Justine Elliot (Richmond, Australian Labor Party) Share this | Hansard source

I too rise to speak in support of the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026. Superannuation is one of the most significant social and economic reforms in modern Australian history. It reflects a simple but powerful idea: that working people deserve dignity, security and independence in retirement. The reforms in this bill are about making our super system even stronger and more sustainable. They're about ensuring that lower income workers receive a fairer tax concession and addressing imbalances in the distribution of tax concessions that have emerged over time.

Of course, the Labor Party has a very long and proud history of creating, strengthening and defending our superannuation system. For most of the past century, superannuation was limited to public servants, members of the military and some white-collar employees. Most workers—particularly women, blue-collar workers and casual employees—retired with no savings, and they had to rely purely on the age pension. It was a Labor government that began the transformation of the system in the 1980s. The Prices and Incomes Accord embedded superannuation into industrial awards and dramatically expanded its coverage. It was a Labor government that continued this work in the 1990s by legislating the superannuation guarantee that required employers to contribute a set percentage of an employee's ordinary earnings into superannuation funds.

The reforms were good for not just workers but the entire economy. Former prime minister Paul Keating, the architect of our super system, said:

Superannuation, like Medicare, is now an Australian community standard, binding the whole population as a national economic family, with each person having a place.

Before the reforms, Australia had low national savings and relied very heavily on foreign capital. Compulsory super built a vast pool of domestic savings that would eventually underpin infrastructure investment, business growth and financial stability. Today, Australia's super pool is worth more than $4.5 trillion. It's one of the largest pension systems in the world relative to GDP. Labor governments continue to shape the system by legislating a gradual increase in the superannuation guarantee from nine per cent to 12 per cent, introducing MySuper to provide low-cost default products, strengthening governance rules and improving fairness for low-income earners.

The Albanese Labor government continues to build on this proud Labor legacy. Our government supported and completed the staged increases to super contributions, which reached 12 per cent in July 2025, and we made one of the most significant reforms to the super system with the decision to pay superannuation on Commonwealth paid parental leave. This reform recognised caregiving as an economic participation and helped reduce the long-term retirement penalty faced disproportionately by women. That change was great for families and great for the economy as well. In 2023, for the first time, our government legislated a formal objective for superannuation: to preserve savings to deliver income for a dignified retirement, alongside the age pension, in an equitable and sustainable way. Embedding this objective in law provides policy clarity and stability. It ensures that any future changes align with the core purpose of the system.

From July this year, the payday super reforms legislated by our government will come into effect. This means employers will be required to pay super at the same time as wages instead of quarterly contributions. For workers, this reduces unpaid super risks. It also means their money doesn't sit unpaid for up to three months before it starts earning investment returns. Even small delays reduce long-term growth, so receiving super contributions earlier can add thousands of dollars to a worker's retirement balance over their lifetime. This is particularly important for younger workers and those in casual or part-time jobs. Our government extended the annual performance test beyond MySuper products to also include trustee directed products, which increased coverage from about 80 products to 800. We've aligned the financial reporting requirements of funds with those of public companies to ensure that fund members have better access to more meaningful and detailed information.

These reforms also mean less onerous reporting for funds, with greater clarity about requirements and the removal of duplication. We've also announced mandatory service standards for super trustees, and we're reforming the retirement phase of superannuation as well. Over the next decade, more than 2.5 million Australians are expected to retire, and the Albanese Labor government has committed to uplifting the retirement phase of superannuation to ensure that Australians retire with the right information and strategies to help them make the most of their superannuation. Now, with the reforms in this bill, our government is making the superannuation system more equitable and more sustainable.

This bill delivers on two key priorities. Firstly, it boosts support for low-income earners. Secondly, it makes tax concessions fairer and better targeted. On this first priority, we're boosting support for low-income earners by increasing the low-income superannuation tax offset, LISTO. This will mean a fairer tax concession on super contributions for low-income workers. The reforms in this bill mean that, from July next year, we'll increase the maximum LISTO payment from $310 to $810. We'll also raise the income eligibility threshold from $37,000 to $45,000. These changes will increase the total number of Australians eligible for LISTO to 3.1 million people. What a difference it'll make to them, and 3.1 million Australians—the majority of them being women—will have a more financially secure retirement.

For many disability and aged-care workers, retail and hospitality staff, early childhood educators and nurses, these reforms will ensure they get the secure retirement they need, they've earned and they deserve. All workers with incomes between $28,000 and $45,000 will benefit from these changes. With an average increase in LISTO payments of $410, these workers could receive a benefit retirement of about $15,000, depending upon their income over the course of their career. The purpose of LISTO is to ensure individuals that earn up to a defined income threshold do not pay more tax on their superannuation contributions than they would have paid on their wages. In other words, it protects low-income workers from paying a higher effective tax rate simply because their earnings are directed into compulsory superannuation.

The reforms in this bill strengthen that mechanism. They ensure that the LISTO eligibility threshold maximum payment amount will automatically adjust in line with any future changes to income tax thresholds and superannuation guarantee rates. With the third round of tax cuts taking effect in 2027, this will ensure that low-income workers will receive a fairer tax concession on their super contributions to align with these changes. On that second priority, we're making tax concessions fairer so they're better targeted for larger super balances. For individuals with total superannuation balances above $3 million, existing super tax concessions will be reduced on amounts over that threshold.

This reform will take effect from July this year and impacts less than half a per cent of all Australians. Right now, all super balances earn investment returns that are taxed at a concessional rate of 15 per cent before retirement and tax-free after retirement. Under these reforms, for super balances between $3 million and $10 million, the tax will increase from 15 per cent to 30 per cent for the portion of the balance above $3 million. For super balances above $10 million, the concessional rate will be 40 per cent. Both the $3 million and the $10 million thresholds will be indexed to ensure that these higher rates continue to apply only to those individuals who have very large balances. Regardless of the $3 million and $10 million thresholds, earnings will remain tax-free in the retirement phase.

Superannuation tax concessions are provided to encourage saving for retirement. They're not intended to provide indefinite, heavily subsidised wealth-accumulation vehicles for individuals who have extremely large balances. Without periodic recalibration, the cost of concessions on very large balances will continue to grow disproportionately, and of course this cost is borne by all taxpayers. This bill introduces a measured recalibration. The reforms in this bill ensure that the concessional treatment of superannuation will remain the same, but it will be provided in a fairer and more sustainable way. Targeting concessions for the biggest balances helps fund more super for those with the smallest balances. A stronger and more sustainable superannuation system, more super for low-income earners, keeping more of what you earn and retiring with more as well—that's essentially what all of these reforms are about.

This bill strikes a careful balance. It preserves strong incentives to save. It maintains concessional treatment across the system. It introduces indexation arrangements to protect real thresholds over time. Importantly, the additional tax applies prospectively to earnings after commencement. It does not re-tax past contributions. It does not unwind existing arrangements. It is forward looking.

The Australian Labor Party built our superannuation system, and successive Labor governments introduced reforms to ensure that the system remains fit for purpose. The Albanese Labor government has introduced significant reforms to improve the system and has enshrined the principles of equity and sustainability of the superannuation system in legislation. The reforms in this bill will build on that very proud legacy. Public confidence in our superannuation depends on fairness. Workers must be confident that the system is designed to support retirement securely for all, not to disproportionately benefit those who are already at the very top. Our superannuation system represents a shared national investment in dignity and security in retirement, and that's why our government is committed to protecting the long-term integrity of Australia's retirement income framework.

Superannuation has reduced future pension pressure. It has increased household wealth. It has deepened capital markets. And it has given millions of Australians a tangible stake in our nation's prosperity. Superannuation is one of Australia's most important public policy achievements. That's why it's so important for us to confront any imbalances in the system when they do arise, and that's exactly what this bill does. It strengthens support where it's most needed. It moderates concessions where they are least justified. It modernises the system whilst respecting its very foundations. It's measured, targeted and principled. This bill ensures that the system remains strong, fair and sustainable for generations to come. I commend the bill to the House.

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