"Framing Fairness"

Division 296 and the Electoral Power of Wealth Inequality

By Sarah Harding
Date submitted
Friday 4th July 2025

Introduction
Division 296, a 30% tax on realised and unrealised capital gains for superannuation balances over $3 million, proposed legislation introduced by the Albanese Government post 2025 election, marks a pivotal shift in Australian fiscal policy. Using Stone’s Causal Stories, Kingdon’s Multiple Streams, Schneider and Ingram’s Social Construction, and Baumgartner and Jones’ Punctuated Equilibrium, this essay argues that the problem of superannuation tax concessions was deliberately framed by public authorities as a moral failing rather than a systemic structural issue. The government’s framing recast a technical tax reform as a compelling narrative of fairness, effectively mobilising younger voters and legitimising symbolic action. By strategically aligning the problem, policy, and politics, the government acted on a policy window that advanced both electoral interests and broader agenda setting goals.

How the Problem Was Defined by Public Authorities
Causal Stories: Moralising Wealth Accumulation
Public authorities deliberately framed the problem underlying Division 296 through a calculated moral narrative, designed less to correct economic inefficiencies and more to manufacture public consent for a symbolic policy shift. Branded as an “eat the rich” tax, the government's framing of large superannuation balances as a moral and fiscal driver of wealth inequality helped the government tap into public concern over intergenerational inequity (O’Brien, 2025).

Drawing on Stone’s (1989) causal stories framework, this framing was not incidental; it was an exercise in political storytelling aimed at scapegoating individuals rather than addressing systemic inequality. The Albanese Government adopted an intentional causal story, portraying retirees with superannuation balances exceeding $3 million as deliberate exploiters of generous tax concessions. This moralised framing presents wealth accumulation as a deliberate vice rather than a consequence of institutional
design, overlooking both the structural advantages afforded to the financially literate and well advised, and the broader societal benefits that can arise from individual prosperity. By doing so, the government redefined a structural issue as an individual ethical failing, effectively insulating itself from calls for deeper, redistributive and advice based reform. The government redefined superannuation’s purpose, with Jim Chalmers stating its sole objective was, ‘to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way’ (Chalmers, 2024).

This shift redefines superannuation from a personal retirement savings tool to a policy instrument aimed at addressing wealth inequality. In Stone’s framework, this narrative served four political functions: challenging the status quo, assigning blame, empowering policymakers, and mobilising new alliances. As Stone (1989) argues, intentional causal stories are powerful political tools because they simplify complex issues. In defining the problem, the government adopted this approach, framing wealth accumulation as a deliberate outcome of unfair advantage rather than a result of structural or institutional factors. This narrative sidestepped more complex and less politically palatable explanations, such as inadequate financial education in schools, unequal access to financial advice, or the broader role of neoliberal tax policy in facilitating wealth concentration and its potential benefits. Crucially, by framing the issue in moral terms, the government justified taxing unrealised capital gains as a controversial measure by appealing to public resentment toward inequality.

Social Construction: Constructing the “Undeserving”
The government's framing of this issue aligns with Schneider and Ingram’s (1993) social construction theory, which examines how political actors label target populations as “deserving” or “undeserving” to shape public perception and policy support. In this context, wealthy retirees, despite their diminishing electoral influence, were constructed as “undeserving” recipients of taxpayer funded concessions. In contrast, younger working Australians grappling with stagnant wages and worsening housing affordability were portrayed as “deserving” victims of systemic inequality. This binary framing heightened the emotional resonance of Division 296 and helped legitimise the policy among Labor’s target voters.

Viewed through the combined lenses of Schneider and Ingram’s (1993) theory and Stone’s (1989) concept of causal stories, the Division 296 narrative emerges not merely as a response to inequality, but as a strategic political construction. It assigned moral responsibility, cultivated public support, and established legitimacy through the deliberate vilification of a once favoured group.

Why the Problem Was Defined This Way
The deliberate moral framing of Division 296 aligns with Kingdon’s Multiple Streams Framework with some exceptions. Unlike cases driven by visible policy entrepreneurs, this reform was government led based on polling and public feedback. A YouGov poll conducted in June 2025 for the Australia Institute found 52% of Australians support the proposed super tax, with only 26% opposed. Public and political support for Labor’s 2022 super tax helped frame generous concessions as a matter of equity and fiscal sustainability, activating the problem stream (Long, 2025). In the policy stream, the technical solution of taxing unrealised gains had long existed within expert circles but lacked political legitimacy. The success of the earlier reform rendered this option now viable. Politically, the Labor government’s majority governance, fragmented opposition, and rising public concern over wealth inequality created a receptive environment, activating the politics stream. The government strategically aligned policy streams to seize a policy window, proposing to raise the tax on super balances over $3 million to 30% and responding to public calls for fairness by taxing unrealised gains.

Baumgartner and Jones’ (1993) punctuated equilibrium theory also illustrates how the government reframed what had been a marginal, incremental tax adjustment after a long period of status quo into a matter of moral urgency. By constructing a new policy image that symbolised large superannuation balances as emblems of privilege and inequality, the government disrupted the status quo and elevated a narrow fiscal measure into a politically charged issue. This reframing helped build new political alliances, particularly with younger voters, and allowed the government to present itself as a moral “fixer” of structural injustice. Paul Keating's (2004) concept of government “steering” through agenda setting and normative framing is also relevant. Rather than intervening directly in markets, the Albanese Government used moral framing to steer policy outcomes and respond to public opinion. By framing Division 296 as a corrective measure against tax avoidance by the ultra-wealthy, the government reinforced its normative authority over economic fairness, responding to intergenerational discontent without engaging in more politically risky, comprehensive reforms.

Historical Resonance and Symbolic Power
The moral legitimacy of Division 296 draws on long standing structural patterns of wealth inequality, aligning with Piketty’s (2014) argument that capitalist systems, when left unchecked by strong redistributive mechanisms, naturally concentrate wealth over time. By invoking this broader historical context, the Albanese Government framed Division 296 not just as a fiscal measure, but as a symbolic correction for decades of policy inaction and rising inequality. The government’s use of value framing (Lindgren, 2022) cast Division 296 not as a technical tax reform, but as a moral corrective grounded in equality. By aligning the policy with the frustrations of younger Australians, locked out of housing and stalled by wage stagnation, it reframed retirement policy as a tool for generational justice as previously mentioned. Larger superannuation accounts were positioned as symbols of tax avoidance, reinforcing the legitimacy of a modest, complex reform. With a parliamentary majority, the move was politically low risk but high in symbolic reward. However, as Lindgren (2022) cautions, such framing can inflate public expectations, risking backlash if outcomes fall short. Ultimately, Division 296 was driven less by a commitment to redistribution than by the political utility of symbolism.

Implications of the Problem Definition
Symbolic Success Over Structural Reform
The problem’s framing as an individual moral failing has significant implications for policy outcomes. McConnell’s (2010) theory of policy success highlights how policies can succeed or fail across three realms: process, program, and politics. Division 296 shows these tensions as while politically popular to some and procedurally sound, its design risks program failure due to complexity, uncertainty, and backlash over taxing unrealised superannuation gains. By focusing on a narrow cohort of wealthy
superannuates, the policy sent a moral signal of fairness and gained public approval but overall will deliver modest fiscal outcomes, as only an estimated $2 billion annually will be collected from just 0.5% of account holders (Australian Government Department of the Treasury, 2023).

As Stone (1989) warns, causal stories simplify complexity but can limit political options. By focusing on individual behaviour, Division 296 diverts attention from institutional failures like costly financial advice and the broader tax framework that facilitate wealth concentration. This reduces the likelihood of transformative reform and risks entrenching existing inequalities under the guise of moral governance. The policy's framing risks obscuring potential negative externalities. Similar to Nixon's removal of wage and price controls, which unintentionally accelerated inflation (Thurow, in Stone, 1989), Division 296 may undermine long term investment certainty and retirement planning for a broader class of Australians. By presenting the tax as a targeted moral correction, public authorities dismissed these wider risks, portraying any opposition as a defense of inequality rather than a legitimate concern about unintended consequences.

The problem framing significantly overstates the policy's material impact; for example, the additional tax on marginal increases above $3 million is minimal, sometimes less than $500 annually, and likely outweighed by administrative and legal costs (Hand, 2025). Also the positive economic role of large superannuation funds, including their contributions to capital markets and job creation, is absent from this narrative.

Much like France’s short lived wealth tax, Division 296 may ultimately serve more symbolic than structural purposes signalling fairness without materially redistributing capital (Pichet, 2008). Ultimately, the success of the government's crafted causal story lay not in empirical sophistication but in its emotional appeal.

Behavioural Assumptions and Unintended Consequences
Problem definitions also shape the assumptions embedded in policy design. Schneider and Ingram (1993) emphasis that policies are built upon behavioural expectations of target populations. Division 296 is underpinned by the notion that wealthy retirees are passive beneficiaries of tax loopholes, rather than active economic agents capable of responding to regulatory change. This assumption is flawed, as high balance superannuation holders will likely engage in strategic financial behaviour, such as moving funds into less regulated and lower taxed vehicles or reclassifying assets. These assumptions risk unintended consequences if enacted, especially given the
unindexed $3 million threshold. This design flaw creates the risk of bracket creep, gradually drawing in retirees who were not part of the original problem definition, especially those in the upper middle income bracket. Over time, as more individuals are affected, the policy’s legitimacy may erode, potentially transforming what was intended as a symbolic act of equality into a source of resentment and political backlash. The moral framing of the policy also risks turning wealthy retirees into scapegoats without necessarily delivering redistributive outcomes, especially if revenue is directed toward non progressive uses rather than aiding the targeted group.
Finally, the framing suggests that the ultra-wealthy alone can fix inequality, an
assumption that is neither structurally guaranteed nor factually accurate.

Conclusion
In conclusion, Division 296 illustrates how governments use problem definition to pursue political advantage rather than purely reflect public concern. By framing wealthy retirees as tax avoiders, the Albanese Government transformed a narrow fiscal measure into a broader moral statement. Its real impact lies less in redistribution than in symbolic resonance with key voters. While deeper reforms may have delivered more equity, they carried greater political risk. In prioritising symbolism over substance, Division 296 risks fostering performative politics that could erode trust in future tax reform or the superannuation system as a whole.

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