Sally Sitou (Reid, Australian Labor Party) Share this | Hansard source

At its heart, the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 asks a simple question: what and who is superannuation for? Is it for ordinary working Australians—our teachers, nurses, early educators and police officers—who are putting aside a little each fortnight so they can retire with dignity and security? Or is it a vehicle for unlimited tax concessions for balances so large they far exceed what anyone would need to fund a dignified retirement? This legislation answers that question clearly. Superannuation exists to deliver income for a dignified retirement for everyday Australians, not to provide indefinite, uncapped tax advantages. This legislation strengthens that principle responsibly and proportionately.

Labor built Australia's superannuation system, and it remains one of the most significant economic and social reforms in modern Australian history. It reshaped retirement in this country. It lifted retirement incomes, it reduced reliance on the age pension and it created one of the largest pools of national savings in the world. We ought to be incredibly proud of it. Most importantly, it gave working Australians a retirement they could look forward to with financial security. Before compulsory superannuation, too many Australians faced retirement with little more than the pension. Today, millions retire with a combination of superannuation and government support and with greater financial independence.

We on this side of the House are proud to have created superannuation. We are proud to defend it whenever it's attacked by those opposite. We're proud to strengthen it at every turn and at every opportunity because we understand something that those opposite too often forget. Superannuation is not a bonus, it's not a windfall and it's not some spare change. It's deferred wages. It's income earned through hard work set aside to provide security in retirement. It should always work to serve ordinary working Australians.

The difference between the two sides of this House on superannuation could not be clearer. Under those opposite, superannuation was treated as negotiable. They froze the superannuation guarantee at 9.5 per cent for years, denying workers thousands and thousands of dollars in retirement savings over their lifetimes. They fought against increasing it to 12 per cent. They described compulsory super as a burden on business. They entertained policies that would have allowed super to be raided in ways that risk permanently eroding retirement balances. Some on their side have even questioned the very foundations of compulsory superannuation itself, including the newly minted Leader of the Opposition and the shadow Treasurer. They presided over a system where unpaid super became a systemic problem. By contrast, Labor has increased the superannuation guarantee to 12 per cent. We are paying super on paid parental leave. We are introducing payday super so that workers are paid what they are owed when they are owed it. Through this bill, we are continuing that work.

This bill is the latest part of our suite of reforms to make sure that our superannuation system remains world class. We are taking steps to make it even better, fairer and stronger. Superannuation tax concessions cost the budget more than $60 billion each year. This is not a small figure, and it is projected to grow. At this current rate, that figure is projected to exceed the cost of the age pension itself in the 2040s. That is a structural budget reality that demands responsible stewardship.

Right now, those concessions are heavily skewed towards top income earners. Thirty-eight per cent of super-earning concessions go to the top 10 per cent of income earners, and 54 per cent go to the top 20 per cent. That is not what superannuation was designed for. This bill better targets concessions where balances exceed $3 million. For 2026-27, earnings on balances between $3 million and $10 million will be taxed at up to 30 per cent. Earnings on balances above $10 million will be taxed at up to 40 per cent. Let me say this really clearly: there is no change to the taxation of earnings on superannuation balances below $3 million—none. Those earnings will continue to be taxed at up to 15 per cent. This reform affects less than 0.5 per cent of Australians with superannuation accounts. The higher rate of 40 per cent above $10 million affects less than 0.1 per cent of Australians. That's less than one in 1,000 Australians. In the vast majority of cases, even under these reforms, this will still end up being a concessional tax treatment. It's still under the top marginal personal income tax rate. The thresholds of $3 million and $10 million will be indexed to CPI. Earnings will be calculated using established income tax concepts and realised gains. Defined benefit schemes will be treated in a similar way. Superannuation funds will calculate and report relevant earnings to the ATO to ensure integrity.

So, when we hear scare campaigns claiming retirement tax grabs from those opposite, the numbers tell a different story. This is not radical. This is targeted, it's measured, it's proportionate and it reflects more than two years of consultation and feedback. This is careful policy and it is restoring balance in our superannuation system. It preserves concessional treatment for the overwhelming majority of Australians and it recognises that, when balances reach $5 million, $8 million or $12 million, we are no longer talking about retirement adequacy. We are talking about wealth accumulation supported by large taxpayer subsidies. Taxpayers are entitled to expect that those subsidies are proportionate, fair and reflect a reasonable boundary. The superannuation system must remain credible for the prosperity of Australians, and credibility depends on fairness. When concessions grow without limits at the very top, public confidence in the system erodes.

But fairness is not only about what we better target at the top. It's about who we lift at the bottom as well. We are strengthening the low-income superannuation tax offset, the LISTO. We are increasing it from $500 to $810, and we are lifting the eligibility threshold from $37,000 to $45,000 from 1 July next year. Without LISTO, some low-income earners effectively pay more tax on their superannuation contribution than they do on their wages. This undermines the whole purpose of concessional rates of tax for superannuation. This isn't fair or aligned with the principle of concessional treatment. This reform corrects that. This reform ensures low-income workers receive a fairer concession, coming at the same time as the government's third round of tax cuts this next year.

Under this Labor government, Australians are continuing to earn more and keep more of what they earn. That principle applies here as well. Put into real terms, workers will receive up to $810 per year into their super, and the average increase will be at about $410. Over time, that would mean about $15,000 more at retirement. From 2027 to 2028, over 770,000 additional Australians will be eligible for LISTO. Around 490,000 Australians will receive a higher payment and, in total, 3.1 million Australians will be eligible for LISTO. Around 60 per cent will be women. That's around 750,000 women who will benefit. Around 550,000 young Australians will also benefit. Many of the people benefiting from LISTO—this increase—will be those who are working and juggling family and caring responsibilities. There are 14 times as many people who will benefit from this boost to LISTO as there are people with more than $3 million in super—14 times as many people will be better off.

Ultimately, this legislation is about protecting and strengthening the integrity of superannuation. We believe super belongs to everyday Australians. Under Labor, it is improved, safeguarded and anchored to its purpose. Under the coalition, it was undermined, weakened and questioned. We strengthen superannuation; they stall it. We lift retirement incomes; they freeze it. We make sure that super works for each and every Australian. They want to transform it into a wealth accumulation tool for the privileged few. This bill draws that difference clearly. This is not radical reform; it is responsible and fair reform which supports hardworking, ordinary Australians—predominantly women and young Australians—who deserve a fairer deal. Labor built superannuation, Labor are strengthening it with this bill and Labor will always defend it from those who seek to undermine it because we are proud of our superannuation system.

In 2009 I was part of an Australian volunteer program working for a Chinese NGO. As part of that program, I got to deliver a talk to a range of people in China, including Chinese government officials and people working in the NGO sector, about Australia's three-pillar retirement system of the age pension, private savings and, key to all of it, the superannuation system. I was extraordinarily proud to talk about the advancements that we have made when it comes to retirement incomes. Subsequent to that presentation, I was then invited to talk about it at an ageing conference at Montana university in the United States.

This is an example of great policy entrepreneurship that Australia developed many decades ago that is being looked at by other countries around the world and is being adopted. We are proud of that legacy. We will continue to strengthen that legacy. I look forward to the coalition getting on board with finally recognising the importance of the superannuation system.

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