Chris Trevor (Flynn, Australian Labor Party) Share this | Hansard source

I rise to support the government’s Temporary Residents’ Superannuation Legislation Amendment Bill 2008 and Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2008. The Temporary Residents’ Superannuation Legislation Amendment Bill 2008 implements the government’s measure to help reduce the number of lost accounts and unclaimed money in the superannuation system which can arise when temporary residents depart Australia without taking their superannuation with them. The Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2008 forms part of the government’s temporary residents superannuation measure. Under this arrangement, temporary residents leaving Australia will be able to claim their superannuation benefits through existing avenues before it becomes unclaimed. This allows for a more consistent approach and for a better service to temporary residents compared to that of other countries.

The departing Australia superannuation withholding tax currently applies to amounts claimed by departed temporary residents. The tax aims to ensure that tax concessions provided to superannuation are appropriately aimed at those who wish to retire in Australia. The amendments make a small increase to the departing Australia superannuation withholding tax rate of some five per cent. As Councillor Paul Bell AM, President of the Local Government Association of Queensland, said:

… Queensland is attracting an increasing number of skilled migrants from across Australia and the world. Many migrants are now settling in regional and rural communities.

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Over the last decade Queensland has witnessed sustained economic growth and has received increasing numbers of migrants from interstate and overseas. Queensland continues to attract the most overseas migrants after Victoria and NSW …

This increase in overall migration to Queensland has included increased skilled migration to rural and regional Queensland. The main conduit for migration to regional and rural areas has been the state specific and regional migration incentives implemented by the federal government. Since 1995, when the Regional Sponsored Migration Scheme was first introduced, there have been a plethora of initiatives and visa categories to encourage migrants to live and work in rural and regional areas of Australia—particularly Central Queensland, due to the resource boom the area is currently experiencing. Regional migration programs aim to address the skills shortages faced by a number of rural and regional areas and to encourage the economic and demographic growth of rural and regional Australia.

It is widely acknowledged that both permanent and temporary skilled migration deliver significant economic benefits to the host country. These economic benefits are particularly critical in rural and regional areas, whether they are undergoing population decline or mining booms. The key theme in Australia’s recent migration policies has been the economic benefits of migration and skilled migration in particular. The focus on the economic benefits of skilled migration has been shaped by a number of realities facing developed nations such as Australia, including ageing populations, globalisation of labour markets and skills shortages.

There have been a number of programs run by various organisations in my electorate of Flynn to encourage temporary residents to the area, especially in Longreach and Gladstone. Much of the good work in Longreach has been led by the Remote Area Planning and Development Board, which has sought funding to develop a number of projects to assist the members of communities of its regional council members to work together to attract and support new arrivals. RAPAD has set up a regional marketing plan and, to better understand the experiences of new migrants to the area, a migrant reference group. The group will shed light on what worked for them when they arrived and what could be improved, including: raising an understanding and awareness of the challenges for new migrants in rural and remote areas; establishing an information migrant network within the region to provide guidance and information that will support skilled migration and settlement activities; raising an understanding and awareness of the benefits of skilled migration; and providing resources and information about improving the attractiveness of the region to potential migrants.

The Longreach Regional Council engages with the cultural diversity of the local area. Employers in Longreach are actively engaged in supporting new arrivals. This support starts from the time they contact the prospective employee overseas and follows through their arrival and settlement in the community. Longreach council itself employs skilled migrants and is very supportive in providing employment and settlement support to its community. Another such program is managed by Gladstone Area Promotion and Development Ltd. The charter of GAPDL is to promote the Gladstone region as a great place to live in, invest in and visit—and so it is. It is our business to ensure we promote strong growth and development within the region.

A shortage of skills has long been perceived as one of the most serious issues currently facing the Gladstone region’s business and industry. A lack of available personnel with the right skills may threaten the economic viability and growth of our region. Whilst this is also a state and national issue, the shortage of skills may particularly affect this region due to its high concentration of industry and remoteness from a capital city. In a climate of strong industrial growth the service dollar leaks out of the region due to a shortage of tradesmen and professionals, and small to medium businesses have difficulty recruiting people with the skills they require. For example, a skills survey launched by GAPDL recently confirmed what many of us living in the electorate have been aware of for some time: we definitely do have a skills shortage which is impacting in particular on the small to medium business sector. Seventy-four per cent of local businesses reported having difficulty attracting skilled employees, and nearly half of them found it nearly impossible to do so.

The Make the Move strategy is an initiative of GAPDL to attract investment and skills to the Gladstone region that will benefit businesses, community organisations and the broader community in general. The strategy’s core focus is to promote the region to potential new residents and employees through a range of publications and services that will make the move to the Gladstone region a positive experience for work and play. This approach works on the premise that initiatives relating to both raising the skills of our existing workforce, especially young people, and attracting skilled people from outside the region as employees or business operators are likely to be of benefit in increasing our region’s skills base, supporting our youth and building our economy and, consequently, our nation.

While temporary residents, including thousands who have worked in Central Queensland, depart Australia, they are able to take their superannuation with them as a departing Australia superannuation payment, but many do not do so. This contributes to the total amount of lost moneys in the system. Individuals who hold an eligible temporary resident visa are currently able to access their superannuation benefits early, prior to reaching preservation age, if their visa has been cancelled or has expired and they have departed Australia, by applying for a departing Australia superannuation payment. The DASP is subject to a final withholding tax to recoup the tax concessions provided to the superannuation of temporary residents.

Despite having the ability to claim their superannuation, many temporary residents do not do so and leave amounts of small and lost balances in the superannuation system, thereby contributing to the total amount of lost moneys in the system. Currently, the Superannuation (Unclaimed Money and Lost Members) Act requires superannuation providers to report and pay the superannuation of a member to the Commissioner of Taxation as unclaimed money where certain conditions relating to the member are met. Broadly speaking, unclaimed money is money which the superannuation provider holds in respect of members who have reached the eligibility age of 65 or died and the provider is unable to contact the person entitled to receive it.

The government is concerned by the growing amount of superannuation which has been identified as lost over the past decade. The tax office’s 2006-07 annual report shows that the number of superannuation accounts reported on the lost members register grew from 5.7 million to 6.1 million in that income year. These inactive accounts total approximately $12 billion in assets. The amendments contained in this bill seek to address the lost account problem by requiring superannuation funds to pay the unclaimed superannuation of departed temporary residents to the tax office. The government has consulted on the measure by releasing a discussion paper in May of this year and engaging in consultation with key stakeholders on the draft legislation. The government’s final policy reflects many of the suggestions made during the consultation process.

The amendments provide that the superannuation of a temporary resident will effectively become unclaimed and payable to the tax office after the individual has ceased to be the holder of a temporary visa—that is to say, their temporary visa has been cancelled or has expired—and they have departed Australia and at least six months has passed and they have not claimed their superannuation. Departed temporary residents will retain the ability to claim their superannuation benefits through the existing departing Australia superannuation payment process before it becomes unclaimed.

Departed temporary residents who have not claimed their superannuation and have unclaimed superannuation paid to the tax office can claim their money back at any time. The individual can apply to the Taxation Office for the amount to be paid to them or to be transferred to a super fund in certain circumstances. This provides consistent or better treatment of temporary residents compared to that in many other countries, where temporary residents may be unable to access or are limited in accessing compulsory social security contributions. Generally, the amount that is claimed back from the tax office will be subject to the departing Australia superannuation payment withholding tax. This is consistent with existing arrangements, as the withholding tax already applies when a temporary resident claims their superannuation after departing Australia.

This measure will be administered by the Department of Immigration and Citizenship and the Taxation Office. The Department of Immigration and Citizenship will provide the tax office with information to assist the tax office in identifying departed temporary residents who have left unclaimed superannuation behind. The tax office will then issue notices to super funds identifying departed temporary residents. Funds which receive such notices will be required to report and pay any unclaimed superannuation they hold for a departed temporary resident to the tax office by a certain day. The first notices are proposed to be issued in March 2009, requesting payments from funds by April 2009. In the future, it is proposed that the tax office will issue notices at least twice a year. The tax office will also have the ability to revoke a notice it has sent to a fund where it is appropriate in the circumstances to do so—for instance, if the individual returned to Australia on a new temporary visa prior to the six months elapsing.

The superannuation of Australian and New Zealand citizens, current holders of permanent or temporary visas and those applying for permanent residency will not be paid to the tax office. Instead, their superannuation will remain in a super fund. Certain types of temporary visas can also be prescribed in the regulations to be excluded from the measure if it is appropriate in the circumstances to do so and to cater appropriately to any specific visa classes. For instance, retirement visa holders will be excluded from the measure so that their superannuation will remain in the fund and not be paid to the tax office.

At this stage, state and territory public sector funds will not be captured by the measure, although the Commonwealth will enter into discussions with state and territory governments to examine the scope to include such schemes in the future. The tax office will have the ability to refund overpayments that have been wrongly made by super funds. Individuals will also have review rights. This measure will commence from a date to be fixed by proclamation. This will occur in sufficient time for the tax office to send the first notices out to funds in March 2009 and to receive payments of unclaimed superannuation from funds in April 2009. I do congratulate the Rudd Labor government for its leadership on this issue and I commend these bills to the House.

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