Basem Abdo (Calwell, Australian Labor Party) Share this | Hansard source

There are moments in this parliament when legislation is technical, and there are moments when legislation speaks directly to the kind of country we want Australia to be. This is one of those moments, designed to build a stronger and fairer super system because superannuation is not just a policy instrument; it is one of the most powerful, democratising economic reforms in Australian history. It is the reason millions of Australians retire with dignity instead of dependence. It is the reason working people—nurses, teachers, tradies, warehouse workers, small-business employees—collectively own a stake in this nation's economic future.

Superannuation is deferred wages. It is not a gift. It is not largesse. It is earned pay slip by pay slip and preserved for retirement. Because of that, this parliament has a responsibility to ensure that the system remains fair, sustainable and true to its purpose. That is exactly what these bills do. This parliament is legislating the objective of superannuation: to preserve savings to deliver income for a dignified retirement alongside government support in an equitable and sustainable way. This objective matters because superannuation was never designed to be an unlimited tax shelter; it was designed to fund retirement income. If we lose sight of that, we risk eroding public confidence in the entire system, and confidence is everything.

Superannuation tax concessions are generous. They cost the budget more than $60 billion every year. Without reform, they are projected to exceed the cost of the age pension in the 2040s. Now, concessions are appropriate—they encourage savings and they reduce future pension liabilities—but they must be targeted. Currently, 38 per cent of super earnings concessions go to the top 10 per cent of income earners, while 54 per cent go to the top 20 per cent. That concentration cannot be ignored.

It's important to understand exactly what the low-income super tax offset, or LISTO, is, because this goes to the heart of fairness in our super system. When a low-income worker receives a super contribution from their employer, that contribution is taxed at 15 per cent inside the super fund. But, if that worker's marginal tax rate is lower than 15 per cent or they pay little or no income tax, they can effectively pay more tax on their super than on their wages. That is unfair. LISTO exists to correct that. It refunds the tax paid on concessional super contributions up to a capped amount so that low-income earners are not penalised simply because they earn less.

This legislation strengthens LISTO. From 1 July 2027, the LISTO threshold rises from $37,000 to $45,000, and the maximum payment increases from $500 to $810. Crucially, this legislation explicitly links LISTO settings to income tax thresholds and the superannuation guarantee rate, ensuring the offset keeps pace structurally into the future. This is not cosmetic; it is structural reform. In 2027-28, 770,000 additional Australians will become eligible; 490,000 Australians will receive a higher payment; 1.3 million Australians will benefit directly; around 750,000 are women; and around 550,000 are under 30. The total number eligible rises to 3.1 million Australians. There are 14 times as many people benefiting from this LISTO boost as there are people with more than $3 million in super. For a low-income worker, up to $810 a year into super is meaningful as it compounds into retirement. It helps narrow the gender retirement gap. If we are serious about closing retirement inequality, we cannot ignore this reality. That is dignity. That is security. That is fairness.

The benefits of this reform are not abstract; they will be felt directly in communities like mine. Analysis by the Super Members Council shows that in Calwell alone around 8,180 low-income workers will receive a boost to their superannuation because of the changes to the low-income superannuation tax offset. On average that means about $399 more going into retirement savings of each of those workers per year—delivering around $3.3 million in additional super savings into our community. Importantly, the majority of those who benefit are woman—more than 5,100 women in Calwell—helping to narrow the super gender gap and strengthen the retirement security of family across Melbourne's north.

The Treasurer captured this in a recent interview on ABC Radio National. He said:

The legislation does 2 things. It does make the concessional tax treatment fairer for people with the biggest balances, but it also increases the low-income super tax offset for people with the lowest balances.

He described it as making the super system fairer from top to bottom, and he is right. This is an important intergenerational issue. Younger Australians are entitled to ask whether a system costing more than $60 billion a year is sustainable. This legislation ensures that it will be.

The Treasurer also said if those opposite:

… vote against this legislation they will be voting for less super for people on low incomes, and they will be voting for even bigger tax breaks for people who have $10 million or $20 million or $30 million in their super already.

That is the choice before this parliament. You either strengthen retirement savings for super-low-income Australians, or you push more tax benefits, more tax concessions to those with high retirement savings going into the millions and tens of millions.

Let us also recognise what is actually structurally important about this legislation. For too long the low-income super tax offset was static while the broader tax system moved. Income tax thresholds changed. The superannuation guarantee increased, but the LISTO threshold sat still. That is how inequity creeps in, not through dramatic change but through drift. This legislation ends that drift. By explicitly linking LISTO thresholds and payment rates to personal income tax settings and the superannuation guarantee, we embed fairness into the architecture of the system. We futureproof it. We ensure that low-income workers are not quietly left behind every time structural reforms are made elsewhere, because superannuation is a long game. A 22-year-old apprentice entering the workforce today will contribute for 40 years. A retail worker earning $42,000 a year will rely on these structural settings compounding over decades. The decisions we make now echo across a working lifetime, and the decisions we avoid echo too. If we pretend the balances of $10 million, $20 million and $30 million should continue receiving unlimited concessional treatment, the fiscal pressure does not disappear; it accumulates and it compounds, just like super itself.

Intergenerational fairness cuts both ways. It means strengthening balances for low-income workers today, and it means ensuring tomorrow's taxpayers are not asked to fund unsustainable concessions for the very few. That is responsible economic management. Superannuation did not drift into existence. Labor built it—deliberately, systematically and against resistance—and that is why we will defend it.

Let us not pretend the politics here are new. The Liberal Party opposed superannuation at its inception. They froze the superannuation guarantee. They delayed increases. They undermined accountability reforms. Now they present themselves as defenders of aspiration, while defending unlimited concessions at the very top. The Leader of the Opposition and his failed economic team produce reactionary thought bubbles, few of them containing actual thought.

What they cannot accept is the idea that working people might accumulate capital without their permission, that working people can build wealth and that working people can control their financial future. Superannuation democratises capital. It turns wage earners into investors. It gives working Australians ownership in infrastructure, industry and enterprise. For Labor, that is the point. Some opposite have always been uncomfortable with that. They frame the Australian dream as trade-offs: choose between owning your home or having a comfortable retirement; draw down your super to patch over housing failures; downgrade your expectations. We on this side of the House, the Albanese Labor government, reject that. The Australian dream has always been both: a home of your own and a dignified retirement after a lifetime of hard work. We will not force Australians to choose, and we will not defend unlimited taxpayer subsidies for those with $20 million in super, while telling ordinary Australians to tighten their belts.

This side of the House stands with working people. We stand with the nurse, the apprentice, the retail worker, the single parent returning to work and young Australians starting their first job. Superannuation is not a loophole. It is not a shelter. It is not a privilege for the few. It is a pillar of economic security for the many. Labor built it, Labor strengthened it and Labor will defend it—stronger, fairer and more sustainable. I commend the bills to the House.

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