Economics

Treasurer Jim Chalmers Scraps Superannuation Plan.

Treasurer Jim Chalmers’ proposed changes to Labor’s superannuation tax plan has drawn criticism and support alike from across the political spectrum.

Published

6 months ago

October 16, 2025

Dominic Wexler

Labor Treasurer Jim Chalmers (Source: Alex Ellinghausen/Sydney Morning Herald)

On Monday, Labor Treasurer Jim Chalmers announced major changes to the federal government’s superannuation tax proposal, going back on his 2023 budget.

Among the changes, the concessional tax rate on superannuation balances between $3m and $10m would be doubled. Balances over $3m would be taxed at 30%, and those over $10m would be taxed at 40%. The thresholds would also be indexed, tied indirectly to inflation and wage growth. This means that it will apply to fewer people and take in less money for the government. It is expected Chalmers’ amendments will leave about $15,000 more in superannuation for approximately 3 million Australian retirees.

Chalmers has been criticised for backing down on his 2023 proposal. The Greens, who currently comprise a consequential 10-person bloc in the Senate, have already come out against the plan, accusing this move of being a “capitulation to the wealthiest people in the country.” The Greens’ Treasury spokesman, Nick McKim, described the new model as “a green light to the richest 0.5% to keep hoarding investment properties.”

However, Chalmers has rejected these assessments, instead framing the changes as a product of dialogue and pragmatism “in order to get [the new scheme] through parliament.”

“These are sensible changes which take more than two years of feedback into account. We have worked through the issues and found another way to deliver on the same objective.” -Chalmers

When Chalmers made the original proposal, Shadow Treasurer Ted O’Brien decried it as “super big and super bad”, but the revision has brought reticent politicians, like Independent MP Allegra Spender, into the fold, with Chalmers’ amendments considered “a reasonable compromise.”

Chalmers’ announcement also drew favour from outside of federal parliament. Former Labor Prime Minister Paul Keating came out in support of the new superannuation tax plan, seeing it as a corrective for the “Howard/Costello rampage of 2007”.

“The government and Treasurer Chalmers have spent well over a year seeking to divine a method whereby [superannuation]… could, with all reasonableness, be brought under control by setting new permissible limits,” Keating said in a statement. “Importantly, these decisions solidify superannuation tax arrangements in a manner the community can now rely upon for the long-term security of their retirement savings and with it, their peace of mind.”

If the changes to superannuation are successfully passed through both houses of parliament, the legislation will take effect on July 1, 2027.

We at the Thought Digest Media Group are not experts on financial and economic law. No part of this article constitutes financial advice.

Sources: