Nicolette Boele (Bradfield, Independent) Share this | Hansard source

In September this year, I was privileged to be invited to participate in a panel run by Super Members Council to discuss this LISTO, the Low Income Superannuation Tax Offset. It was an excellent event with a sterling line-up of talented women. Panellists included Georgia Brumby, the Deputy CEO of Super Members Council; Jo Kowalczyk, the CEO of Women in Super; and Georgie Dent, the CEO of the Parenthood. Collectively, these women have worked for years to make the everyday lives of Australian women better. The topic for discussion on the day was the subject of this very motion: the need to reform the Low Income Superannuation Tax Offset, or LISTO.

The LISTO was introduced in 2012 and provided a payment of $500 into super for people earning less than $37,000 a year. It was designed to ensure that low-income earners don't pay more tax on their super contributions than on their take-home pay. The problem was that it had not changed since 2012, when it was introduced. The income threshold of $37,000 was out of date, and the amount of the payment itself had been devalued as a result of not keeping up with inflation. With 63 per cent of people benefiting from LISTO being women, the panel and I that day were in firm agreement that it was in need of updating. So I was pleased when the Treasurer announced in October that the government had listened and would be increasing both the amount of the LISTO and the threshold for eligibility in line with what the experts and industry had been calling for.

I was equally pleased to see the way in which the government proposed to fund the changes to LISTO. The LISTO changes, it was announced, would be paid for by tweaking the government's proposal to reduce tax concessions on earnings in superannuation accounts with balances over $3 million. Tax reform is another topic entirely—one which, although needed, successive governments have shied away from. I welcomed the announcement during the last term that the government planned to reduce tax concessions on earnings of super balances above $3 million but held concerns about some of the finer details of that proposal.

The first area of concern was that the $3 million threshold for the change to the tax concession would not be indexed. The LISTO is a perfect example of a situation where tax policy that is not indexed will soon become unfit for purpose. Within 13 years of the introduction of the LISTO—and some would probably say sooner than that—the LISTO was not operating as it was intended, and the $37,000 threshold for eligibility for additional superannuation payment needed updating. In the last term, in arguing against the need to index the $3 million threshold for super tax changes, the government said that unindexed amounts are regularly included in legislation and that it's simple to amend it when it's necessary. The crossbench's counterargument was that not only would it be simpler to index the amount from the outset but also it would ensure that the legislation remained fit for purpose year in and year out. The LISTO thresholds demonstrate the force of this argument. It has taken 13 years and much advocacy from civil society to achieve legislative change to the LISTO thresholds and make them work as intended in 2025. LISTO recipients, mainly women and those in low-paid—often shift or part time—casual work, such as those in the care industry, would have received a greater benefit for longer with indexation.

So will it be for taxpayers affected by the changes to the superannuation tax concessions for balances over $3 million. They will not have to start paying more tax sooner, because the threshold will be indexed. A secondary concern about the superannuation tax concession changes was that the changes would apply to unrealised capital gains. That was going to hurt farmers and small businesses, who quite legitimately and compliantly often hold large assets inside their superannuation and who would have been forced to pay a tax bill on assets they did not intend to liquidate during the tax year.

Again, the government listened to that concern, raised squarely by the Independents on the crossbench during the debate on the legislation, and have decided that the tax should not apply to unrealised capital gains. These LISTO changes are necessary and overdue. The retirement savings of Australians on low incomes will be boosted, the burden on government during those people's retirements will be reduced, and it's a positive change, which I welcome.

See this speech in context