Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer advise the House of the latest steps taken by the government to streamline and simplify superannuation?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Moncrieff for his question and acknowledge the work that he does on the finance and treasury committee. On 9 May in this year’s budget, the government announced the biggest reform to superannuation in decades. Members will know that the government’s reform plan involves making superannuation payments out of taxed funds tax free when a person turns 60—tax free for lump sums, tax free for pensions. No longer will it be necessary to differentiate between pre-1983 and post-1983 and pre-1994 and post-1994 capital gains tax, exempt or otherwise. There will be one simple rule: when those who have their superannuation in a taxed fund turn 60, they will be able to take benefits tax free. In addition to that, the government plan involves halving the age pension’s assets test taper, extending the co-contribution to the self-employed and encouraging people to remain in the workforce by giving them the option to take superannuation tax free whilst they remain perhaps in part-time employment or otherwise after the age of 60.

We are still to hear from the Labor Party what its position on this legislation is. It has not announced a position, notwithstanding that this was announced in the May budget. Susan Ryan, writing in the Australian on 12 May 2006, had this to say:

“These are the most important changes to superannuation ever,” Peter Costello boasts. They’re even more important, he claims, than the 1992 introduction by the Keating government of compulsory super. The Treasurer can often overstate his case, but this time he’s right.

I do not agree with everything she wrote.

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

No, no. I don’t agree with it either.

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

She goes on to say:

That’s a pretty big mouthful, coming from a lifelong ALP supporter and former Labor minister. My political history to the contrary, I believe Costello has a lot to boast about.

There we go—we’re getting a bit of leadership from a former Labor minister. Back in the old days, when the Labor Party used to have policy, they would actually announce where they stood on these things. Instead of engaging, as Mark Latham called it, in ‘scab-lifting politics’—running around trying to find a little place where they can lift a scab and try to cause trouble—once upon a time Labor had leadership and Labor had policy. But that was long before the member for Brand. At the rate he is going, he will be here a long time with his policy backflips. When he has backflips, they shake the earth. It was no little ripple in the Sydney Town Hall—the earth moved for the whole of Australia.

I digress. Yesterday the government announced that the $150,000 entitlement for post-tax contributions could be averaged over three years. In addition to that, one year would count from budget night to 30 June. That would mean that a person has an entitlement to put in $150,000 of post-tax contributions between the period starting on 10 May and 30 June. In addition to that, three-year averaging means that you can put in, in any one year, $450,000 of post-tax contributions as long as you do not put in anything else in the two years thereafter—that is, the $450,000 would take up the entitlement of three years. In order to protect against the backdating for years that have not been taken up, it will be on a ‘use it or lose it’ basis. So anybody can put in $450,000 as long as they do not put in anything for the two years thereafter. 

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Link to this | Hansard source

Another backflip!

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

In addition to that, small business owners can contribute up to $500,000 of capital gains from the sale of a business to superannuation in addition to contributions allowed under the cap. These transitional announcements have been welcomed by industry.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Link to this | Hansard source

The policy’s not five minutes old and there’s already a backflip.

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! The member for Hunter is warned!

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

They have been described as sensible transitional arrangements by IFSA and by others in the industry. We look forward to the ALP coming up with a policy in relation to superannuation. We look forward to the ALP announcing its position. These are long-term structural reforms for the Australian economy and we would appreciate a bit of support from the other side of the parliament for this important reform for all Australians.