Carina Garland (Chisholm, Australian Labor Party) Share this | Hansard source

So far we've had a couple of rather strange contributions from those opposite. It is disappointing, but not surprising, that those opposite have been less than wholehearted in their support for a fairer superannuation system, given that, at every turn, they have taken an approach that finds the idea of every Australian having dignity in retirement to be quite a radical idea. On this side of the House, we are the party of superannuation. It was Labor that established this system, which is the envy of the world, and, as Australians, we should all be very proud that we have such a system.

I commend the changes in the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill and the Superannuation (Building a Stronger and Fairer Super System) Imposition Bill to the House. As the Albanese government members are fond of saying, myself included, we want Australians to earn more and to keep more of what they earn. The changes here make that possible, in addition to all of the other reforms our government has implemented to make that so. I'm sure this is a statement you've heard many times in this place, and it is something that we really do mean. We build on that mission today through helping low-income workers keep more of their superannuation whilst making the system stronger, fairer and more sustainable.

We're making super fairer in a few different ways. We're doing this through boosting the low-income superannuation tax offset, LISTO, and making a number of important changes to better target superannuation concessions for large balances. We're going to increase the LISTO by $310 to $810 and raise the eligibility threshold from $37,000 to $45,000 from 1 July 2027. This will help deliver a more secure retirement for 1.3 million Australians, of whom around 60 per cent are women, with the total number of Australians eligible for LISTO increasing to 3.1 million. Something our government has been very proactive and focused on, through both of our terms of government so far, is addressing the gender pay gap and inequality, and that includes inequality in retirement. This is a really important measure to ensure that we are doing what we can to close that gap even further, in addition to a number of other changes we've already made.

The changes we're making will ensure low-income workers receive a fairer tax concession on their superannuation contributions, to align with the government's third round of tax cuts that will take effect next year, in 2027. This will benefit all workers with incomes between $28,000 and $45,000, with an average increase of $410 in the LISTO payment. These workers could receive a potential benefit at retirement of around $15,000, depending on an individual's income over their career. We know how important that compound interest is when it comes to superannuation, which is why it's important for younger generations too that these changes come into effect—so that they are not disadvantaged as they get older and so that they have the opportunity to accumulate that interest on their superannuation for their retirement.

This is real cost-of-living relief. That's what we're really focused on, on this side of the House. I do find it interesting that those opposite have played games already, in the short time we've been having this debate. When given the opportunity to ask questions in question time about the economy, they have neglected to do so, letting their constituents down, which I think is an appalling shame.

We are making these changes here today as part of our plan to help low-income workers earn more, keep more of what they earn and retire with more too, so that every single Australian can have a dignified retirement. We're also making a number of practical changes to the design and implementation of our policy, to better target superannuation concessions.

These are sensible changes which take two years of feedback into account, while still maintaining the main objectives of our policy. I'm really grateful for the feedback that I've received from my community in Chisholm, and I thank everyone who has taken the time to raise issues with me and enabled me to speak to my team here about ways that we can work through those issues and find ways to deliver reform, which is exactly what the Prime Minister and the Treasurer have done. We are a government that listens, first and foremost, and we act on the feedback we get from our community.

We're going to introduce a second threshold to better target superannuation concessions on the earnings of large balances above $10 million to make those concessions even more targeted. We're also going to index the large-balance thresholds of $3 million and $10 million, apply these changes to realised earnings and push back the start date by one year to consult on final details and prepare legislation. Again, we are a consultative government who listens to our communities. The original model that was presented was the best option identified at the time, but we have taken the decision as a government to adjust the model to recognise the views we've heard since then. It is good that Australians have a government that is responsive, that listens, that is not stubborn and that adjusts to the views and the changing circumstances of the world.

With these changes, we are continuing to deliver on our longstanding commitment—which we took to the last election—to better target superannuation concessions. Our policy to better target superannuation concessions for large balances will continue to affect less than 0.5 per cent of all Australians in 2026-27. It maintains the concessional treatment of superannuation for all taxpayers and makes superannuation tax concessions more targeted for those with large balances. These changes, along with the LISTO reform, will substantially improve the fairness and sustainability of our superannuation system.

Today's changes mean that, from 1 July 2026, the total concessional tax rate applied to earnings on balances between $3 million and $10 million will be 30 per cent. The total concessional tax rate applied to earnings on balances over $10 million will be 40 per cent. Both the $3 million and $10 million super balance thresholds will be indexed to maintain relativity with the transfer balance cap that was introduced by the coalition. As part of these changes, we will also adjust the earnings calculation so the concessional tax rates on large balances will only apply to future realised earnings. Treasury will consult on the implementation details, including the best approach to the calculation of future realised gains and attribution to individual fund members. We will apply commensurate treatment to defined benefit interests to ensure equivalent impacts, with Treasury again to consult on implementation details. We will extend the existing exemption for some judges to improve consistency across jurisdictions. This is a small change to respond to the latest legal advice and ensure more neutral treatment. We'll be providing additional support for low-income workers through LISTO, and that will cost around $435 million over the forward estimates.

The net impact on the budget of these changes is a cost of around $4.2 billion over the forward estimates, a large part of which is due to that one-year delay. In the first full year of operation—that is, 2028-29—the package will provide a saving to the budget of around $1.6 billion in net terms, including the cost of increasing the LISTO. Final costs and budget impacts will be accounted for in the 2025-26 Mid-Year Economic and Fiscal Outlook. We know that the super tax concessions at the moment cost the budget more than $55 billion per year, and we know looking forward that that will exceed the cost of the age pension as we get into the 2040s. What these reforms do is maintain the concessional treatment of superannuation, but they also ensure that that is provided in a more equitable and sustainable fashion. We know, looking at the figures, that there are 14 times as many people who will benefit from this boost that we're making to LISTO as there are people with over $3 million in super.

I'm really proud to be part of a government that continues the proud legacy of Labor in making our superannuation system stronger, fairer and more sustainable. As I mentioned at the outset, and as I've mentioned a number of times in this place, the Labor Party is the party of superannuation. It recognised the importance of every Australian having access to dignified retirement. What we're doing here is increasing the LISTO. We're better targeting superannuation concessions. That's in addition to paying superannuation on paid parental leave and introducing payday superannuation, which are going to make a real difference in the lives of so many Australians, including, I know, many in my own community. Those changes, as well, will particularly affect young people, those in insecure work and women workers. So, again, there are a number of ways that we are improving the equity in this system for all Australians. We have increased the superannuation guarantee, and we've legislated the objective for superannuation.

Australians are continuing to earn more and keep more of what they earn under our government. Now they'll be able to retire with more too. This is the latest part of our suite of reforms to make sure that we have the best superannuation system, the fairest superannuation system and the most sustainable superannuation system that we can in this country. On that, I commend this bill to the House.

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