The Australian government is facing accusations of introducing a new tax that could affect millions of Australians' retirement savings, despite previous assurances that superannuation would be exempt from recent capital gains tax reforms. The controversy centers on analysis by the Financial Services Council (FSC), which suggests that superannuation assets totaling $372 billion could be subject to an additional $55 million annually in taxes.
These potential additional costs, according to the FSC, could reduce investment returns for super fund members. The finding appears to contradict a Budget explainer issued by the Treasury in May, which stated that retirement savings, including self-managed super funds, would be protected from the government's capital gains tax adjustments.
Shadow treasurer Tim Wilson criticized the government, stating it had "laid yet another tax landmine" in the budget. He accused the Albanese government of targeting superannuation to fund its spending. The FSC, representing retail superannuation funds, indicated that the change could impact billions in assets held within superannuation structures.
Under current tax laws, super funds can utilize capital losses to preserve their capital gains tax discount, thereby minimizing tax liabilities and maximizing returns for members. While the proposed changes would maintain this treatment for assets held directly by a super fund, the FSC points to a difference when assets are held through managed investment trusts. In such cases, different loss-ordering rules would apply before gains are distributed to the fund, potentially diminishing the available tax discount and increasing the tax paid on members' retirement savings.