Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Assistant Minister for Immigration) Share this | Hansard source

In my view, if I were to sum up what Australian workers were thinking at the moment, it would be that the income and taxation system is stacked against them. I often hear from workers that, no matter how hard they work, they feel that they just can't get ahead, and they're right. The income and taxation system in Australia is stacked against workers at the moment, and it heavily favours the wealthy. For too long, our taxation system has favoured wealthy Australians at the expense of low- to middle-income workers. You need look no further than the superannuation system to find evidence of this.

At the moment, in Australia, the wealthiest 10 per cent of income earners receive $22 billion in tax breaks by transferring their income into superannuation rather than simply paying income tax on it like the rest of Australia. But the lowest 20 per cent of income earners receive only about $800 million in tax breaks despite the fact that that population of Australians is much larger than the wealthiest 10 per cent. So the system is stacked against workers, and is it any wonder that people feel like, no matter how hard they work, they can't make ends meet and that they feel like the system is stacked against them? Because it has been for too long, and our government is going to do something about that. I want Australian workers to know that we hear them. We hear what you're suffering, and we know what you're going through. We know that the system is stacked against you. We know that it unfairly favours the wealthy at the expense of workers. That is why we are changing the system. That is what this bill, the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026, is all about. We are acting to rebalance the superannuation system unashamedly in favour of workers.

This bill is about ensuring that superannuation works for the people who need it most: the average Australian worker struggling to make ends meet. It's for the workers who keep our community functioning every day, who work hard and who struggle to pay the bills and the mortgage. It's for the tradie that's just started out—and is maybe running their own business or working for an employer—for the cost of tools, running a car and paying the rent. It's for the families who have both parents being forced to work these days, who have dauntingly sized mortgages, who are trying to get the best education for their kids, who are probably looking after elderly parents as well and who are feeling that they just can't get their heads above water. It's for the single parent who is living week to week, who is trying to do the best for their kid, who is maybe having to rely on rent assistance or family tax benefits and who is exhausted at the end of every week, with nothing left. It's for those that are nearing retirement but are being forced to continue to work beyond the normal retirement age because they simply don't have enough in their superannuation to retire on. This bill is for you.

This bill represents our government listening to your struggles and acting to make the superannuation system fairer. We'll do it in two ways. The first set of reforms in this bill enhance the low income superannuation tax offset. For too long, the settings have not kept pace with changes in wages, tax thresholds or the superannuation guarantee. As a result, hundreds of thousands of low-income workers have been missing out on the level of support the system was designed to provide.

This legislation corrects that. From 1 July 2027, the maximum LISTO payment will rise to $810. The eligibility threshold will move to $45,000. And both will automatically adjust in future, as tax thresholds and the superannuation guarantee rate evolve. These changes ensure that the tax system remains aligned with the broader tax framework and continues to deliver meaningful support, and the impact is substantial.

Around 1.3 million Australians—most of them women—will benefit from this reform. The total number of people eligible for the LISTO will grow to 3.1 million. Workers earning between $28,000 and $45,000 will see an average increase of $410 in their low income superannuation tax offset. Depending on their career earnings, this could translate to around $15,000 more in retirement savings. That's real help. That's a substantial change. It's practical and targeted, and it makes the system fairer. It rebalances the system to ensure that we're favouring workers over the wealthy.

The second reform ensures that the most generous tax concessions in the system are directed where they're intended: towards helping people save for a dignified retirement, not providing a massive tax subsidy for the wealthiest 10 per cent of Australians with extremely large balances, who are diverting their income into superannuation to avoid paying their fair share of tax. From July this year, concessional tax treatment will continue for all Australians, but the level of concession will taper for those with very high balances. Earnings linked to balances below $3 million will continue to be taxed at up to 15 per cent, but, if you've got a balance of between $3 million and $10 million, the tax rate will increase to 30 per cent. Earnings associated with balances above $10 million will be taxed at 40 per cent.

If you've got $3 million or more in your superannuation, you are indeed a wealthy Australian. You are doing well, and the system has provided a massive tax concession for you over a long period of time. But that tax concession has been at the expense of those low-paid workers who are struggling to make ends meet. It's time to rebalance the system. It's time to make sure the system is fairer. These reforms will ensure that the wealthiest Australians finally start paying their fair share of tax through that income diversion into superannuation. Both thresholds will be indexed to maintain consistency over time.

These changes affect a very, very small number of Australians—less than 0.5 per cent of the Australian population with superannuation accounts. The higher rate on balances above $10 million affects less than 0.1 per cent of Australians. Anyone would think that a reform that affects such a low proportion of Australians but has such a dramatic effect on advantaging and providing a rebalance for workers in this country would get the support of the opposition, but they'd be fooled. They'd be fooled.

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