Anthony Albanese, Jim Chalmers announce tax changes to superannuation accounts with over $3m

After days of teasing out a debate on superannuation, Prime Minister Anthony Albanese announced Labor will take to the next election a proposal to raise, from 2025-26, the concessional tax rate to 30 per cent on future earnings for super balances above $3 million.

"You will have noticed that's beyond this term. It's after the next election. It's also not retrospective. It applies to future earnings," he told reporters in Canberra.

Prior to the last election, Labor ruled out super changes if it won government, with then shadow treasurer Jim Chalmers telling the ABC in March that "Australians shouldn't expect major changes to superannuation if the government changes hands".

It comes as the Dr Chalmers released Treasury analysis showing that high-income earners are the biggest beneficiaries of tax breaks worth more than $100 billion a year.

"The purpose of raising this money from superannuation tax concessions is to improve the structural position of the budget," the Treasurer told reporters.

"We see this as an important investment in responsible economic management. This is a common sense change that will improve the budget over time."

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The Labor government has been accused by the opposition of breaking a key election promise over superannuation, and the Coalition has already taken a position to fight changes to superannuation tax breaks "tooth and nail".

Opposition treasury spokesman Angus Taylor vowed the Coalition "simply won't work with Labor to break their election promises".

Mr Taylor said the change in super tax concessions showed that the government was keen to raise taxes.

'When the Labor Party runs out of money if comes after yours. We're going to see a lot more of this," Mr Taylor said, warning that the government has refused to rule out changes to capital gains tax, negative gearing and franking credit arrangements.

"This is a Labor Party that wants to spend your money and it's going to have to tax all Australians in order to be able to do that," he said.

But there are some on the opposition backbench who urge consideration should be given to supporting super tax changes if they would help with budget repair.

Monash MP Russell Broadbent told the ABC earlier this week that if the proposed changes were "fair, equitable and just - and I will repeat that, fair, equitable and just - I think we should take on board what the government is offering on our behalf".

Key crossbencher David Pocock tweeted that starting to wind back tax concessions for people with millions of dollars in superannuation will allow the budget to "work harder" for people most in need.

Mr Albanese said the changes would not "change the fundamentals" of Australia's superannuation system.

"Labor built the superannuation system and we have fought to keep it strong. But Australians who are having to make tough decisions around the kitchen table expect their government to be prepared to make tough decisions around the cabinet table," he said.

The change is expected to apply to 0.5 per cent of those with superannuation, which is less than 80,000 people.

"It will be irresponsible to not take any action whatsoever. That's why we've made this decision today," the Prime Minister said.

"This reform will strengthen the system by making it more sustainable. The savings that are made from the reduction in these tax breaks will contribute $900 million to the bottom line over the forward estimates. And some $2 billion when it is operating on a full-year period. This is an important reform."

The 15 per cent rate continues for balances under $3 million, and Dr Chalmers admitted that some people with bigger super balances might seek to withdraw some of their funds before the changes come into effect.

"But more likely, people compare the 30 per cent headline rate with their marginal tax rate, and decide to leave it where it is. People will make their own decisions," he said.

There have been calls for the $3 million threshold to be indexed to account for increases in incomes and super balances over time.

But the treasurer said he did not want to do that given the size of the budget repair task facing the government.

"Our job ... is to try to put the Budget on more sustainable footing and non-indexing the threshold is part of that effort."