Treasurer defends $4b hit from super tax backdown

A $4 billion budget hole created by an overhaul of the government's contentious super tax policy will be filled using other measures, the treasurer says.

Labor is defending major changes to its planned superannuation tax hike, which will see the wealthiest retirees slugged with a higher tax rate and more relief given to low-income earners.

The government's now-dumped plan was to double the concessional tax rate on any earnings - including unrealised or "paper" gains - from account balances above $3 million to 30 per cent.

Instead, the higher rate will only apply to realised earnings and the $3 million threshold will be indexed to inflation if Treasurer Jim Chalmers' updated model passes parliament.

A second tax rate of 40 per cent will apply for earnings from superannuation account bal