Currently, Australian superannuation earnings are taxed at 15% and 10% for capital gains while you are in the "accumulation" phase (before you retire). When you retire you can switch up to $1.6 million of assets into pension mode and then the earnings are taxed at 0%.* The downside is that then there is a minimum payout ratio every year which increases with age. Unlike the U.S., there is actually no requirement to make any withdrawals from super. But making withdrawals is incentivized by the reduction in tax rate.
But if you have shares that pay franking credits, you can use these franking credits to offset the 10-15% tax. You might not pay any net tax on your super fund in the accumulation phase. When you switch to pension mode you will get cash refunds of the franking credits.**
Labor plans to abolish these refunds of franking credits. This means that there may actually be no net change in tax due when switching from accumulation to pension mode. The incentive to switch disappears. This means that if you have assets outside super you probably should spend them first in retirement as they are relatively highly taxed. Only if you run out of such assets, should you access your super.
* Any excess remains in accumulation mode.
** You might even get some cash refunds in accumulation mode if you have enough shares paying franked dividends.
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