Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Hansard source

in reply—I would like to thank all of the members who have taken part in the debate on the Superannuation Laws Amendment (2007 Budget Co-contribution Measure) Bill 2007. This bill will further boost superannuation savings by doubling the government superannuation co-contribution payable to low- and middle- income earners in respect of eligible contributions made in the 2005-06 year—for example, if a person was otherwise eligible for a co-contribution of $1,500 for the 2005-06 year, they will now receive an extra co-contribution of $1,500 so that the total contribution for that year would be $3,000. This rewards eligible low- to middle-income Australians who have saved for their retirement and builds on the already successful government co-contribution scheme and the significant improvements to superannuation that the government has made through the recent simplified superannuation reforms.

This government introduced the co-contribution scheme in 2003-04. It then increased the co-contribution from $1 to $1.50 in 2004-05 and raised the upper income threshold from $40,000 to $58,000. From 1 July 2007, eligibility for the co-contribution scheme will be extended to the self-employed, and the income thresholds will be indexed each year in line with growth in wages. Over 2.7 million co-contribution payments worth approximately $2 billion have already been paid under the scheme. This measure will increase payments under this scheme to $3.1 billion.

The only way that this government has been able to afford such a generous scheme to provide support to low- and middle-income earners is because it has run a successful economy. This policy would never have been contemplated by the Labor Party, because during their term in government they ran up $96 billion of debt and required $8½ billion a year to service that debt. If a government is servicing $8½ billion in interest payments each year, it could never contemplate providing support to lower income earners with this sort of policy.

The co-contribution scheme builds, as I said earlier, on the superannuation reforms that we announced in the last budget and that we have built on since that time. It will set up the next generation, those people who will be facing the threats of the ageing of the population in this nation, and it will provide people with a greater capacity to enjoy a better lifestyle in retirement. It will provide them with an opportunity also to be supported by the taxpayer, if they have not saved enough through their superannuation, through the age pension system. But this is a system which has worked well. It is only affordable because of the good economic management of the Howard government. It only remains affordable whilst the economy is well managed. The system, like most in this place, would be under threat if the Labor Party were to be returned to power, because they do not have the skills to run a trillion-dollar economy.

In closing, can I just provide by way of example two or three electorates where this has provided real outcomes to low- and middle-income earners. I will start with the wonderful electorate of Dickson in the state of Queensland. In that electorate, there are 9,537 low- and middle-income earners who stand to benefit from this measure—those people who would not otherwise have had an opportunity to accumulate and to compound this money to help them in their retirement. The second one which I think is also relevant as part of today’s debate is the electorate of the member for Griffith, where 9,849 low- and middle-income earners will benefit from the measure. In the electorate of the member for Lilley, there are 12,154 low- and middle-income earners. It should be the responsibility of the member for Lilley and the member for Griffith to explain to their respective electorates why the Labor Party would have no hope of continuing this policy in government—because they would again not be in a position economically to afford such a policy to help low- and middle-income earners retire more comfortably than they otherwise would be able to. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

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