The government may have stepped back from its planned super tax on balances above $3 million — but it’s not an end to “cash grabs further down the track”, according to former Australian Prime Minister Tony Abbott.
Speaking about Labor’s changes during an interview with the Institute of Public Affairs, Abbott made two critical points:
- The government still views super as a piggy bank it can raid when needed
- The push for taxing unrealised capital gains hasn’t disappeared — it has only been temporarily blocked.
And he didn’t stop there: “I think it is inevitable… there will be some kind of wealth taxes. The Greens want it. Jim Chalmers obviously wants it…” said Abbott.
In other words: this is not a retreat. It’s a warning.
Why this matters to you — even without $3 million in super
Division 296 was never about just “the rich”. It was a test case to see how far government could push. Once a tax idea is on the table — even if paused — it can come back:
at a lower balance level (eg $1–2 million)
with less notice
impacting far more Australians
And remember — the original design included a tax on unrealised gains. Meaning your super asset goes up in value on paper → you get no cash → you still pay tax. If they were willing to try that once… they can try again.
The truth behind the “30% and 40% tax”
Super already pays 15% tax on earnings. Division 296 simply adds:
+15% → 30%
+25% → 40%
This isn’t a “new tax rate”. It’s a tax on top of a tax — dressed up as fairness. And once the public accepts that concept inside super, it becomes very easy to…
Expand to wealth, death and gift taxes
This looks like step one in a longer journey:
Normalise 30–40% tax rates on “big” balances
Then apply those same rates to property, business assets, inheritance and family gifts
Make changes effective immediately so restructures can’t happen in time
What starts in super doesn’t stay in super. This could land next in your estate plan, your family asset transfers, and your wealth protections.
So what can you do? Not panic. Get educated and prepare.
On 22 Oct, Cass Smith stepped through this background and advanced asset protection strategies that work. Watch that video here and join Cass’ next presentation (details below).
Legal trust structures can protect your family wealth from:
sudden tax changes
aggressive policy shifts
legal and financial risks
It’s like insurance for your family wealth with the cost to set up a family protection trust being a far, far smaller than what you could lose if wealth taxes are introduced.
The bottom line is that Division 296 may be paused. But the mindset behind it is very active. This isn’t if more revenue grabs are coming. It’s when — and whether you’re ready.
Join Cass to hear more
7:30pm AEDT/Syd
Wed 29 October
