Abstract

This paper considers high balance superannuation holders in Australia and provides a statistical summary of their income and wealth position. There is a debate in Australia around the taxation of superannuation, in particular the government's plans to increase income taxation for persons with superannuation balances greater than $3 million. There are concerns that higher rates of taxation, particularly the application of unrealised capital gains will be challenging to some account holders and lead to unintended consequences around investment decisions. This paper pays attention to these households to better understand the financial position of these households to inform the debate. We find that high balance superannuation households have substantial wealth not only in superannuation but also other asset classes. Some fairly rudimentary stress testing suggests most of these households faced with an increased taxation burden as proposed by the Australian government would have ample funds to cover most reasonable scenarios.

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