House debates

Thursday, 8 September 2022

Bills

Treasury Laws Amendment (2022 Measures No. 2) Bill 2022; Second Reading

12:34 pm

Photo of James StevensJames Stevens (Sturt, Liberal Party) Share this | Hansard source

I rise to support this excellent implementation of the former Morrison government's suite of important policies, including in particular the adjustment to the eligibility for the downsizer contribution to superannuation. I note that there is an amendment from the Greens condemning this and anything else that puts money back into the pockets of hardworking Australians. I appreciate this opportunity to prosecute their position on these things for my electorate of Sturt. It would horrify them to think that it's the position of a party like the Greens to reverse and take away Australians' hard-earned savings in the case of super or hard-earned money from the point of view of an appropriate regime of income tax rates that don't punish unfairly people who are damn hard workers and deserve as much of their money in their own pockets as they can have.

On downsizing: this is a really significant reform—dropping the eligibility age to 55. I was thrilled when this was announced during the election campaign by former Prime Minister Morrison. I'm happy enough, obviously—and like many other things that they said—that a few minutes later Labor said they'd do the same thing and 'me too-ed' the policy. So now we're here implementing it. It will be transformative for the retirement planning for so many of my constituents in the seat of Sturt and, frankly, for so many Australians nationwide.

It allows people to plan with so much more certainty for their financial security in retirement. It's a very big decision to make, and a lot of people plan many years in advance as to how they are going to make sure they have provisioned enough to support themselves in what should be a very relaxing and non-financially stressful retirement. I also wish anyone going into retirement many, many years of it. Self-funded retirees are the great economic heroes of this nation. Again, as I always do on legislation relating to self-funded retirees, I want to thank them so very much for what they do to make provision for their retirement and the costs of that retirement. By doing that, they take an enormous burden off the Commonwealth government—all government, frankly—because they fund the cost of their own retirement. If they didn't, of course we would do so through the aged pension and the other supports that are put in place for all Australians, who absolutely deserve it if they're not in a position to make provision for their own financial requirements in retirement. But those who are self-funded retirees do so much to take the burden off the taxpayer and allow us to invest more money in so many other services that are good for all Australians. So thank you to them.

Reducing the age to 55 allows a lot more people to start to make provision—potentially, to sell a large family home—much sooner than they would have if they were waiting for eligibility for this important tax concession. We can think of a couple who own a family home which isn't necessarily the home they need once their children have moved out. It probably has a large amount of value in it. From the age of 55 that couple can sell the home and put $300,000 each into their superannuation without it being taxed on the way in. There's an enormous incentive there to do that, of course. That puts people in a position to do that from the age of 55, well in advance of when they might ultimately retire and start to call upon their superannuation.

There's an enormous peace of mind in undertaking that transaction, getting it done and putting the money into super, and, equally, in being able to move into a different home that's more appropriate for the stage of life that you're moving into and to meet the costs of doing so. Everyone has moved home and we all know there's a lot of cost in moving from one home to another. Even if you're downsizing, there's a lot to get organised and arranged, and there are always unforeseen or unexpected costs in doing that. A lot of people would feel much more comfortable doing that while they're still in the workforce and while they're still earning a salary or wage.

Now, through this measure, they can effectively undertake that process from the age of 55: square away those arrangements, put money into their superannuation and, therefore, reassess their superannuation and the amount that they have in it. They can have a new home that they'll probably intend to spend the balance of their retirement in. They can settle all that down and meet all the costs of that transaction, of that relocation and of purchasing a new property and of provisioning for themselves by putting those funds into superannuation. They can settle their affairs while in the comfort of still being well and truly in the workforce and earning an income, not while staring down the barrel of a very imminent retirement and the uncertainty of whether or not they'll get the value they're hoping to for the property they sell and whether the new property they want to move into will cost what they thought it would, with all the various taxes and charges that state governments in particular put on those selling one home and moving into another.

The other benefit of this, of course, is that it will encourage people to sell dwellings that were appropriate for a family—a family they might no longer have, if their kids have grown up and moved on, though there is another whole problem around that that isn't worth getting into in this debate—but will be less appropriate for the next stage of their life as they approach retirement. This will—I hope, as I'm sure everyone hopes, which is why the government said 'Me too' to the policy that we announced—increase the supply of family homes in the marketplace. That should help young families—who are at a very different stage in their life and in the economic cycle, with having and raising children, et cetera—by making it easier for them to purchase an appropriate family home, because more of the people who have a family home but don't need it anymore will be making the choice to sell that family home, having been encouraged to do so by this measure and this tax concession. I hope, as I'm sure we all hope, this will increase the supply of family homes in the marketplace.

Another enormous challenge we've got at the moment is around housing affordability. There is a particular challenge for people looking to transition from what may have been the first home they purchased—if they have been lucky enough to even get into the property market, which is just an ever-increasing challenge. Recent increases in interest rates have only made that challenge harder still.

So I hope this measure helps those people who, having bought their first home, now find that that home, which was appropriate for them at a certain stage of life, is no longer appropriate. If they partnered up and bought their first home together as a couple but were not then at the stage of having children, by now they may be looking to have children or may already have young children and find that that home is not perfectly suited to the needs of a young and growing family.

People who've reached the age of 55 will, in many cases, have exactly that type of home. They probably will have spent the last couple of decades raising their own family in that home but now may be in a position where they don't need that particular type of property anymore. These very sensible tax incentives will encourage them to downsize from that property and have the benefits of doing so and of putting a significant contribution into super. They may do this individually or as a couple—both, of course, will get the opportunity. Then I think we could have the good outcome of helping younger people to get into family homes.

Now, this is obviously completely voluntary. My parents, funnily enough, are in this circumstance themselves. They certainly are not downsizing their property! They're very happy staying in a larger family home. It is, of course, absolutely their right to do so. All we are doing here is providing the opportunity and an enhanced incentive to downsize, for those who choose to, through avoiding taxation on the proceeds of selling that property, up to the amount of $300,000, by contributing it to super. That obviously means they're downsizing, because they will have sold their property, and, if they take advantage of this, they will have less money left over—having contributed up to $300,000 into their superannuation—to go towards the property that they're buying to replace the one that they've sold. I think the outcome is self-evident there. It's going to be an excellent opportunity for people to plan and provision for their retirement.

There are a couple of other measures that emanate from the previous government in this TLAB No. 2 bill—others have probably commented on that—in particular around being a lot more flexible with small businesses around honest mistakes they might make in the way in which they manage their business accounts, which might lead to them inadvertently misrecording and therefore misreporting certain things to the ATO. I am absolutely pleased this new government is continuing with the position of the previous government to not be too heavy-handed with people when they have probably made some genuine and honest mistakes. It's a bit like community service instead of being sent straight to jail where, frankly, the circumstance most probably is that they haven't meant to make a bookkeeping error. It's not something we will condone into the future, but one option is they undertake appropriate training to understand why they have made certain mistakes in the accounts of the business, and they won't get a second chance if, having done that, they make the same mistakes again in the future. I think that's eminently sensible.

I'm particularly pleased, as I've made clear, that we're here to give an opportunity for much greater security for people planning their retirement. I thank the millions of Australians, a growing cohort, who are provisioning for their own retirement. I've made the point as to how much of a significant economic contribution that is and how much of a significant budgetary contribution it is particularly to the Commonwealth budget. This is one thing we can do to help them feel more secure in their retirement. I think it'll also lead to more people being self-funded retirees and taking a further financial burden off the Commonwealth payments that are made. That is in no way any criticism of people who do need and should always have the support of us to have the aged pension and other government supports in retirement, but, clearly, where people can afford to support their own retirement that is of significant help to the Commonwealth. This is one very good opportunity we have to help those people who help us in that way. I commend the bill to the House.

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