Superannuation savers are close to being slugged by the Albanese government’s planned tax on those with more than $3 million in their superannuation accounts. Be clear on this: the tax rate on earnings up to $3 million is 15% and with this tax change, any earnings over that will be taxed at 30%.

This is set to be Treasurer Jim Chalmers’ first step in his goal to (in his own words) preserve savings in “an equitable and sustainable way.”

Most Aussies don’t have $3 million in their super accounts, so this proposed change won’t be a vote-killer for the 2025 election, unless there are more tax changes that make it easy for Peter Dutton (or whoever replaces him) to call out Dr Jim as a threat to all our bottom lines.

A question some wealth builders must be asking is: “OK, it’s a super tax on the super wealthy but what if they go after people with more than one or two properties?”

The Treasurer says he’s introducing this extra tax on super to bankroll his “responsible budget” that gave “targeted cost of living relief.”

The AFR’s Hannah Wootton showed us that this tax change is both economic and political for Dr Chalmers, who bagged Mr Dutton for wanting to get rid of “bigger tax breaks for people who already have tens of millions of dollars in super”.

Well, referring to people with $10 million in super is relevant because these people will be hit, and most wouldn’t vote for Labor, but the tax will hit those with $3 million or more in super.

Let’s try to pull the politics out of this government grab for other people’s money and deal with the facts and implications of this taxing move. Here goes:

1. Only 0.5% of Aussies have $3 million or more in superannuation, which is about 79,000 super savers.
2. The $3 million cap won’t be indexed for inflation.
3. Over time, this super tax will affect more people, as their super balances grow.
4. The AFR says “…the 30 per cent tax rate could apply to 10 per cent of super savers within 30 years, without indexation.”
5. There were 135 people with super balances over $50 million.
6. Data from Treasury shows that 39% of superannuation tax concession benefits go to the top 10% of income earners. Around 6,000 Australians have more than $10 million in superannuation. 23,000 have between $5 million to $10 million, while 16,500 have $4 million to $5 million. 33,500have $3 million to $4 million.
7. The average super account balance is $170,000.

What will the effects be?

1. It will be great for financial advisers because wealthy people will more than likely need advice.
2. Money will be taken out of super for alternative investments.
3. Property and investment bonds will become more attractive.
4. People with balances in the $2 million region will progressively go over the $3 million cap. If you were 65 with the $1.9 million cap that now exists for pension accounts, you could be over $3 million by the time you’re 75.
5. Those with properties inside their super — small businesspeople, farmers and the like — will have to find extra money to pay the tax annually and might be forced to sell their properties.

Like all new taxes, it’s the thin end of the wedge and as time goes on, more and more people will feel the impact as the super tax drives more and more into a growing number of super savers.

And you can bet, given the size of the deficit after the pandemic, more taxes are likely to show up in the future.