The big change to superannuation 'all young Aussies' should fear
Millionaire and entrepreneur Mark Bouris has warned young Australians will be the hardest hit by Labor's proposed tax hike on superannuation.
The Albanese government plans to double the tax on superannuation balances above $3million from 15 to 30 per cent from July 1.
Labor expects the hike, which will also apply to unrealised gains, to only affect an estimated 80,000 people or 0.5 per cent of the population.
Mr Bouris said young Australians should be wary of the proposal given they stand to be denied the same tax conditions that benefited older generations.
'Every young person in the country should be worried about this, and I'll tell you why,' he said on his Mentored Plus podcast.
'Because every old person in the country has experienced building their superannuation up with only 15 per cent tax rate from day one, for the last 30, 40 years.
'We've had this, all of us had this fantastic low-tax situation with the money we earn in our super fund,' he said, adding young people 'will not have the same benefits'.
Bouris dismissed the idea that young people stand to gain as older Aussies look to withdraw and gift their savings to avoid paying the higher tax.
'If you're a young person now and you're saying: "Oh this is great, because the rich people are going to transfer the wealth across to the younger people", you will be transferring it to your kids and it's going to keep going like that forever.'
Mr Bouris said former Prime Minister Paul Keating, who oversaw the introduction of compulsory superannuation in Australia, must feel 'completely demoralised'.
'All this is going to do is put more strain on the government because people are not going to retire with enough money because they're paying too much tax,' he said.
The Greens want the threshold to be lowered to $2million and indexed to inflation while deputy Liberal leader Ted O'Brien has ruled out any compromise.
O'Brien suggested the Coalition would be open to a deal on the tax hike if Labor agreed not to tax unrealised gains - but has since taken a harder approach.
'Labor's super tax - it's super big, it's super bad. It flies in the face of what we believe as a Coalition,' O'Brien told Sky News last week.
'We will definitely, as a Coalition, oppose this unfair super tax of Labor's every step of way. Every step of the way.'
The 30 per cent tax rate would only apply to the value of a super account over a $3million threshold, while the 15 per cent rate would continue below that amount.
Industry groups have warned the threshold, which will not be indexed to inflation, will capture an increasing number of Aussies in line with rising costs and wages.
Modelling from Treasury and the Grattan Institute estimated one in ten Australians will have super balances over $3million by the 2050s.
Treasurer Jim Chalmers last week said the proposal had undergone multiple rounds of consultation and would not undermine superannuation tax concessions.
'We provided years of opportunities for people to suggest different ways to calculate that liability and nobody has been able to come up with one,' he said.
Labor, which does not have a majority in the Senate, will need to work with the Greens or the Coalition to get the proposal over the line.
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