Steven Ciobo (Moncrieff, Liberal Party) Share this | Hansard source

I am very pleased to add my support to the Superannuation Laws Amendment (2007 Budget Co-contribution Measure) Bill 2007 and to address the previous speaker’s comments. This is an important bill. It is one day after the introduction of the budget and the government is already delivering on its promises. Last evening the Treasurer spoke of the importance of making sure that younger generations of Australians in particular are incentivised to provide for their retirement. We know that we have an ageing population in Australia. We know in Australia, as in many other Western democracies around the world, that those aged 65 and over will represent an increasingly larger percentage of our total population base. One of the most fundamental things that the government can do to address the ageing of the population is to ensure that, as much as possible, it encourages Australians to provide for their retirement.

One key way in which the Howard government and particularly the Treasurer, Peter Costello, have done this is through the government’s co-contribution scheme for superannuation contributions. Australia is regarded as having one of the finest superannuation and savings systems in the world. I am even happy to pay credit to the Australian Labor Party for the introduction of compulsory superannuation. They had the idea and it was supported by us when we were in opposition. The coalition supported the idea because we saw it as a beneficial reform. So I am happy to acknowledge that the Australian Labor Party started this process.

What we have in Australia is a situation whereby we have been facilitating, over a number of years now, the increasing transfer of wealth into people’s retirement savings accounts in the form of superannuation. And that is a very good thing because, as the population ages, we will increasingly see the need for Australians to draw down, in terms of an annuity, a lump sum payment or something like that—either of the two or some combination thereof—their retirement savings. The simple fact is that, with an ageing population, the more we can encourage people to provide for their retirement, the better off the nation will be. The co-contribution is one very meaningful and important initiative of this government that has helped to facilitate people to place money into their retirement savings accounts to provide for their retirements so that they are not all drawing on the public purse.

What we know is that, as the Australian population ages, and as the percentage of those aged 65 and over grows, there will become a bigger draw-down on the public purse. And with more people moving into retirement, and more people drawing down on the public purse, there will be fewer people in the labour force who will be paying the taxes that will be used to fund the draw-down. That really, in essence, is the reason we need to incentivise and encourage people to provide for their retirements.

The co-contribution—as I mentioned, an initiative of Peter Costello and this government—is particularly targeted at rewarding the effort of lower and middle income Australians in providing for their retirements. We did say that we took the initiative to introduce the co-contribution because we particularly wanted those on lower and middle incomes to make sure that they are also recognising the power of compound interest and recognising the power that comes from them providing for their retirements in a more meaningful way. Certainly, a nine per cent contribution, at the minium level, is a start, but it is not enough.

Mr Deputy Speaker Somlyay, I acknowledge that you and I sit on the House of Representatives Economics Committee, which undertook an inquiry into the superannuation savings of generations X and Y. As I am sure you would be aware, Mr Deputy Speaker, we found that there does need to be incentive. A payment like this is particularly important as well for women, because a large number of Australian women transition into and out of the Australian workforce. Particularly at those times when, for example, many would choose to stay at home to raise a family and not be in paid employment, the co-contribution does play an important role in helping to boost the superannuation savings—especially for women, for example, who may be undertaking part-time work. It is for that reason that this is a very good initiative and one that I am very pleased to support.

The bill that is moving through the House this evening, which I am certain will be passed given that the opposition is also supporting it, recognising it to be a very good decision by this government—I am sure that is why the opposition is supporting it—will ensure that we top up superannuation savings that are being made. So, for those people who have already made a voluntary contribution to their superannuation, and received a $1,500 top-up from the Australian government, this bill will ensure that they receive an additional $1,500 on top of that again. That means that, for the $1,000 they have invested, they are receiving a $3,000 top-up from the Australian government. That clearly is an incentive to make voluntary contributions. It is that simple: if you receive a return of three to one then that is an incentive to be doing what you are doing. Whether it is prospective or retrospective is really neither here nor there. The fact is that those who have taken advantage of the co-contribution stand to gain the most. This additional $1,500 top-up that can be received will go a long way to ensuring that there is more money in the accounts of those Australians, especially lower and middle income earning Australians, who have made the decision to voluntarily make contributions towards their superannuation. This comes at a cost of some $1.1 billion. That is for the time frame specified, which was for the last financial year.

I listened with great interest to the Australian Labor Party, because what I heard from the shadow parliamentary secretary was that in fact more should have been done. I heard the shadow parliamentary secretary. Basically, if you read between the lines of what he said, his statement was that this is a good idea, and that is why the Australian Labor Party is supporting it, but we should have made it prospective, we should be ensuring that it is a three to one contribution for all the years in the forward estimates. This is again the problem that we have with the Australian Labor Party. We recognise that this is a good contribution. We recognise that it creates incentive. That is why the Australian Labor Party says there should be even more of it. But the problem we have as a government is that we are fiscally disciplined. If there is one fault that we have as a government it is that we are fiscally disciplined and we make tough decisions about what is good, what is achievable, what is affordable and what is sustainable. This $1.1 billion that the government is pouring in to help these lower and middle income earning Australians will pay big dividends for those people, especially those at the lower end of the age spectrum, who have made contributions—big dividends indeed, when it comes to their retirements.

The Australian Labor Party, I take it from the comments of the shadow parliamentary secretary, is obviously of the view that its policy will be for there to be a three-to-one ratio going forward. I take it that is the Labor Party’s position. I take it that the Labor Party’s position—perhaps the policy that is being announced by Labor—is for there to be a three-to-one contribution from this point forward. I look forward, if that is what the Labor Party is going to do, to seeing that announcement. But I suspect that that is not actually the Labor Party’s policy. It is just another case, like the hollow drum beating, of the Australian Labor Party banging on and basically saying that we should have done more. We have done a lot—we have now tipped in another $1.1 billion—but the Labor Party still says, ‘You should’ve done more.’ I look forward to seeing the Labor Party’s announcement of policy. I look forward to hearing that the Labor Party’s co-contribution will in fact be $3 on a prospective basis. I am sure many people would be interested in a policy like that. It is just a case, of course, of these things being costed.

I am proud to be part of a government that has done more for Australian superannuation than any other government. And it is not just the co-contribution that I am referring to now; it is the fact that this government, in last year’s budget, introduced the simplified superannuation reforms. These simplified superannuation reforms, which the Australian Labor Party took nearly six months to agree to, will make a very big difference. The abolition of tax on withdrawals from a superannuation fund means so much to Australians that it is extraordinary to think that the Australian Labor Party would have taken nearly six months to agree.

I note that the Assistant Treasurer is walking into the chamber. I know he worked tirelessly for months to try to get the Australian Labor Party on board with this government’s reforms. I know the Assistant Treasurer kept as much pressure as he possibly could on the Australian Labor Party, who dragged their feet every step of the way before finally, after about six months, agreeing to support this government’s very sound, reasonable, wise and sustainable reforms that made superannuation exceptionally simplified and, most importantly, delivered in spades to the Australian people.

I have to say that for my constituents on the Gold Coast the simplified superannuation reforms were welcomed with open arms. They knew these were vital reforms. They welcomed them. It was music to their ears, as this government provided further incentives for Australians to ensure that they provided for their superannuation. Like many of my constituents I was very disappointed that the Australian Labor Party took six months to agree to these very sound proposals. I am very pleased that they may have learned a lesson from that. And I am pleased that within a day of the budget being announced they are now on board with this additional co-contribution that the government has announced. I commend the bill to the House in a resounding way.

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