Prime Minister Albanese stated that from 2025-26 onwards, the tax rate applied to future earnings for balances above $3 million will be 30 per cent.

Currently, earnings from superannuation in the accumulation phase are taxed at a concessional rate of up to 15 per cent.

The measure is expected to impact around 80,000 people. Individuals with balances above $3 million will still be able to benefit from the more generous tax breaks on earnings from the $3 million they have below the threshold.

Treasurer Jim Chalmers stressed the proposed measure does not impose a limit on the size of superannuation account balances in the accumulation phase and that it applies to future earnings.

Mr Chalmers said the government will introduce enabling legislation to implement the measure “as soon as practicable”.

“Further consultation will be undertaken with the superannuation industry and other relevant stakeholders to settle the implementation of the measure,” he stated.

Commenting on the announcement, Chartered Accountants ANZ Superannuation and Financial Services Leader Tony Negline noted that this latest announcement comes only one week after the government released its consultation on the objective for super.

Mr Neglige said while CA ANZ does not dispute the objective of bringing more equity to the superannuation system, “the fairness of a large attack on a relatively small number of people who followed the rules is”.

“The target of these changes is a relatively small number of people who played by the rules which the government at the time set and kept for about 20 years between the late 1980s and 2006 against the advice of the industry,” said Mr Negline.

Mr Neglige said constant changes to the rules every few years such as this made it difficult for Australians to have the confidence to invest in their super.

“Investing in superannuation in this country is like trying to shoot a moving target flying in circles over shifting goal posts,” he stated.

The proposed measure, he said, also raises significant questions about potential unintended consequences which could flow from the decision.

“For example, what do we do about people with multiple accounts? if I have one million in five accounts, can I choose? Does it apply to unfunded superannuation and if not, why not?” he questioned.

Mr Negline noted that it’s also unclear what distortions the proposal could cause over the next three years.

“[Will members] move money to safer accounts?” he said.

“What impact will it have on divorce settlements for example?”

It’s also uncertain how capital gains in super will be taxed under the new policy, he added.

SMSF Alliance principal David Busoli said the Coalition will need to be careful in how it approaches the proposed measure.

“The Coalition could find itself on the back foot by completing rejecting any change. The point that Labor will push is that this affects only 0.5 per cent of the population and, by rejecting it, the Coalition are siding with the 17 people with over $100m (one with $400m) in super,” said Mr Busoli.

“I doubt if this measure will lose Labor any votes whilst the Coalition may lose some by rejecting the measure outright.”

Mr Busoli noted it was the Coalition’s Malcolm Turnbull who started reeling back some of the very generous super tax concessions by introducing pension and contribution caps.

"There was no doubt that more changes have always been coming and, by accepting that, we can better influence the outcome,” he said,

“Is $3 million the right number? I think that $5 million would receive negligible negativity and there is time to work on that. Whatever the number, it must be indexed.”

The Treasurer has indicated at this stage there is no intention to apply indexation to the $3 million cap.