Australia’s three major accounting bodies have been unanimous in welcoming changes to the proposed Division 296 measure, noting it will bring the impost in line with established tax policy.
Chartered Accountants Australia and New Zealand (CAANZ) chief executive Ainslie van Onselen thanked the government for listening to the concerns of the accounting profession, noting the original policy settings were unfair and would have been complex to administer.
“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,” van Onselen 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.”
CAANZ advocacy, public and government affairs group executive Damian Ogden called for the government to move quickly to implement the revised tax policy before its new start date of 1 July 2026.
“We encourage the government to get this policy through parliament as soon as possible to give our members the certainty they need on how and when it will apply to their clients,” Ogden said.
CPA Australia superannuation lead Richard Webb said parliament should legislate the changes now the government has responded to criticism and campaigning from industry groups and stakeholders.
“Providing certainty and financial stability for this and future generations of retirees is critical. Taxing unrealised gains would have distorted our tax system, which needs broader reform,” Webb said.
“The indexing of the Division 296 proposal and taxing of realised earnings will ensure that Australia’s superannuation system remains fit for purpose for future generations.
“Bracket creep already has a silent eroding effect on personal finances. Allowing further erosion of superannuation savings would have been contrary to the fundamental principles of our tax system.”
Institute of Public Accountants senior tax adviser Tony Greco said the government had adopted a more equitable and sustainable approach to taxing superannuation earnings.
“The decision to remove unrealised gains from the calculation of taxable earnings addresses one of the most contentious aspects in the original proposal,” Greco added.
“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 SMSFs.”
