The announcement comes after months of political and industry pressure and represents a major shift from the original policy.

It addresses prior criticisms related to indexation and taxation of unrealised capital gains.

Under the revised policy, balances between $3 million and $10 million will face a 30 percent concessional tax rate.

Both thresholds will now be indexed to inflation to prevent bracket creep affecting middle-income Australians.

The government has also removed taxes on unrealised capital gains, with changes applying solely to realised earnings from 2026.

“This has been a contentious policy,” Chalmers stated, indicating that it affects less than 0.5 percent of Australians, with about 80,000 anticipated to have over $3 million in superannuation next year.

Key Benefits

The reform package significantly improves the Low Income Superannuation Tax Offset (LISTO).

Annual payments will rise from $500 to $810, with an increased eligibility threshold from $37,000 to $45,000 by 2027.

This adjustment will assist approximately 1.3 million Australians, mainly benefiting women.

Eligible workers could gain around $15,000 in retirement, increasing LISTO eligibility to 3.1 million Australians.

The changes could generate about $1.6 billion in net revenue by 2028-29, a decrease from the original $2.5 billion projection due to enhanced LISTO benefits and extended implementation.

The decision follows China’s recent restrictions on rare earth mineral exports, which are crucial for various technologies and manufacturing sectors.

The trade dispute affected global markets, resulting in a more than 2% decline in the benchmark S&P 500 Index.

Bitcoin experienced an 8.4% drop at $104,782 by 17:20 ET, while Ethereum, the second-largest cryptocurrency, fell by 5.8% to $3,637 at 17:21 ET.