Labor upgraded revenue forecasts from superannuation taxes in its budget by $9.7b up to the 2028-29 financial year, in part due to plans to tax unrealised gains on assets in funds above $3m.

This change would target Aussies with self-managed super funds and mean those with assets such as properties or land would pay taxes on gains on the value of these assets now, despite the return not being realised.

It would also double the tax rate on super earnings above $3m to 30 per cent and will not index this threshold over time as inflation changes.

The change has met fierce opposition from Wilson Asset Managers’ founder Geoff Wilson, who blasted Labor’s move in an interview with SkyNews.com.au.

“It actually is incredibly negative for superannuation,” Mr Wilson said on Wednesday.

“(Former prime minister) Paul Keating has said privately that he thinks the proposal is a very poor proposal.”

He noted those who have illiquid investments in self-managed super funds would effectively be paying a tax on a profit they “may never realise”.

“It's like the value of your house going up and each year the government saying: ‘Look, we're going to make you pay a tax on the value that house’,” Mr Wilson said.

“It's very negative for… farmers that have their farms in their self-managed super fund, small businesses (that) use their self-managed super funds to fund property purchases for their small business.

“Pharmacists I know will all be negatively impacted. There's been a big outcry from people that are going to be negatively impacted by this policy.”

Labor tried and failed to get the legislation through in November and attempted to woo the Senate into agreeing to the changes with a promise to curtail surcharges on debit and credit cards in February.

Mr Wilson warned there was a “high risk” Labor could attempt some “cattle trading” with crossbenchers in the Senate to get the legislation through.

“The government tried incredibly hard and it surprised me how hard they tried because they put it together with another bill,” he said.

He noted Labor could try and attach support for the legislation with other bills in Parliament before airing concerns the government may attempt to tax unrealised gains on other assets.

“To me, one of the risks is it's the thin edge of the wedge, because... it starts off by just being superannuation then eventually the tax on unrealised gains may flow on to other things,” Mr Wilson said.

When Labor proposed the changes to super taxation, Treasurer Jim Chalmers said it would only impact 0.5 per cent of the population – or about 80,000 people.

However, as the $3m threshold does not index this figure could soon balloon out, according to the Financial Services Council.

“If the government does not index the proposed $3 million superannuation balance cap, 500,000 Australian taxpayers will breach the cap in their life and face a 30 per cent earnings tax, including 204,000 Australians under the age of 30," CEO of the FSC Blake Briggs said in March 2023.

It privately met backlash from Mr Keating, who enacted the Superannuation Guarantee in 1992, during private talks with industry super executives and union leaders last year, according to The Australian Financial Review.

The former prime minister reportedly said the government’s refusal to index the $3m threshold with inflation was “unconscionable”.