iscoverThe government’s surprise amendments to the proposed super tax have been welcomed with open arms by the accounting and superannuation industry.
Altered super tax proposal brings ‘waves of relief’ for professionals
15 October 2025
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10 minute read
As word has continued to spread about the government’s decision to make changes to the controversial superannuation reforms, professional bodies are voicing their support for the abrupt decision to change course.
On Monday (13 October), Treasurer Jim Chalmers unveiled changes to the trajectory of the superannuation system, specifically making changes to the contentious Div 296 tax proposal.
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The most notable changes made included the scrapping of the tax on unrealised capital gains and indexation of the $3 million threshold, as well as an increase to the low-income superannuation tax offset (LISTO).
As previously reported by Accountants Daily, multiple professional bodies and superannuation advocates were supportive of the change, highlighting that it was something that had long been advocated for.
CA ANZ weighed in on the wave of support and said it had been part of the masses who had advocated for the changes to be made, as the original policy setting was unfair and would have been complex to administer.
Ainslie van Onselen, chief executive of CA ANZ, said CA ANZ thanked the government for listening to the concerns of the accounting profession.
“By taking on feedback from a range of experts and stakeholders, the government will now avoid the unfairness and implementation costs of taxing unrealised capital gains in superannuation given the wide fluctuations in the market value of assets that often occur,” she said.
“We also welcome the government’s decision to index the $3 million threshold, as this ensures the policy will not automatically impact younger Australians over time. Indexation will reduce the potential for bracket creep that was a feature of the government’s original policy settings for this tax.”
Also from the professional accounting bodies, the Institute of Public Accountants (IPA) rallied support behind changes to Div 296 tax and the boost to LISTO, as they were key concerns raised by the profession.
Tony Greco, IPA senior tax advisor, said one of the most important aspects of the announcements was the confirmation that the government would only focus the super tax on realised earnings, thresholds would be indexed, and implementation was to be delayed by one year, which would allow for further consultation and legislative refinement.
Greco also noted that the decision to listen to industry feedback and adopt a more equitable and sustainable approach was a commendable move.
“This is a positive step forward. The decision to remove unrealised gains from the calculation of taxable earnings addresses one of the most contentious aspects in the original proposal,” he said.
“Taxing unrealised gains was fundamentally inconsistent with long-standing tax principles and created significant cashflow and compliance risks for taxpayers – particularly small business owners and self-managed superannuation funds.”
Katie Timms, RSM Australia superannuation and SMSF leader, noted the announcement was “incredibly positive” and echoed a similar sentiment that it demonstrated the government had listened to the serious and real-life impacts the original draft legislation would result in.
Timms said this announcement felt like a breakthrough for industry and would hopefully result in a tax that was sustainable and fair, yet still had questions she wanted answered for the industry.
“The fact sheet has provided some detail on what Treasury is considering in terms of calculation methods – some of which do still raise some questions.”
“Will there be relief on any capital gains tax (unrealised gains) that have accrued to the commencement date? Is the capital gains tax discount going to be allowed to reduce ‘earnings’, given the fact sheet states it will be aligned to taxable income? The sooner we can get this clarity, the easier it will be for trustees to move forward.”
Also impressed with the government’s change in direction on the super tax was the SMSF Association, whose CEO, Peter Burgess, had been increasingly against the original Div 296 proposal.
Burgess said this change would send “waves of relief” through the SMSF community, especially as the proposal to tax unrealised capital gains and not index the $3 million threshold were two of the most contentious issues within the legislation.
“From the outset, the Association has worked tirelessly to highlight the expansive and damaging consequences of taxing paper profits,” he said.
“Working in partnership with other organisations, we have clearly demonstrated the deleterious effect this would have on a diverse range of industries such as farming and small business and investment activities such as venture capital, so it’s extremely pleasing that the Government has listened to these concerns.”
“In these circumstances, the only solution was to scrap the original design and start again and we are genuinely thankful that the Government has now decided to do this. We now look forward to working with Treasury and the superannuation industry on alternatives that accomplish an equitable outcome for all super fund members.”
The Tax Institute also shared praise for the announcement, again impressed that the government had taken on feedback from the relevant professional industries.
Julie Abdalla, head of tax and legal at The Tax Institute, said the shift from taxing unrealised gains to a realised earnings approach was a significant policy improvement and addressed what the institute identified as the primary concern with the original proposal.
“The proposal to tax unrealised gains was inconsistent with well-established principles of Australia's tax system and would have had extremely unfair implications for affected individuals," Abdalla said.
"Moving to a realised earnings approach better aligns Division 296 with Australia’s existing capital gains taxation regime and will provide greater certainty for superannuants and their advisers,” she said.
“After a long advocacy journey to get to this point, we welcome these changes and look forward to consulting further on the design and implementation details. Good tax policy is built through consultation, and we are encouraged that the government has demonstrated a willingness to listen and refine its approach.”
“The political will the Treasurer has demonstrated through this announcement is crucial to ensuring our tax system is robust and operates fairly, now and in the future.”
“These revisions show that when government, industry bodies, and stakeholders work together constructively, we can achieve policy outcomes that are fair for all Australians and sustainable for future generations.”
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