A new poll has shown that the Labor government’s plan to lift the superannuation tax for high-income earners was well received by most Australian voters.
According to the latest Newspoll conducted by The Australian, which surveyed 1,530 voters between March 1 and March 4, over six in ten (64 percent) respondents supported the government’s plan to raise the concessional tax rate for super balances over $3 million (US$2.03 million) to 30 percent in 2025.
Around 29 percent of the voters disapproved of the changes, while the remaining seven percent were unsure.
Among Labor voters, 80 percent approved of the plan, whereas 54 percent of Coalition voters had similar thinking.
Voters in the 35-49 age group had the highest rate of approval at 70 percent, followed by those in the 18-34 age group at 66 percent, and the 65+ at 61 percent.
In addition, survey respondents with higher education levels tended to favour the government’s new policy, with 72 percent of university degree holders supporting the changes compared to 62 percent without tertiary education.
There was not much difference between the genders, with 66 percent of male voters approving the plan compared to 63 percent of female voters.
All of the voters were asked whether they would approve of the new concessional tax rate, given that the government said only 80,000 people would be affected and the federal budget would improve by $2 billion each year.
Labor’s Plan Could Potentially Impact Half a Million Australians
While the government only mentioned that 80,000 Australians would see their super tax rate double by 2025, financial experts painted a very different picture for future generations when taking into account inflation.
According to recent modelling released by the Financial Services Council, an unindexed $3 million cap at maturation would affect the super savings of 204,000 Australians under the age of 30 and 322,071 people aged over 30 by the time they reach retirement age assuming 2.5 percent inflation per year.
Diners sit outside a cafe at Circular Quay in Sydney, Australia, on Feb. 25, 2022. (Lisa Maree Williams/Getty Images)
For example, a 25-year-old IT professional earning $100,000 each year with a current super balance of $35,000 will surpass the $3 million cap by the time they retire at age 65 if they only contribute the minimum amount to their super accounts.
In addition, the amount of contribution needed to exceed the cap may be lower than what many Australians think.
The modelling showed that for a 25-year-old to hit the $3 million cap when they retire at 65, he or she will need to contribute around $624,867 if inflation stays at four percent on average and the investment return on superannuation balance is at 7.5 percent annually.
However, the amount will jump to $919,671 if the average annual inflation rate drops to three percent.
Financial Services Council CEO Blake Briggs questioned the fairness of the super cap if it remained unindexed.
“Caps in the superannuation system are indexed to ensure generational fairness so that each generation gets the same outcomes and benefits from the superannuation system,” he said in a statement.
“500,000 impacted Australians is over six times the current government estimates, which only takes into account balances that are currently over $3 million.”
Leader of the House Says Poll Results Should Not Be Overread
Despite the latest Newspoll’s results, the Leader of the House and Minister for Workplace Relations Tony Burke said the support was for the new super concessional tax only and did not indicate Australians’ approval for further changes to the super system.
“You’ve got to be careful of overriding what’s there at the moment. I think the fact that this has been a modest, calm, balanced change is part of the support that’s receiving,” he told ABC Radio.
“When you’re getting a good response about a particular proposal, then the response is about that proposal that’s in front of people. I just don’t think you can draw too much further than that.”
The minister noted that the support from the community was due to the changes being “small.”
Leader of the House Tony Burke reacts during question time at Parliament House in Canberra, Australia, on July 28, 2022. (Martin Ollman/Getty Images)
He also said that the Australian people understood that raising the super concession tax was a proper solution to the huge public debt compared to the spending cut measures implemented by the former Coalition government.
“People understand that the $1 trillion of Liberal debt doesn’t look after itself, and there are different ways you can go to try and deal with the debt that you face,” Burke said.
“When people look at the different options, I think people can say this is a pretty sensible, calm response to it.”
Meanwhile, Opposition immigration spokesman Dan Tehan said the Labor government still broke its election promise, despite the new poll showing people’s support for the new super tax policy.
“What the government is doing is true to form for a Labor government, they’re raising taxes, and they’re breaking election promises,” he told Sky News.
“What you’ve got to think about (is) all those people after the last election who had heard from Anthony Albanese that they weren’t going to make changes with super, and they made investments based on those commitments.
“What they’re facing now is the fact that those commitments and those investment decisions that they made were based on a false promise.”
Nina Nguyen contributed to this article.