No, not all politicians, Aboriginal people and churches exempt from Labor’s super tax
Soofia Tariq
July 01, 2025
WHAT WAS CLAIMED
All politicians, Aboriginal people and churches will be exempt from Labor’s superannuation tax changes.
OUR VERDICT
False. All politicians and Aboriginal people are not exempt and churches are not covered by the legislation.
AAP FactCheck – All politicians, Aboriginal people and churches are not exempt from Labor’s proposed 30 per cent tax on earnings from superannuation balances of more than $3 million, despite a claim circulating online.
There is no blanket exemption for Aboriginal people, while churches themselves aren’t even covered by the legislation as only individuals can hold super accounts.
State MPs are exempt from the tax on earnings from certain funds that are protected by the constitution, however commonwealth politicians are not.
The claim makes reference to the Labor government’s proposal to introduce a 30 per cent tax on the earnings from super balances of more than $3 million.
Currently, earnings are taxed at 15 per cent for most people, a rate the government proposes doubling for those above the balance threshold.
The increased rate will apply to the proportion of earnings that are above the threshold.
At present, about 80,000 Australians1 have more than $3 million in their super fund (page 5).
“The only ones not exempt from the new Labor tax is white Australia,” text overlaying one Facebook video2 reads.
“The bad part is the exemptions. So, all politicians will be exempt from this tax, all churches will be exempt from this tax, and all Aboriginals will be exempt from this tax,” the man in the video says.
A reverse image search of the clip shows it was originally posted on TikTok3.
When AAP FactCheck reached out to the man in the video for evidence of his claim, he replied that all politicians, Aboriginal people, and churches are exempt “should they be corporations or family trusts”.
Experts have clarified that the claim is false.
Miranda Stewart4, an expert in tax law at the University of Melbourne, explained superannuation only applies to individuals.
“Under Australia’s superannuation law, companies and family discretionary trusts cannot have a superannuation member account,” Professor Stewart said.
Labor’s proposal is set out in a draft bill5, which has yet to pass the Senate.
There is no mention of any exemption for Aboriginal people or any mention of churches.
A spokesperson for Treasurer Jim Chalmers, who is responsible for the changes, told AAP FactCheck the claims are incorrect.
“There are a small amount of constitutional exemptions, but as we’ve said, all MPs or MPs from a specific party are not exempt, nor are specific racial or religious groups.”
Those constitutional exemptions are mentioned in the draft bill (pp20-21) and draft regulations6 (p28).
They cover commonwealth judges and justices as well as state judges and justices, and some senior state officials.
The exemptions for the commonwealth positions stem from section 72(iii)7 of the Australian Constitution, which states judges’ pay cannot be diminished during their term in office.
The state exemptions, which include judges, justices, MPs, premiers, governors and heads of state departments, derive from section 114 of the constitution, which outlaws commonwealth taxation of state property.
This exemption only applies to these officials’ earnings from constitutionally protected funds, according to the explanatory memorandum8 (p38).
These funds are often available to high level state office holders, with some states operating their own funds for employees, according to the Australian Taxation Office9.
Everyone else must simply pay the 30 per cent tax on earnings if their super balance is more than $3 million.
There are separate provisions for those on “defined benefit” schemes.
These differ in function from regular superannuation.
Regular superannuation is an accumulation fund that increases over time, therefore earnings on that fund can be taxed over time.
The defined benefit schemes, however, provide a retiree with annual payouts “defined” by how long they worked for their employer and their salary level at the time of retirement.
Those with defined benefit schemes, therefore, have their tax liabilities deferred until the benefit is received, usually at the age of retirement.
The explanatory memorandum10 includes a provision to charge an interest rate on those liabilities (p30), intended to prevent those on defined benefit schemes gaining an unfair financial advantage.
Federal politicians employed from the 2004 election onwards are installed in a regular superannuation fund, with an employer contribution of 15.4 per cent of their salary.
Those elected before 2004, such as Prime Minister Anthony Albanese and Opposition Leader Sussan Ley, are on a defined benefit scheme.
Michael Dirkis11, professor of taxation law at the University of Sydney, confirmed to AAP FactCheck that, unlike commonwealth and state justices and judges and state officials, there’s no specific exemption for federal politicians.
They will therefore be bound by the same requirements as the general public with regard to regular superannuation and defined benefit schemes.
AAP FactCheck is an accredited member of the International Fact-Checking Network12. To keep up with our latest fact checks, follow us on Facebook, Instagram, Threads13, X, BlueSky14, TikTok15 and YouTube16. (AAP)
