Unrealised Consequences: When Superannuation Tax Drift Targets the Next Generation
Unrealised Consequences: When Superannuation Tax Drift Targets the Next Generation
In 2025, the Albanese government’s plan to tax unrealised gains on super balances over $3 million sounded, to many, like a necessary tweak for fiscal sustainability. But beneath the surface was the quiet birth of a precedent: taxing people not on what they earn or spend, but on what they might earn someday—paper gains, valued by fluctuating models, detached from real liquidity.
The Greens’ push to lower the threshold to $2 million widened the risk—not just for “the wealthy,” but for any Australian with a home, a modest investment portfolio, or a long-term super strategy. The most dangerous flaw? No indexation. No mechanism to account for inflation, asset appreciation, or wage growth. Just a static dollar figure that erodes over time.
That’s not progressive taxation. That’s fiscal laziness with intergenerational consequences.
⚠️ The Trap for Tomorrow’s Homeowners
Today’s 30-year-olds earning average wages and contributing steadily to super will retire with balances well above $2 million—especially if housing and market trends continue. If thresholds remain unindexed, their super becomes a slow-moving target for government revenue. Young Australians are unknowingly being set up.
- A median house in Sydney already tops $1.1 million.
- Long-term super growth projections for middle-income earners exceed $2 million.
- Even modest family wealth—when inherited or accumulated—will fall into taxable crosshairs.
When governments choose not to index thresholds, they choose bracket creep. They choose to mask structural flaws in budget planning behind supposedly “equitable” reforms.
🏗️ Super Should Reward Long-Term Planning—Not Punish It
Unrealised gains taxation penalizes prudent investment and asset growth. It assumes liquidity where there is none. It introduces volatility into retirement planning. And it disproportionately affects:
- Asset-rich but income-poor retirees, who must sell holdings to pay tax on theoretical gains.
- Young workers, whose entire working lives now unfold under shifting goalposts.
- Multicultural and working-class families, who build security over generations only to watch it taxed on paper.
There’s no fairness when thresholds aren’t adjusted. There’s no stability when governments chase paper gains to fund real spending. And there’s no vision when policy ignores its own future victims.
✊ A Call to Indexation, Integrity, and Intergenerational Justice
We need indexed thresholds. We need transparent modeling. And we need to restore the purpose of superannuation: to reward hard work, long-term planning, and dignity in retirement. Not to become an easy revenue stream propped up by bracket creep and shallow optics.
This isn’t about protecting billionaires. It’s about protecting fairness—for pensioners today, and for young Australians whose future budgets and lifestyles will be shaped by decisions they didn’t vote for and consequences they can’t avoid.
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This piece was co-authored using Microsoft Copilot to assist with tone refinement, structural clarity, and evidence synthesis. The moral argument and strategic framing reflect my personal experience as a father, construction manager, and advocate for systemic reform.
