Federal Government’s Double Tax Rate Receives Support From Many of Australia’s Largest Superannuation Account Holders

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The government’s controversial plan to make Australia’s largest superannuation account holders pay more tax is receiving backhanded support from some of the country’s most prominent investors. 

The federal government has announced that they will be doubling the tax rate on superannuation accounts with balances over $3 million from 15 per cent to 30 per cent, which will take effect in July 2025.

This change is estimated to affect approximately 80,000 Australians, representing 0.5 per cent of the population.

Gary Belgre, an Australian super account holder, believes that having more than $3 million in superannuation makes him one of the lucky few Australians.

The 66-year-old claims that earnings from his super have enabled him to live a “very comfortable” retirement life in North Sydney.

“The fact of the matter is if you’ve got more than $3 million … that’s not just for a comfortable retirement — which is what superannuation was intended for — that is wealth creation going forward,” Mr Belgre said.

The Association of Independent Retirees proposed capping super holdings at $5 million last year, with a 30% tax rate applied to any excess amounts.

The reduced $3 million criterion, according to association president Wayne Strandquist, was still realistic even if it would be “somewhat more challenging” to have a decent retirement income.

“Therefore effectively, rather than having only 80,000 affected, there would be potential twice that number,” Mr Strandquist said.

He was concerned about how it would affect couples who shared a single self-managed fund and was astonished that there would be no indexation, implying that the number of people affected would increase. The real value of the returns would decline as inflation increased.

It remains to be seen how successful this policy shift will be, but its aims to improve fairness and security for all Australians are noble. 

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