Retirement
Call for indexation on super tax cap as $3m threshold draws criticism
Retirement
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly impact younger Australians over time.
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly impact younger Australians over time.
Ben Styles, co-founder and chief commercial officer at SuperAPI, said the absence of indexation in the policy—set to apply a 30 per cent tax rate on earnings from balances above $3 million from 1 July—would create long-term inequities across generations.
“It’s disappointing to see this year’s Federal Budget provides no response to the call for indexation on the proposed 30% tax rate on superannuation balances over AU$3 million, nor how it’ll affect Aussie taxpayers’ future retirement once it comes into effect from July 1 this year,” Mr Styles said.
“The AU$3 million cap, unindexed, is a sneaky ‘tax on young people, tomorrow’ that is dressed up as a ‘tax on rich people, today’.”
He said the measure would penalise future workers, pointing to the impact of inflation and rising living costs on what will be considered a high superannuation balance decades from now.
“In 40 years when today’s 25-year-olds are retiring, AU$3m will not be considered a very high balance,” he said.
“Every young person today will now face the prospect of being penalised for working hard and achieving. This is un-Australian and disincentivises ambition and financial responsibility.”
Mr Styles said the policy failed to provide targeted support for low-income earners and risked undermining incentives to save.
“Instead of punishing people for being successful, the government should be focusing on lifting those at the lower end, creating incentives for young and low-income workers to save and invest in their future and removing penalties,” he said.
He urged the government to prioritise mobility and long-term savings reforms over what he described as divisive tax measures.
“The government's focus should be on enabling upward mobility, not on policies that stifle growth and divide generations further.”
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