Treasurer Introduces Reworked Superannuation Tax Bill to Australian Parliament

New Superannuation Tax Bill Introduced

Australian Treasurer Jim Chalmers introduced the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 to the House of Representatives on Wednesday morning, February 11, 2026. The legislation represents a reworked approach to taxing high-balance superannuation accounts, aiming to create a more sustainable and equitable system for all Australians.

The Treasurer stated that the bill is 'all about making Australia's super system stronger and more sustainable' and 'making superannuation fairer from top to bottom'.

Key Reforms and Thresholds

The core of the bill focuses on adjusting tax concessions for individuals with substantial superannuation balances. Under the proposed changes, individuals with a total superannuation balance (TSB) exceeding $3 million will face altered tax rates on future earnings. Specifically:

• Earnings on balances between $3 million and $10 million will be subject to a combined headline tax rate of 30 per cent.
• Earnings on balances above $10 million will incur a concessional tax rate of 40 per cent.
• Balances below $3 million will continue to be taxed at 15 per cent in the accumulation phase, with earnings remaining tax-free in the retirement phase.

Both the $3 million and $10 million thresholds will be indexed in line with the Transfer Balance Cap to maintain their relativity over time.

Changes from Previous Proposals and Impact

A significant revision in this reworked bill is the removal of the contentious proposal to tax unrealised capital gains. This aspect had drawn considerable criticism in earlier discussions. The new measures are projected to take effect from July 1, 2026.

The government estimates that these changes will impact less than 0.5 per cent of all Australians, specifically targeting approximately 90,000 individuals with super balances over $3 million and around 8,000 with balances exceeding $10 million. The revised tax is expected to generate approximately $2 billion over the forward estimates.

Boost for Low-Income Earners

In conjunction with the changes for high-balance accounts, the bill also includes significant enhancements to the Low Income Superannuation Tax Offset (LISTO). The maximum LISTO payment will increase from $500 to $810, and the eligibility threshold will be raised from $37,000 to $45,000. These improvements are slated to commence from July 1, 2027, and are designed to provide a fairer tax concession on super contributions for over a million low-income workers, with a particular benefit for women.