Nick Champion (Wakefield, Australian Labor Party) Share this | Hansard source

I congratulate the member for Fadden on a fine speech on the Temporary Residents’ Superannuation Legislation Amendment Bill 2008 and the Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2008. It is rare that we hear him say nice words about a Labor government, so it is a good day. Superannuation certainly is the lasting legacy of the Hawke Labor government. As I told the House in my maiden speech, I think it is Labor’s greatest postwar economic and social achievement.

Superannuation is the mechanism to deliver one of the great objectives of a social democracy—that is, the dignity of older Australians. It ensures that in retirement every Australian can live with greater independence, financial security and dignity. Importantly, it also increases our national savings. Having that pool of national savings is terribly important in this world at a time when we are all too aware that capital is fickle and mobile. But the system is not perfect. It does need periodic adjustment to make sure that it is efficient, effective and fair. The bills before the House today represent one such adjustment.

A problem in our system across the board is that too many people have too many accounts and that all too often money gets lost or forgotten and ends up being eaten up by fees. The problem of lost accounts particularly affects people who have worked in Australia on temporary resident visas. These bills reform the laws regulating how departed temporary residents can access their superannuation accounts and how they are taxed. Under these measures, departed temporary residents—and there were over 240,000 of them in the last financial year—will retain the ability to claim their superannuation benefits through the existing payment process before those superannuation payments are designated as unclaimed. These provisions simply introduce a reasonable time limit before the accounts are reclaimed by the government to ensure that the money is not lost over time to account fees and charges and is instead put to good use.

It is expected that such a change will result in $250 million in new revenue that would otherwise sit for years in unclaimed accounts. That is a very considerable sum of money. That amount will rise in 2009-10 to some $378 million and later down the track it will get back down to around $250 million. That is money that can be put to good use in our schools and hospitals, for our roads and for employing public servants and others to do good works for the Australian people.

The provisions reflect a political consensus on the issue, as the previous government proposed substantially similar changes late last year. It is good to see an outbreak of bipartisanship in this House. These rules provide for consistent and better treatment of temporary residents when compared to that that applies in many other countries where often they are unable to access superannuation contributions upon departure. The Australian system is fair to these people, but these bills make sure that the money is not lost.

The changes will operate through cooperation between the Department of Immigration and Citizenship and the Australian Taxation Office. DIAC will provide information to the ATO to assist the ATO to identify departed temporary residents who have left unclaimed superannuation in our system. This is a simple, straightforward and fair change so that, if departed residents snooze on their super, the whole community will not lose. This makes sure that if those people do not take care of their superannuation then the government can put it to good use.

These bills will also amend the departing Australia superannuation withholding tax, which currently applies to amounts of super claimed by departed temporary residents. The purpose of the tax is to ensure that our superannuation system and tax concessions on it are targeted to support people who retire in Australia. Those tax concessions should not be extended to those who work in Australia and then go home to foreign countries. The amendments contained in these bills increase by five per cent the departing tax and recoup the taxation concessions provided as part of our superannuation system. Importantly, departed temporary residents will be able to claim indefinitely their superannuation benefits less this departing tax back from the ATO.

The bills are sensible and fair. They ensure that our superannuation system is geared to supporting Australians. They give temporary residents who work in our country some opportunity to benefit as well. They ensure that this money does not just disappear and go to waste on account fees. They ensure that those who contribute to our world-leading superannuation system have access to their contributions. I commend the bills to the House.

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