When Division 293 was introduced, requiring some of us to pay an additional 15% tax on compulsory super contributions, I called it the “Rich Man’s Tax” (using “man” as a general term for all people). The logic seemed clear: if I was being asked to pay double the tax on contributions my employer was making for my future retirement—so I wouldn’t need to rely on the public pension system—I must be considered “rich,” right?

By that measure, it seems fair to refer to the incoming Division 296 as the “Super Rich Man’s Tax.” Under this proposal, the government will require me to pay tax on money I have not yet earned—and might never earn—given the realities of market fluctuations. Does this mean I must be “super rich” to be affected?

Let’s look at a real-life scenario. Imagine a young person finishing school at the end of 2025, turning 18, and starting work as an apprentice in 2026, aiming to become a tradie. The starting salary is $60,000, with super at 12%—that’s $7,200 gross, $6,120 after contribution tax. Suppose this person opens an account in Australian Super’s Balanced Fund, which has a long-term return of 8% per annum (before tax), and receives a modest 5% pay rise each year. This is a realistic and modest example—someone who is not, and likely never will be, what most would call “super rich.” Wouldn’t you agree?

Now, let’s do some basic calculations.

By the time this person turns 65, their superannuation could reach $4.11 million. That means they would be subject to the so-called “super rich man’s tax.” In fact, using this example, they would cross the $3 million threshold at age 61, with several years ahead where they’d be taxed on money not yet earned.

This assumes no additional concessional or non-concessional contributions—just the standard, compulsory contributions.

To put the $4.11 million figure in perspective, if we adjust it for inflation at 3% CPI, its present-day value is just $1.262 million—an amount that many would consider only just enough for a comfortable retirement at age 65.

So, the question arises: Is the current government being fully transparent when it says this tax on unrealized income will only affect 0.5%—or 80,000—of the wealthiest Australians? In reality, it seems likely that many more people, including our children and future generations, could be impacted as time goes on. Isn’t this realization enough for us to pause and consider whether this tax is truly fair and sustainable?

If the government’s intention is to tax only the current 0.5% of wealthy Australians, shouldn’t they:

• Ensure the $3 million threshold is indexed, just like other superannuation contribution limits are? Is it reasonable to trust that a future government will address this, when there is already a clear legal pathway for indexing now?
• Consider introducing an averaging mechanism to smooth out the effects of sharp rises and falls in the market value of superannuation assets? There are already established tax rules for averaging primary production income to handle volatility—why not apply a similar approach here?

Ultimately, it’s up to us as a community to think about the next generation, and those that follow, and to question whether this policy could undermine their retirement security, potentially pushing more people back onto social support—an outcome none of us want to see.