Joe Ludwig (Queensland, Australian Labor Party) Share this | Hansard source

These measures are fully costed. Why do you not ask your Treasurer? The schoolkids bonus is a good policy. I am sorry, Acting Deputy President—I was encouraged to take that interjection. Cutting the schoolkids bonus will hit families hard. It really has not taken very long for this government to show its true colours. Whether it is cutting school funding under their Gonski backflip or cutting the schoolkids bonus, the Liberals are not the government they promised the Australian people they would be. They have come into government on a simple lie and they do not like it now.

The Australian people are seeing the real coalition government at its best—how to cut services, how to cut to the bone. The removal of the low-income superannuation contribution is a telling move from the government. It is being done despite a promise by the Prime Minister to not implement adverse changes to superannuation. The Australian superannuation model is another example of good economic orthodoxy. Helping Australians save for their retirement should be a fundamental goal of government. The MRRT repeal will increase superannuation taxes on one in three of Australia's lowest paid workers.

This is a particularly hard move by this government. The Liberal Party has always said that it is a party of lower taxes, which is arguable, but in this instance it wants to do the reverse. It said one thing to the Australian people, it got into government and it is now singing from a different song sheet. Saving for retirement is essential for individuals in the country. These savings and money invested in super funds drive investment in infrastructure in Australia. Industry Super Australia estimates that, combined with the proposed delay in increasing the superannuation guarantee to 12 per cent, the removal of this measure will reduce national savings by $53 billion by 2021-22. This is another hit to Australia's bottom line to benefit only a very small number of big mining companies. This reduction in national savings means a reduction in the viable capital for infrastructure and investment by around $5 billion, based on current industry-wide asset allocations.

This is at a time when the government is scratching around for funding streams to finance new infrastructure projects. It is there to be used. What of the effects on individuals? The government has sought to cut the super for millions of Australia's earning up to $37,000 while boosting the super for 16,000 people who have over $2 million in super balances. Shame on this government. The bill sees the government scrapping the low-income superannuation contribution, which sees the equivalent of superannuation tax—up to $500 paid by people with an income of up to $37,000—paid into the superannuation account of the taxpayer.

This measure was important for a range of reasons. For high-income earners, superannuation has tax advantages. However, for low-income earners, there are not effective incentives to encourage superannuation contributions. This measure addressed that very issue and stopped low-income earners being at a disadvantage when it comes to savings. The Financial Planning Association was clear on this point. They said that repealing this provision will disproportionately affect already disadvantaged members of Australian society and dissuade low-income earners from engaging with their superannuation.

The removal of the low-income superannuation contribution hits women particularly hard, with 2.1 million women affected. A significant proportion of these are mothers working part time while looking after young children. This is exactly the part of a woman's career where an additional $500 a year going into superannuation would be of the most benefit for building savings for their future retirement. If the government had consulted, they would have known that this measure would affect women particularly hard. If they had asked the Financial Services Council, Financial Planning Association, Industry Super Australia, ACTU or Women in Super, they would have learned of the effects of the low-income super contribution on women. When all of these groups are against your repeal, perhaps you might want to reconsider and admit when you are wrong about something. That would be a mark of a good government, but I do not think you will do that. I do not think you will be able to admit when you are wrong.

Low-income earners entered the 2013-14 financial year on the understanding that they would be refunded their super tax; part of the way through this financial year the government has changed the rules for taxpayers. A major concern in the removal of this is that it is an example of a retrospective tax measure, a fact confirmed by the Parliamentary Budget Office when it checked the coalition election costings. But that is not going to deter this government. This government seems wedded to bad policy. It has championed itself as the friend of small business, but not here. The coalition in this bill is saying, 'We don't like small business at all.' The government's legislation will increase taxes on up to 2.7 million small businesses and close the loss carry-back scheme, taking away tax breaks for up to 110,000 businesses. That is what this government is standing for.

Who is going to benefit? I think it will be a big business lobby group with no small business representation that will benefit out of this. It is also running the Commission of Audit. It is no wonder that we are seeing a tax hit on millions of small businesses, when you see a government engaged in those two processes—on the one hand, big business benefits out of this repeal; on the other hand, big business runs the Commission of Audit. It is worth looking back at the deliberative and consultative process that led to the MRRT. The MRRT legislation was based on the Policy Transition Group, which was established back in August 2010 and chaired by the former chairman of the board of BHP Billiton, Mr Don Argus. All of that has been swept aside while this government crusades on a path of transferring wealth from low-paid small businesses to the big end of town miners. That is where their interests lie. Where their interests do not lie is in ensuring fairer outcomes for small businesses, for families—which they all promised before the election— (Time expired)