Teal MP Joins Critics of Super Tax Plan, Warns It Will Hurt Gen Z’s Future

Liberal Senator Andrew Bragg has demanded clarity on exemptions, questioning why some MPs will be exempt.

Monique Ryan the Teals MP for the seat of Kooyong speaks during a community candidates' forum in Melbourne, Australia on April 24, 2025. Asanka Ratnayake/Getty Images

Independent Teal MP Dr. Monique Ryan has joined a growing chorus of critics urging the Albanese government to reconsider its plan to double the tax rate on superannuation (retirement) balances above $3 million.

She said the proposal could distort the retirement system, inflate housing prices, and unfairly impact younger Australians.

Ryan in an open statement said the government rammed the “poorly-considered plan” through Parliament and it risked undermining confidence in the super system, while forcing impending retirees to put their savings into the property market to avoid the tax.

The proposed changes—first unveiled two years ago—would raise the tax rate from 15 percent to 30 percent on earnings from super balances above $3 million, starting from July 2025.

Further they would not be indexed, meaning as the super funds grow due to inflation, more people will fall under the scheme, notably average families.

The government has drawn criticism for also considering taxing “unrealised capital gains” in super, which means authorities could tax the paper value of assets like shares or properties when they increase, even if they have not been sold.

This would make Australia the only developed country to tax unrealised capital gains this way, according to Jamie Green, executive chairman of PrimaryMarkets.

“[It will] force Australians to pay annual taxes on asset values regardless of whether they ever sell or profit,” Green told SMSF Advisor.

“Compounding the problem, if asset values fall, taxpayers will not receive cash refunds for previously paid taxes; instead, they would carry forward losses, which may or may not be useful in the future.”

Ryan Flags Impact on Gen Z

The Kooyong MP said the government should rethink its refusal to index the tax.

“While the government claims only 0.5 percent of taxpayers will be affected, the lack of indexation means it could impact all Gen Z Australians by the time they turn 60,” Ryan said in a statement.

“The government’s plan to increase tax on high balances shouldn’t include taxation of unrealised gains, and it must be indexed.”

Liberal Senator Takes Aim at Exemption for Some MPs

Liberal Senator Andrew Bragg also renewed criticism of the proposed changes, accusing Treasurer Jim Chalmers of shielding parliamentary pensions.

“This is a howling conflict of interest,” Bragg told Sky News. “The only way it can be resolved is to see the tax arrangements for the prime minister and other politicians put into the bill itself before the Senate.”

His comments followed revelations that some MPs and public servants on older pension schemes could be exempt due to constitutional limitations.

Bragg argued the legislation is incomplete without transparency on how defined benefit schemes will be treated, and called on the government to spell out how much tax MPs would pay under the new rules.

Greens Support the Tax, Push For Tougher Rules

The legislation—previously stalled in the Senate with crossbench opposition—is now expected to pass, with Labor holding a majority and the Greens voicing their support.

Both parties have the numbers to pass legislation through the upper house.

Meanwhile, the Liberal Party abstained from a recent crossbench motion in the lower house to index the super tax threshold, while largely avoiding the issue during the recent election campaign.

Greens Senator Larissa Waters reiterated her party’s support for the tax but called for the threshold to be lowered to $2 million, a move that would catch even more Australians.

This move has alarmed Ryan.

“This will take a massive bite out of the future super balances of young Australians,” she warned.

The new tax is projected to raise $2.3 billion in their first full year of implementation in 2027–28.

“Labor has already banked the billions from this new tax in the budget, but they need the Greens in the Senate to make this tax law—so what will Labor give the Greens in return for their votes?” Bragg said.

Chalmers Defends the Change as ‘Modest’

Treasurer Jim Chalmers has stood by the measure as the government tries to keep up with its array of spending commitments.

He described the latest move as necessary for supporting services like Medicare.

“It only affects half a percent of people with balances over $3 million,” Chalmers said. “It’s still concessional tax treatment, just a little bit less concessional.”

He said the changes would generate nearly $40 billion over the next decade.