In this guide
What Labor’s win means for super
The Albanese Labor government’s emphatic election victory means its plan to double the tax rate on super funds with a balance of more than $3 million from 15% to 30% will now proceed.
Controversially, the plan (known as Div 296) includes the taxation of unrealised capital gains.
Passage of the legislation will depend on the make-up of the Senate, but Labor can now claim it has a mandate for the change.
Learn more about the proposed policy Div 296 proposal.
Tax cuts for all taxpayers will also go ahead. From 1 July 2026, the tax rate for the lowest income tax bracket will be cut from 16% to 15%, and then to 14% from 1 July 2027.
The incoming government is also expected to proceed with its Delivering Better Financial Outcomes reforms. This will allow super funds to offer more targeted personal advice to members on issues such as investment choice, retirement options and insurance.
The industry is now waiting to see which minister will be given responsibility for superannuation and financial services.
Labor’s victory also means the Coalition’s policy to allow early access to super for housing is also off the agenda, at least for the next three years.
Financial advisers want Labor to do more
Labor’s honeymoon period may be short-lived where super and financial services are concerned.
The Financial Advice Association Australia (FAAA) is calling on the new Labor government to fix the Compensation Scheme of Last Resort (CSLR), instigate a financial services razor gang to cut red tape and support new entrants to the financial advice profession.
Its priority actions for the new government also include providing adviser access to the ATO portal, delivering effective Delivering Better Financial Outcome (DFBO) reforms and implementing a standardised fee consent form.
“Australians are increasingly recognising the vital role that quality advice plays in achieving financial wellbeing. This is a time for genuine policy progress, and we are ready to assist the government in delivering it," FAAA chief executive Sarah Abood said.
“One of the clearest messages from our members is that well-meaning but overly complex regulation has made financial advice harder to access and more expensive. We need to cut unnecessary red tape and ensure that advisers can focus on delivering great outcomes for their clients,” she said.
Fixing the CSLR so that advisers do not unfairly bear the cost of product failures is particularly important for the Association and it also called on the government to do more to grow the profession.
“We are optimistic about the opportunities ahead and confident that by working together, we can create a more sustainable, fair and accessible financial advice system for the benefit of all Australians," Abood said.
ATO targets in-house SMSF audits
The Australian Taxation Office (ATO) is still finding numerous instances of in-house audits of self-managed super funds despite them being disallowed since 2020.
An 'in-house audit' refers to an auditor who works for a firm, or network firm, that also provides services such as accounting or administration to the same SMSF clients.
"In a recent review using data matching, we focused on auditors who still perform in-house audits. Our risk assessment shows around 800 auditors might still be doing in-house audits," the ATO said in a statement.
Auditors are only allowed to perform in-house audits in very limited circumstances.
The ATO recently reviewed 30 auditors suspected of doing in-house audits. As a result of the review, 14 auditors were referred to ASIC, six were deregistered voluntarily, eight received education and two were compliant.
"Firms must follow independence requirements when planning their structure and their audit engagements. They should not rely on one referral source for their fees. ASIC suspended three high-volume SMSF auditors linked to an SMSF administration provider for not considering these factors," the ATO said.
General transfer balance cap to increase on 1 July 2025
The general transfer balance cap (TBC) will be indexed in line with inflation on 1 July 2025 and will increase by $100,000 from $1.9 million to $2 million. The defined benefit income cap (DBIC) will increase to $125,000 (from $118,750) for the 2025–26 income year.
The ATO is reminding people that the increase will have flow-through impacts for individuals with a personal TBC. These individuals will be entitled to an increase of their cap if they have not previously been at, or exceeded, their cap.
"Their increase will be a proportion of the $100,000 and will depend on their unused cap space. Individuals starting a pension for the first time on or after 1 July 2025 will be entitled to a personal TBC of $2 million," the ATO said.
You can view your personal TBC in your ATO online services through myGov.
