A three-year political fight has ended with a package now set to become law after the Greens agreed to allow Labor’s superannuation changes to pass. The Labor Greens Super Tax Deal doubles the concessional earnings tax to 30% for balances between $3 million and $10 million and imposes a new 40% rate on balances above $10 million, while also increasing the low‑income superannuation tax offset and indexing thresholds.
Labor Greens Super Tax Deal: What changed and who will pay?
Verified facts:
- The plan to change superannuation tax rates was first announced by Prime Minister Anthony Albanese and Treasurer Jim Chalmers.
- Under the changes, the concessional tax rate on earnings for balances between $3 million and $10 million will double from 15% to 30%, and balances above $10 million will be subject to a new 40% rate.
- The government removed the earlier, contentious proposal to tax unrealised capital gains and agreed to index the $3 million and $10 million thresholds to inflation.
- The government also increased the low‑income superannuation tax offset from $310 to $810 and raised the eligibility threshold from $37, 000 to $45, 000, effective from 1 July 2027.
- The Greens’ treasury spokesperson, Nick McKim, described the party’s support as a “down payment” on further reform to be pursued in the 12 May federal budget.
- The Coalition opposed the package, leaving the Greens as the decisive vote in the Senate; the Greens agreed to support the revised package without demanding additional concessions.
Verified analysis: These measures concentrate higher tax rates on the very largest superannuation balances while providing an increased offset for low‑income savers and indexing protections for the designated thresholds. The removal of the unrealised capital gains element narrows the scope of the change from earlier proposals announced by the government.
What is not being told?
The central question is what comes next. Nick McKim framed the Greens’ vote as a signal for the government to pursue “genuine, progressive” tax reform in the upcoming budget, explicitly naming potential moves such as scaling back the 50% capital gains tax discount and capping the number of properties eligible for negative gearing. The public has been given the broad outline of the superannuation rates and the offset changes, but there remains a lack of specific commitments in the package on the sequencing, scale, and legislative detail of any follow‑on reforms that McKim and the Greens are seeking.
Verified caveat: The government previously failed to pass the legislation in its first term and later removed the unrealised capital gains proposal after criticism. That legislative history is part of why the Greens’ conditional framing matters: the party positions the current agreement as preliminary, not final.
Who benefits, who must answer, and what should be demanded now?
Analysis: The package shifts tax burdens toward the largest super balances while modestly improving treatment for lower‑income super recipients. Politically, the Greens gained leverage by securing a commitment framed as a “down payment” on deeper reforms, while Labor secured the votes needed to pass changes it first proposed years earlier. The Coalition’s opposition made the Greens the pivotal actor in the Senate; the Greens chose not to extract further concessions before voting to pass the revised bill.
Accountability demands: Treasurer Jim Chalmers and Prime Minister Anthony Albanese should publish clear, measurable targets for revenue, distributional impact, and the intended timeline for any additional changes foreshadowed for the 12 May budget. Nick McKim and the Greens should set out the benchmarks that will turn a “down payment” into concrete policy outcomes, including what would constitute sufficient ambition on capital gains tax and negative gearing.
Verified conclusion: The public now faces a package that raises taxes on the richest superannuation balances while improving low‑income offsets, and it has been told this is only the start. That public accounting and clarity about next steps are precisely what the Labor Greens Super Tax Deal must deliver.
