How our journo sniffed out a sneaky new super tax

The Australian’s economics editor Matthew Cranston scooped everyone before the federal Budget and keeps breaking huge yarns about more nasty surprises you weren’t supposed to know about. Now Matt’s revealing another whopper: the tax change that means super funds will pay a higher effective tax rate on some investments. 

Read more about this story at theaustralian.com.au and see the video by subscribing to our YouTube channel.

Labor’s hidden super tax to hit $372bn worth of assets despite promises to carve out retirees

Jim Chalmers faces new backdown over ‘stealth tax’ hitting millions of super funds

Labor backbencher goes to ground after she admits tax changes might be too broad

This episode of The Front is presented by Claire Harvey, produced by Kristen Amiet and edited by Tiffany Dimmack. Our team includes Lia Tsamoglou, Joshua Burton and Jasper Leak, who also composed our music. 

See omnystudio.com/listener for privacy information.

Speaker 1: From The Australian, here's what's on the front.

Speaker 2: I'm Claire Harvey.

Speaker 1: It's Wednesday, August 26, 2026. The Australian's economics editor, Matthew Cranston,

Speaker 1: scooped everyone before the federal budget and keeps breaking huge

Speaker 1: yarns about nasty surprises you weren't supposed to know about.

Speaker 1: Widows tax, death tax, soaring rents, crashing confidence. Now Matt's

Speaker 1: revealing another whopper. The tax change that means super funds

Speaker 1: will pay a higher effective tax rate on some investments.

Speaker 1: He's here in just a moment.

Speaker 3: It's a responsible budget and it's a reforming budget which

Speaker 3: builds resilience and bolsters our economy.

Speaker 2: It was already billed as once in a generation.

Speaker 1: But it's Labor's broken promises on property taxes that could

Speaker 1: come back to bite. Matthew Cranston is the Australian's economics editor.

Speaker 1: And even before the May 2026 budget, if you were

Speaker 1: reading Matt's stories, you knew what was going to happen

Speaker 1: because he broke all the big yarns about the changes

Speaker 1: to property taxes in particular and many other stories. Matt,

Speaker 1: you've now broken a new story about something that was

Speaker 1: in the budget all along that perhaps people like me

Speaker 1: didn't quite grasp the significance of. It's about superannuation.

Speaker 2: What does it mean?

Speaker 1: Yeah.

Speaker 4: I mean, it took me over an hour and a

Speaker 4: half to work through this spreadsheet of people explaining to

Speaker 4: me how it works as well. But yeah, over 100

Speaker 4: days since the budget and this one little thing has

Speaker 4: come out and it's actually a really big thing. So

Speaker 4: everyone's got super, but how does that super make investments?

Speaker 4: So you've got a super fund. They don't go and

Speaker 4: buy stocks, I don't know, clicking on Comsec. They invest

Speaker 4: in things like managed investment trusts. So- Whilst the tax

Speaker 4: rates on superannuation have not changed, the way the effective

Speaker 4: tax rate works in these managed investment trusts has changed.

Speaker 4: And it's changed because of a technical thing called capital

Speaker 4: loss ordering. So it just basically means when you make

Speaker 4: a loss on something, you can offset it against a gain.

Speaker 4: But now the ATO wants to say, okay, well, when

Speaker 4: you offset that loss, you have to only do it

Speaker 4: on these specific gains first.

Speaker 2: So that's an ordering thing.

Speaker 4: So what ends up happening is that the trust ends

Speaker 4: up having a higher effective tax rate in many circumstances.

Speaker 4: And then that means when they go to send that

Speaker 4: money on the investment back to the super fund, it's

Speaker 4: been hit with a higher level of tax. So therefore,

Speaker 4: the super fund is therefore hit with a higher level

Speaker 4: of tax. Claire, it's called an effective tax rate. And

Speaker 4: a lot of Australians don't understand this effective tax rate

Speaker 4: and how it works.

Speaker 2: But it's effectively a higher tax on your super fund.

Speaker 1: All of these things in the budget that we've learned

Speaker 1: about since the budget was handed down, and we've learned

Speaker 1: about them because you've broken these stories. There was a

Speaker 1: widow's tax that the government hadn't told us about on

Speaker 1: budget night. There was a death tax. That might be

Speaker 1: a bit of a cheeky way to talk about it,

Speaker 1: but it was a change to the way trusts are

Speaker 1: managed after someone dies. Were these unintended consequences of a

Speaker 1: big picture policy that Jim Chalmers and Anthony Albanese came

Speaker 1: up with, or was this part of the design all

Speaker 1: the way along and they've just been hoping nobody worked

Speaker 1: it out?

Speaker 4: It's a very good question. I think it's actually half

Speaker 4: and half. I mean, even that may be the wrong answer,

Speaker 4: but a bit of both in the sense that sometimes

Speaker 4: when we go to follow up these stories, I get

Speaker 4: a sense that sometimes the government and whether that's treasury

Speaker 4: or the ATO or the treasurer's office or whatever, they

Speaker 4: might not be across it perfectly. And I'm not having

Speaker 4: a go, but I'm just saying that that's the sense

Speaker 4: that we pick up on. And it's sort of like, well,

Speaker 4: what is actually the rule here? What is actually the

Speaker 4: way to treat this vehicle or this person or this tax?

Speaker 4: And it takes hours to get a response. And I

Speaker 4: think that's because either they didn't actually know or they

Speaker 4: did know and they just didn't want to tell people.

Speaker 1: I can imagine the dread on the faces of the

Speaker 1: people in the treasurer's office when they see your number

Speaker 1: on their phone. But that question of, let's say, in

Speaker 1: Jim Chalmers' office, you might be dealing with a media

Speaker 1: advisor or a policy advisor who might not necessarily know

Speaker 1: the fine detail of something that you're asking about. But

Speaker 1: the budget is worked up in the Treasury Department. Surely

Speaker 1: somebody in Treasury knew that all these things were the

Speaker 1: consequence of.

Speaker 2: 100%.

Speaker 4: And look, just with this super story today, it took

Speaker 4: hours and hours and hours for them just to come

Speaker 4: back after a question of, do MITs, do managed investment trusts,

Speaker 4: are they now subject to this new capital loss ordering?

Speaker 2: Hours and hours and hours and hours to get a response.

Speaker 2: And then when I did get a response, there wasn't

Speaker 2: an answer to that question.

Speaker 4: It was, we're doing consultation on it.

Speaker 2: Now, is that because they didn't know?

Speaker 4: And I suspect, and I've been told because people have

Speaker 4: spoken to them, said that they confirmed, yes, they are

Speaker 4: subject to the new capital loss ordering rules. And that's

Speaker 4: what I put in my story is that they had

Speaker 4: confirmed it to other people that this is the case.

Speaker 4: So they don't confirm it to me, but they confirm

Speaker 4: it to other people. And that's the difficulty of being

Speaker 4: a journalist is you don't get clear answers. But if

Speaker 4: they did know that, then is that their modus operandi?

Speaker 4: Is that, are they actually trying to change all the

Speaker 4: effective tax rates, not just the headline? So we've had

Speaker 4: this headline of the CGT and negative gearing, and that's

Speaker 4: all very clear what's happening there. But then how does

Speaker 4: that affect all these other investments? And how does it

Speaker 4: change the effective tax rates on things? And maybe they

Speaker 4: do know that impact very much. And they're thinking, aren't

Speaker 4: we smart? We've now been able to raise more tax

Speaker 4: because the effective tax rates are affecting all sorts of

Speaker 4: other investments. And that's a great way to help the

Speaker 4: Labor government raise a net $ 77 billion from these tax changes.

Speaker 1: There's an ideological component, of course, to the big changes

Speaker 1: in the budget, the capital gains tax and negative gearing.

Speaker 1: These are things that, at Jim Chalmers' heart, I'm sure

Speaker 1: he wanted to achieve as Treasurer. We've always heard that

Speaker 1: he wanted to be a Treasurer who did things, who

Speaker 1: made big changes.

Speaker 3: Speaker, this is the most important and ambitious budget in decades.

Speaker 3: Important because the world is throwing a lot at us.

Speaker 1: But we're still talking about the budget. It's now late August. It's,

Speaker 1: as you say, more than 100 days old now. I'm

Speaker 1: hearing from kind of senior people in Labor that it's

Speaker 1: going to be OK. The election's a long way away.

Speaker 2: This will ease.

Speaker 1: Matt Cranston, we'll move on to something else. But then

Speaker 1: you get the sense from people who are perhaps a

Speaker 1: little bit more exposed to voter sentiment, like backbenchers, that

Speaker 1: they're not happy about this at all, that they're starting

Speaker 1: to panic.

Speaker 4: Yeah, I think on the one hand, the tax changes,

Speaker 4: different tax changes come in at different times. And the

Speaker 4: July 1 start date to the changes in the 50%

Speaker 4: discount removal for CGT, the impact of that, you won't

Speaker 4: actually see the actual, actual, actual impact of it until

Speaker 4: late 2028 after the next election, right? So that's a

Speaker 4: big thing because if you don't know how much you're

Speaker 4: actually going to be hit, then you might be relaxed

Speaker 4: and that could be helpful for the Labor government. They

Speaker 4: will obviously have to deal with the broken promise politics

Speaker 4: around all that sort of thing. But then the antithesis

Speaker 4: to that is that over the next 12 months, as

Speaker 4: people prepare for that change, accountants are going to slowly

Speaker 4: start to tell all their clients and people are going

Speaker 4: to be informed of what they are likely to be

Speaker 4: hit with. So not what the actual is, but what

Speaker 4: they're likely to be hit with. Might they need to

Speaker 4: restructure from a trust into a company? Might they need

Speaker 4: to think about whether or not they are going to

Speaker 4: buy that new product and negatively gear it? Because once

Speaker 4: they buy a new product and negatively gear it, they

Speaker 4: can't then sell it to someone who wants to negatively

Speaker 4: gear it because it's then.

Speaker 2: Existing, not new. So there's all these little things that

Speaker 2: people are going to start.

Speaker 4: To wake up to, and that may actually do harm

Speaker 4: to Labor, because there might be more and more people

Speaker 4: learning about what these tax changes do.

Speaker 2: We try and do.

Speaker 4: A good job of explaining all these things to inform people,

Speaker 4: but not every journalist is out looking at effective tax rates.

Speaker 2: And people sort of don't understand it.

Speaker 4: So we're hearing also, and we wrote a story about

Speaker 4: this recently, that constituents are complaining to their MPs about

Speaker 4: how it affects them as they slowly start to find

Speaker 4: out about it. I intercepted an email or I received,

Speaker 4: I don't know what the verb is for that, but

Speaker 4: I got an email that showed that a Labor backbencher,

Speaker 4: Claire Clatterham, actually responding to a constituent who was concerned

Speaker 4: about the breadth of the CGT application. And she said

Speaker 4: that she agreed with that constituent saying that whilst it

Speaker 4: was good to have a tax change on property investments

Speaker 4: and the concessions around that, that she didn't agree that

Speaker 4: it should be used across all assets. Now, that's an

Speaker 4: amazing thing to come from inside labor. And then since

Speaker 4: that time that we wrote that, story, there's been almost

Speaker 4: a shutdown on the way Labor politicians respond to constituents.

Speaker 4: So I think that's actually a problem because if you

Speaker 4: don't respond, the concerns and the complaints gets pent up.

Speaker 4: So that might do harm to Labor as well. I'm

Speaker 4: not going to pretend I know how this is going

Speaker 4: to play out. They're just some options of how it

Speaker 4: may play out.

Speaker 1: It's partly about the opposition being able or opposition figures

Speaker 1: being able to turn this into retail politics as well,

Speaker 1: isn't it? I remember when the franking credits policy was

Speaker 1: put up by Bill Shorten and he was seeming to

Speaker 1: be cruising into the lodge and then the opposition.

Speaker 2: Said pension tax. Yeah, that's right. And that became what

Speaker 2: the election was about.

Speaker 3: We've come to meet the people that Bill Shorten wants

Speaker 3: to rock.

Speaker 1: So if the opposition isn't able to crystallise it, and

Speaker 1: this comes back to the point about complexity, doesn't it?

Speaker 4: Yes.

Speaker 2: Will they survive it?

Speaker 4: Well, I mean, I tried to explain it and I'll

Speaker 4: show as much humility as I can. I don't think

Speaker 4: many people who didn't know about it any more clearer

Speaker 4: after my attempted explanation of.

Speaker 2: This super tax thing.

Speaker 4: But I gather they sense they should probably check it

Speaker 4: for themselves. And if you're not doing that, then in

Speaker 4: the words of Kerry Packer, you need your head read, right?

Speaker 4: If you're not trying to minimize your tax and to

Speaker 4: think about how the government, which will be the highest

Speaker 4: income taxing government in history this year, if you're not

Speaker 4: thinking about that, then you need to.

Speaker 2: You have to. You should. And this is what our

Speaker 2: paper is.

Speaker 4: We're getting more and more value, more and more readers

Speaker 4: to our newspaper because this is what people are thinking.

Speaker 2: Yeah, actually, I should know about this stuff.

Speaker 1: Coming up, the big tax changes nobody's talking about. One

Speaker 1: of the scoops you broke before Budget Night was about

Speaker 1: the working Australians tax offset, the WADO, as our friend

Speaker 1: Jeff Chambers calls it.

Speaker 2: I love it. I think there was an Australian cricketer

Speaker 2: who had that nickname.

Speaker 1: Yeah, there should be if there wasn't. That's a rebate

Speaker 1: on their income tax that Australians will get, $ 250. But

Speaker 1: I have never heard anyone go, oh, well, never mind.

Speaker 1: Don't worry about the widow's tax. We're getting the waddo.

Speaker 1: So what was the point of that? It's cost the

Speaker 1: government a fortune or will cost the government a fortune.

Speaker 2: It's interesting.

Speaker 4: It's a new architecture, if I can say that very

Speaker 4: wonky word. Treasury have got this new architecture where they

Speaker 4: can say, well, our principle is that we want to

Speaker 4: divide up between how we tax labor income and how

Speaker 4: we tax capital income. And they never really had a strong,

Speaker 4: effective way of doing that.

Speaker 2: Now they do.

Speaker 4: They've got this architecture now where they can say, well, look,

Speaker 4: we can start giving more back to people who only

Speaker 4: ever make money from their hands and they're working, that

Speaker 4: sort of thing. And we can level up, is what

Speaker 4: they say. And there's a whole big debate among economists

Speaker 4: about whether or not The tax treatment of capital and

Speaker 4: the tax treatment of labor income should be the same.

Speaker 2: So if you've got a job, we like you.

Speaker 1: If you're earning your money from sort of nefarious things

Speaker 1: like trusts, you know, we're going to punish you.

Speaker 4: Or shares or property or anything that you take a

Speaker 4: risk and invest in or a small business. If you

Speaker 4: go and use your residential premises to get the equity

Speaker 4: to put into a small business, that's going to get

Speaker 4: taxed differently. And so people need to sort of work out, well,

Speaker 4: how do they feel about that? How do they genuinely

Speaker 4: feel about that? And then maybe they can think, well,

Speaker 4: is this the right thing to be doing? And the

Speaker 4: Watto also allows them to make an announcement every year

Speaker 4: that we're giving you more money back.

Speaker 3: We will put more money into the pockets of 13.3

Speaker 3: million workers with a new $ 250 Working Australians tax offset.

Speaker 4: But, you know, in saying that, Claire, a lot of

Speaker 4: people might say, well, You know, the water, I don't

Speaker 4: even know what that is, but yeah, okay, when it

Speaker 4: comes to budget time or even election time, I'll remember it,

Speaker 4: and that's nice because it's the government giving me back money.

Speaker 2: But there's a thing called bracket creep, right?

Speaker 4: And that is when your salary or your earnings move

Speaker 4: up into a new threshold, you get taxed more. And

Speaker 4: the coalition have actually got a policy to stop that

Speaker 4: from happening, but you wouldn't sort of know about it.

Speaker 4: I mean, it's the biggest ticket, one of their biggest

Speaker 4: items in their policies in terms of expense. And it's

Speaker 4: their way of challenging Watto because it's saying, well, we

Speaker 4: don't need to give you.

Speaker 2: Your money back.

Speaker 4: We just won't take it from you in the beginning

Speaker 4: through this bracket creep and higher taxes. But I don't

Speaker 4: think the sell on that has been effective.

Speaker 1: Matt Cranston, thank you very much.

Speaker 2: Pleasure, Claire.

Speaker 1: Matthew Cranston is The Australian's economics editor. Our subscribers get

Speaker 1: all Matt's scoops direct to their phones, along with all

Speaker 1: the nation's best political coverage. Join us at theaustralian.com.au.