to get censored and disciplined by the company.
Quoting the print and digital media section of GetUp’s media diversity report (2021):
- News Corp is the dominant owner of Australian print and digital media, controlling 59% of metropolitan and national readership — up from 25% in 1984
- Nine is the second-largest media owner with a combined 23% readership share. Seven West Media Limited has 15% of the market by readership (eureka’s note: 59+23+15 = 97%)
- News Corp now controls the majority of local and regional newspaper titles in Australia
It doesn’t take much digging into these three companies’ major stakeholders to find key people with net worth in the billions. And unless you’re going out of your way to avoid them, most news articles you’ll see are controlled by this upper owning class through various filters (incl. board selection of executives, editorial policy, advertiser pressure).
If you retire at 60 with 3 million in super, you could spend $70k per year for 40 years
With $3m in super, you could draw $100k/year and assuming 5% growth you’d have over $3.5m after 10 years:
Year,Starting Balance,Withdrawal,Interest Earned (5%),Year-End Balance 1,"$3,000,000","−$100,000","+$145,000","$3,045,000" 2,"$3,045,000","−$100,000","+$147,250","$3,092,250" 3,"$3,092,250","−$100,000","+$149,613","$3,141,863" 4,"$3,141,863","−$100,000","+$152,093","$3,193,956" 5,"$3,193,956","−$100,000","+$154,698","$3,248,653" 6,"$3,248,653","−$100,000","+$157,433","$3,306,086" 7,"$3,306,086","−$100,000","+$160,304","$3,366,390" 8,"$3,366,390","−$100,000","+$163,320","$3,429,710" 9,"$3,429,710","−$100,000","+$166,485","$3,496,195" 10,"$3,496,195","−$100,000","+$169,810","$3,566,005"“But $100k won’t be enough in ten years!” I hear you say. Ok, let’s give ourselves a 10% pay-rise every 10 years.
Year Range,Annual Withdrawal,Year-End Balance (End of Decade) Years 1–10,"$100,000.00","$3,566,005" Years 11–20,"$110,000.00","$4,355,900" Years 21–30,"$121,000.00","$5,497,281" Years 31–40,"$133,100.00","$7,196,668"With a starting fund of $3m, and a 10% payrise every decade, after 40 years we have over $7m in our super fund. Now, what happens to our poor rich person who needs to pay 30% on growth above $3m?
Year,Annual Withdrawal,Ending Balance,Annual Tax Paid 1,"$100,000","$3,045,000",$0 10,"$110,000","$3,472,749","~$6,144" 20,"$133,100","$3,871,911","~$12,048" 30,"$161,051","$4,110,378","~$15,716" 40,"$194,872","**$4,052,857**","~$15,271"Instead of ending up with $7m after 40 years, this poor individual now only has $4m after 40 years.
As I said, I really wish I had this problem!
Sure $3M would be a nice ‘problem’.
But I’m more concerned about poor suckers like me and maybe you.
Your key assumption is that the asset value never goes down. And you are ignoring the impact of inflation.
We are looking at long terms here, and when and where things happen matters.
So, in the case of a ‘comfortable’ $800K (lol i wish). Well, if the market tanks, that could easily be 400K. Not so comfortable now? And the $50K a year you were taking out, maybe you have to halve that to make it last. Oh, and whatever you were drawing out? $50K in 10 years time, assuming 4% inflation, is only worth 2/3 of whatever you take out today. And if you start budgetting for increased health care and aged care as you grow older, well…
Even this has a large dose of ‘assumes the status quo’ in it
This article is discussing a tax on earnings in super funds above $3m.
I think that people who are earning more than my annual salary just from growth in the value on their pile of cash should be charged tax on that growth.
They can afford it better than any of us, and I’m always amazed at people who think this is a bad thing.
None of the present changes apply to your examples.
Perhaps that’s the answer to my question: people criticise this tax because they worry it’ll affect them?
If you have $3m in Superannuation, with a standard 6% ROI annually, you could spend $180K of “earned interest” every year without ever touching your principal.
Because wages are inadequate and passive wealth or capital inheritance are the new pathway to upward social mobility. It’s not that I think most people think like this (yet), but news articles are mostly written by people from wealth now, because who can live on a journalist wage these days.
People with inadequate wages don’t have $3m super accounts. This law affects 0.5% of Australians.
but news articles are mostly written by people from wealth now, because who can live on a journalist wage these days
That’s a bold claim; I don’t disagree that journalists are generally underpaid, but none of the journalists I personally know are particularly wealthy afaik. (Obviously this is my anecdotal experience)
Although furthermore, journalists don’t have to be wealthy to be pressured into writing in support for the wealthy. This is a systemic part of how major news companies are run to satisfy their ultrawealthy major stakeholders (see my other comment: TL;DR ~97% of news readership funnels up to News Corp, Nine or Seven). Someone trying to write articles against the interests of the company owners won’t last long.
General reminder to the people reading this article: whether they understand or not, someone with a net worth of 10 million is a hundred times closer to a houso than they are to a billionaire.
Very good points. I withdraw my comment as it was definitely an overreach.
And there’s definitely times where there are wealthy journalists/writers too, so I see what you mean. I can think of many US/international grifters who adopt a rustic, masculine, working class image but have university backgrounds in media production and rich parents funding their art careers. Relevant video
Interesting last point, if I understood right. Putting it another way, if you have a piece of gold worth $100,000, you need 10 to have $1 million, but you need 10,000 of those gold pieces to have $1 billion.
Sure! You just reminded me of this small* site which helps visualise it: Wealth, shown to scale
The difference between a million dollars and a billion dollars is about a billion dollars.
Well $3M sounds like a lot now, but I hope they index it, because the way inflation and money printing is going, that will be worth about $3.50 in a decade or two, so everyone will be caught by it.
Don’t buy into the fear-mongering being pushed.
For a comfortable retirement in 2026, the amount required is ~$800K (this is already on the high end).
Assuming a consistent worst-case inflation rate of 4% every year (double the RBA target), it would take 25 years to hit $2m - let alone the $3m+ in question here.
There is a very small, very wealthy cohort with $3m+ in superannuation savings - and you, statistically speaking, aren’t part of it.
Fuck ‘em - they need to be taxed more.
I get and support the gist of this.
In terms of dollar values, I worry about 2 things:
- the official CPI figures don’t track to the actual cost of living, eg mortgages aren’t included
- the issue of money/government debt is uncontrolled
Maybe if it was set as the equivalent of $3M in gold as at 12 March 2026 I’d be OK…
PS:800k might be the comfortable today, but there have been multiple times the share market etc has halved, or even lost 90% of it’s value. Unless you have 2x to 10x 800k, and have a living portion in liquid assets, you are not immune.
As an alternate POV, if somebody had $5M in super today, would we be OK with no extra tax if the markets crashed 50% and that meant their super was only worth $2.5M now? And the $3M fatcat who only held shares in his dodgy cousin’s company that tanked, some NFTs, and cryptocurrency was now worth $100k?
