The Australian Government’s plans to increase the taxation rate on superannuation accounts with high balances will become law after the Australian Greens agreed to support it in the Senate.
The minority party said it would back the ruling Australian Labor Party’s Superannuation (Building a Stronger and Fairer Super System) Bill 2026 in the upper house, allowing the legislation to pass.
“We are going to support the bill as a down payment on genuine, progressive tax reform in this budget. This budget is a once‑in‑a‑generation opportunity for ambitious tax reform, and we’re opening the door for Labor to walk through,” Greens economic justice spokesperson Nick McKim said in a statement:
The approved change lifts the tax rate on earnings on super account balances above $3 million (US$2.1 million) from 15% to 30% and on balances over $10 million to 40%, but applies only to realised earnings, and the thresholds will be indexed to inflation.
But it maintains the concessional treatment of super, which is taxed at 15% during the accumulation phase rather than higher marginal rates for most Australians.
Labor backed down from applying the change to unrealised gains after strong opposition and added the higher balance change.
“While we are disappointed that parts of Labor’s original proposal have been watered down, we strongly support measures that deliver fairness for workers and retirees,” McKim said.
The Greens urged the Government to use the May budget to consider bold reforms, including scaling back the capital gains tax discount, reforming negative gearing concessions and ensuring the tax system supports intergenerational fairness.
Although Labor has control of the House of Representatives, the Greens hold the balance of power in the Senate with 10 of the 76 seats, which means with their support Labor can pass legislation, as it already has 29 seats.
The Government also agreed to increase the low-income superannuation tax offset by $310 to $810 and raise the eligibility threshold from $37,000 to $45,000 from 1 July 2027.
