THE SQUIZ
The policy kite has landed… Yesterday, PM Anthony Albanese and Treasurer Jim Chalmers confirmed that Aussies with more than $3 million in their superannuation accounts will have their investment taxed at a higher rate. It’s designed to leave about $2 billion a year in the government’s under-pressure budget. As for how it will work, Chalmers says tax on the earnings of super balances over $3 million will rise from the concessional rate of 15% to 30%. The change isn’t retrospective (that is, it will impact investments that hit that mark after the change comes into effect) – and it won’t happen immediately. The change has to pass the parliament, and the start date will be July 2025. Note: that’s after the next federal election, so voters will be able to make their feelings known about the broken promise made by Team Albanese not to change the rules.

SO WHO WILL BE PAYING?
Albanese emphasised that “99.5% of people with superannuation aren’t affected by this reform”. About 80,000 Aussies are expected to be impacted, but Chalmers says they’ll continue to receive tax breaks on their balances under the $3 million threshold. Chalmers also released data to drive his point home showing that tax breaks on super and capital gains are worth $100 billion a year. Chalmers says the government doesn’t “begrudge anyone who has made a lot of money” – he says the changes are “modest” and will help to create a more equitable/sustainable system. But the Coalition will oppose the changes – Treasury spokesman Angus Taylor says Aussies “don’t want to see a government that can’t manage its own spending and has to come after Australians with higher taxes”.

SO THE BUDGET’S TIGHT, EH?
Looks that way, and that’s no surprise given the tricky times – but according to the latest economic data, it’s not all bad. Retail sales for January showed a rebound from December’s fall as Aussies hit the department stores and ate out more. Overall, the figures were the best since November 2021, when Aussies shopped up a storm after COVID restrictions were lifted. And CoreLogic says the rate of home price falls slowed in February, with its national index recording the smallest monthly fall since May 2022, when interest rate hikes started. As for what’s next: hold onto your hat today when the big one lands… The latest national accounts data will be released this morning – it’ll tell us where Australia’s economic growth landed for 2022 and give analysts intel on whether a recession’s on the horizon.