Murray Watt confirms super tax carve outs, defends policy

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Murray Watt confirms super tax carve outs, defends policy

A “small group” of former officials will be exempt from Labor’s proposal to roll back concessions on ultra-high super balances, a senior minister has confirmed.

Some half a per cent of Australians have super balances north of $3m.

But critics have warned the proposal could end up affecting more people than first thought because it would not be indexed, meaning it would not rise with inflation and eventually more balances would be captured.

The exemptions would be restricted to “those earnings in superannuation funds that the constitution prevents being taxed by the government will be excluded”, according to a government summary document, first reported by Sky News.

Camera IconThe Albanese government has proposed rolling back concessions for super balances over $3m. Jason Edwards / NewsWire Credit: News Corp Australia

Acknowledging “it was a hotly contested issue” during the federal election campaign, Murray Watt on Sunday confirmed former state premiers, MPs, governors and judges would be exempt.

Justices of the High Court would also be ineligible.

The cabinet minister said Labor had “received an endorsement from the *********** people to legislate in the manner that we put forward”.

“We need to remember that this affects a very small number of people,” Senator Watt told Sky News.

“That’s a very small part of the community, and the reality is, we will be relying on that taxation revenue to help meet some of our other priorities, like lifting bulk-billing rates in GP clinics and supporting people with cost of living.

“That money has to come from somewhere, and we think this is a fair way to do that in terms of who will be covered.”

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He stressed it was not a matter of deliberately excluding former officials, but that they “cannot be taxed on their superannuation under the Constitution”.

“We’re of course not going to be introducing laws that are in breach of the Constitution and will be struck down,” Senator Watt said.

“But what we are planning to do, as I say, is to reduce the tax concession available for a very small number of people with extremely high superannuation balances.

“People will still get a concession on their superannuation. It just won’t be quite as generous as it is at the moment.”

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