A proposed US tax reform is raising concerns across the Australian superannuation sector, with fears it could reduce investment returns for millions of retirees. The legislation—part of a broader push by US lawmakers to protect domestic capital—includes provisions that would impose additional tax burdens on foreign investors, including Australian superannuation funds.
Known informally as the “Big Beautiful Bill” or the Defending American Jobs and Investment Act, the proposal targets countries the US views as having “unfair” tax policies. If passed, it could require Australian super funds to pay withholding taxes directly to the US government on income generated from US-based investments.
Australia’s super funds collectively hold more than US$400 billion in US assets, making them particularly exposed to any changes in tax treatment. Analysts warn that the proposed measures could erode long-term returns, potentially leading to lower retirement balances and placing additional strain on the broader financial system.
Industry groups, including the Association of Superannuation Funds of Australia (ASFA), have flagged the issue with the Australian government and are calling for diplomatic engagement to prevent unintended consequences. The Treasury is understood to be monitoring the situation, with officials considering options to mitigate the fallout if the bill passes.
The proposal reflects a broader shift in US fiscal policy that increasingly treats foreign capital through a strategic lens. As such, it highlights the growing risks super funds face in an era of heightened economic nationalism and international tax friction.
