Kate Thwaites (Jagajaga, Australian Labor Party) Share this | Hansard source

The Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 is important legislation because goes to the heart of what sort of superannuation system we want in Australia and what superannuation means for Australians both now and for future generations. Superannuation is absolutely one of the great achievements of the Australian Labor movement. It is a reform that has been grounded in fairness, in dignity and in opportunity. It was built on a simple but powerful idea that, after a lifetime of work, Australians should be able to retire with security, independence and dignity, not with uncertainty.

As superannuation was built, it was never intended to be a vehicle for unlimited tax advantages. It was designed to support working Australians—cleaners, nurses, teachers, retail workers, tradies, carers—to ensure that older Australians could look forward to retirement with dignity and security. This bill strengthens that original purpose. It ensures that our superannuation system remains fair, sustainable and focused on delivering income in retirement, alongside government support, in an equitable way.

It is important to look at the complete picture of what the government is doing to reform superannuation in Australia, first by better targeting superannuation tax concessions so that they do remain sustainable and fair, and second by strengthening retirement outcomes for low-income Australians, particularly women, who have historically retired with less superannuation and less security. I pay tribute to the number of women who have spoken to me about this inequity and who have campaigned for reform in this space, and I'm pleased that this Labor government is bringing this forward.

Superannuation tax concessions represent one of the largest investments governments make in Australians' future wellbeing. These concessions now cost the budget more than $60 billion each year, and without reform they are projected to exceed the cost of the age pension in the decades ahead. That means that we have a responsibility not just to today's taxpayers but to our future generations to ensure that these concessions are properly targeted. At present, a disproportionate share of superannuation tax benefits flow to individuals with very large balances, and go well beyond what's required to fund a comfortable retirement. I have heard from people in my electorate who have very comfortable superannuation balances but say to me: 'We want to see a fairer future for all Australians. We want all Australians to be assured dignity in retirement.'

At the moment, around 38 per cent of super earnings concessions go to the top 10 per cent of income earners, and more than half go to the top 20 per cent. That is not consistent with the purpose of superannuation I outlined at the start of this speech. Schedules one to three of this bill implement modest, carefully designed changes to ensure concessions remain fair while preserving incentives for Australians to save. From the 2026-27 income year, earnings on superannuation balances below $3 million will continue to be taxed at up to 15 per cent, exactly as they are today. Earnings on balances between $3 million and $10 million will be taxed at up to 30 per cent, and earnings on balances above $10 million will be taxed at up to 40 per cent. Both thresholds will be indexed to inflation to maintain fairness over time.

It's important to be clear about what this means. These changes affect fewer than 0.5 per cent of Australians with superannuation accounts. The highest rate applies to fewer than 0.1 per cent. So, for the overwhelming majority of Australians, for the millions of workers out there who are working and saving for their retirement, nothing will change. Their concessions remain intact. Their retirement savings remain supported. What this reform does is make sure that those with extremely large balances are not receiving a tax treatment that is far more generous than what was intended when the superannuation system was created. It strengthens the sustainability of our superannuation system so that it can continue supporting Australians for decades to come. This is the work that Labor governments do, and it is the purpose that we bring to this place, not just to protect the dignity and security of Australians who are retiring now but to protect those to come.

This is part of a broader set of reforms that the government is bringing, and I want to talk about some of those other reforms, which are really about lifting outcomes for those who, traditionally, have been at the bottom end of our super system. The low income superannuation tax offset, or LISTO, which means that low-income workers who often pay tax on their super contributions, even when they pay little or no income tax—without the LISTO provision, the system would effectively penalise people on lower incomes for saving for retirement. What we are doing here is correcting that imbalance. We will lift the LISTO eligibility threshold to align it with broader income tax settings and also increase the maximum payment to reflect the rise of the superannuation guarantee to 12 per cent. These are thresholds that haven't kept pace with broader tax changes, and they have meant that many low-income earners have missed out on support that they should rightly receive. I have had a number of people raise this issue with me, particularly those who are advocating on behalf of Australian women, because it is often Australian women who, as the latest gender pay gap data shows us, are earning less and are more likely to be in a position where they are retiring into a more uncertain outcome. So, for those people, this change is going to mean they are looking at a fairer superannuation system.

Again, we're putting in place those principles of having a system that supports people who work hard, who want security and who are looking for dignity in retirement. It's not special treatment; it is about making sure that we are equitable in how we are treating our system and how we are supporting working Australians into the future. I am particularly passionate about this reform in terms of what it will mean for women who are retiring and for the women who are working in aged care and in child care, who do, over their lifetimes, earn lower average wages, who take time out of the workforce to care for children or family members or who may be working part time more often. I know that this benefit will very much strengthen their retirement outcomes and their retirement security.

Of course, it comes along as part of a suite of changes that we have made as a government to support working women including putting superannuation on paid parental leave, acknowledging that this very important payment is something that, just like any other workplace entitlement, deserves to receive superannuation. The work we are doing to drive down the gender pay gap—and I note that, while it is too high, it is heading in the right direction, and that is a direct result of the focus that this government brings to improving the conditions for working Australian women, to improving their wages in industries like aged care and also to improving the security and the dignity they can look forward to when they come to retirement age. We are recognising that the work they are doing in our communities is vital and deserves to be supported into the future.

I am particularly pleased to see this reform as part of the broader work that the government is doing to strengthen our superannuation system and to make sure it is fit for purpose. This is the work that Labor governments do. Superannuation was built by Labor to ensure that Australians have security and dignity in retirement, and it has absolutely served our country well. I know there are many countries around the world that look to copy the Australian system because they have seen the effect it has had for us as a country and for individuals in this country as well. It is our responsibility to make sure that system remains fair and remains something that is supporting all Australians to retire with security and dignity. The people who benefit from these reforms are working Australians—people who work in our shops, the people who are our carers and our administrative staff and, of course, the young people to come and who are just now starting their working lives. These people deserve retirement outcomes that rely on consistent policy settings that support them fairly over time. These reforms will reinforce their confidence that the superannuation system works for everyone and not just for the fortunate few.

I do want to briefly mention that, of course, in bringing these reforms forward the government has consulted widely. We understand that they are changes that will affect people. This is evidence based policymaking, and we thank everyone who's been involved in the consultation to help us get to this point of careful design where we are strengthening retirement outcomes for low-income workers and building a sustainable super system that will deliver for Australians now and into the future.

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