09/09/2025
The Albanese Government has been forced into retreat on its controversial superannuation tax plan, after mounting backlash from the Coalition, industry leaders, and everyday Australians outraged by the proposed tax on unrealised gains.
Shadow Minister for Financial Services Pat Conaghan, said Labor’s flip-flop was proof the policy was deeply flawed from the start.
“From day one, we said this tax was unfair, unworkable, and completely out of touch,” Mr Conaghan said.
“Our income tax system has never taxed Australians on intangible gains. This would be an Australian first, and not one to be proud of.”
Labor’s plan would hit super balances over $3 million with a higher tax rate – not just on real income, but also on unrealised capital gains: value increases that exist only on paper and may never be realised.
Mr Conaghan said this design would create real hardship for ordinary Australians that have their small business or their farm in their self-managed super fund.
“Take a farmer who holds land in a self-managed super fund,” he said.
“If the land’s value rises on paper, they could be hit with a tax bill – even during a drought or a loss-making year where they have no real profits. That could mean they have to sell part of the family farm just to pay the tax.How is that fair?”
The Coalition has long warned that taxing unrealised gains would shatter trust in super, which they say is built on long-term savings, clear rules, and certainty.
“Labor’s retreat shows they’re feeling the heat – but this isn’t a policy that just needs some cosmetic fixes. Taxing unrealised gains is fundamentally wrong, and it should be ruled out entirely,” Mr Conaghan said.
He also condemned Labor’s refusal to index the threshold, calling it a “slow-motion tax trap” for younger Australians.
“As wages and inflation rise, more and more ordinary workers will be dragged into Labor’s tax net. The people that will be hit hardest are the youngest Australians that are just starting to save for their retirement today. This is tax by stealth on the next generation.”
Mr Conaghan also criticised the tax as sending a message that the rules can change at any time, even when you’ve played by the rules for decades.
“You can’t build confidence in retirement by shifting the goalposts every few years,” Mr Conaghan said.
“People planned their futures under the rules of the day. Tearing up that deal to plug Chalmers’ budget hole is a betrayal of trust.”
The Coalition will continue to fight for a super system that rewards saving, respects long-term planning, and protects the trust Australians place in their retirement – not one that penalises aspiration or plays politics with people’s futures.
