The Superannuation Members Council (SMC) has called on the Albanese government to commit part of an almost-$10 billion superannuation tax windfall revealed in the 2025-26 Budget to raising the low-income superannuation tax offset (LISTO), which has been unchanged for more than 13 years, to ensure more Australians do not pay a higher rate of tax on their super than they pay on their income.
The Budget papers show that tax paid by super funds is expected to reach $25.6 billion in 2025-26. Superannuation tax receipts have been revised up by $2.4 billion in 2025-26, and by just under $10 billion over the five years from 2024-25 to 2028-29, due mainly to higher-than-expected tax on investment earnings, and on contributions due to strong employment.
Mirroring its pre-Budget submission, SMC highlighted the fact that almost two out of every three LISTO recipients are women, and raising the offset would be a step towards closing the superannuation gender gap.
However, the Government warned that superannuation fund taxes are “highly volatile from one year to the next, primarily due to year-to-year changes in tax from earnings on investments and the consequential impact on the timing of tax payments”.
The government has left the superannuation sector largely untouched in this Budget, in-line with general industry expectations and as something of a relief to a sector that has faced a seemingly endless barrage of regulatory and legislative change, mostly aimed at sharpening the quality of retirement income offerings and delivering more advice to members.
Treasurer Jim Chalmers’ fourth Budget, and the last before an election expected to be called within days, predictably focused on delivering cost-of-living relief to stretched Australian households, including tax cuts for low-income earners, and on positioning the Albanese Government to take on the Peter Dutton-led Coalition at the polls.
Key industry associations including SMC, the Association of Superannuation funds of Australia (ASFA) and the Financial Services Council (FSC), foreshadowed a quiet Budget night on the superannuation front, and they were proved right.
SMC also welcomed confirmation that payday super reforms remain on-track to commence on 1 July 2026. The Budget papers confirmed an investment of $404.1 million over four years to support its implementation.
The FSC highlighted a $50 million allocation over three years to extending the Tax Integrity Program, to enable the Australian taxation Office to make super Australian businesses pay their superannuation liabilities on time, which is expected to result in an additional $31 million being paid to employees.
FSC’s Federal Election Policy Priorities document, issued in January, called on the government to rule out changes to superannuation tax, and the Budget contained no additional super tax measures.
ASFA pointed to additional support for the ATO to target tax avoidance and to support the introduction of the payday super regime. The Budget papers show that in 2023-24 more than $930 million of unpaid super was paid to 797,000 employees.
Just less than $7 million will be allocated to the National Anti-Scam Centre – a division of the Australian Competition and Consumer Commission to protect consumers from scams, in which superannuation funds figure prominently.
The Budget papers revealed a $27.6 billion deficit for 2025-26, after two years of surpluses.
“Inflation is down, unemployment is low, wages are up, interest rates have started to come down, growth has rebounded solidly,” Chalmers said.
“At the same time, the Government has delivered the biggest Budget turnaround in a Parliamentary term – improving the Budget by $207 billion – while delivering responsible cost of living relief to millions of Australians to ease pressures on households.
“We’ve turned two big Liberal deficits into two Labor surpluses and the deficit in our third year, of $27.6 billion, is almost half of what we inherited from the Coalition.”
Shadow Treasurer Angus Taylor said this was a Budget “for the next five weeks, not the next five years”.
“This is a Budget for an election, not one for our country’s future prosperity,” Taylor said.
“At a time when living standards have suffered the biggest collapse on record and when the security environment is the most dangerous since the Second World War, Labor’s Budget has failed to deal with the economic and national security challenges our country faces.”
