David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Human Services, Financial Services, Superannuation and Corporate Law. How have the government’s simpler and fairer superannuation reforms been received and what obstacles are there to these important reforms being rolled out?

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

I thank the honourable member for Lindsay for his question. The government will deliver an historic boost to the retirement incomes of Australians to deal with the ageing population and to give Australians a chance for a more comfortable retirement. This is a big reform. These are the biggest reforms since the introduction of our national superannuation system in 1992—8.4 million Australians will benefit from an increase in their retirement incomes and 3.5 million Australians will pay little or no tax on their superannuation as the government effectively reduces the contributions tax for low-income earners to zero.

These are reforms of today to meet the challenges of tomorrow, and they have been very widely welcomed. The former Governor of the Reserve Bank and former Secretary to the Treasury, Bernie Fraser, had this to say. He said that he was very encouraged by that move because it will make a significant contribution to more Australians having the chance of a half decent retirement income. He said that, really, nine per cent is not sufficient for the vast majority of Australians; 12 per cent will be better. And the Combined Pensioners and Superannuants Association of New South Wales said that pensioners and superannuants welcome the Australian government’s response to the Henry review as it will make the superannuation system fairer for low-income earners and will boost retirement incomes. They said that they call on all MPs to pass on these reforms. Bernie Fraser was a Labor mate—maybe the Combined Pensioners and Superannuants Association are Labor mates too.

So we have had Bernie Fraser and we have had the superannuants. They said Bernie Fraser was a Labor mate. Let us see what that other well-known Labor mate John Brogden, the Chief Executive of the Investment and Financial Services Association, had to say about the reforms of this government. He said that the policy announced by the government eight days ago is good for Australia and good for Australians. He said that it will deliver an extraordinary benefit to the economy. He went on to say that this is a visionary policy, that it is visionary for Australians’ retirement outcomes and it is visionary for the Australian economy. He said that they support this strongly and call on the opposition to join with the government in supporting this important policy. That is that well-known Labor mate John Brogden.

The reason why these reforms have been so well received is that ordinary Australians stand to benefit so much from these reforms. An employee aged 30 today, on average weekly earnings, will receive an extra $108,000 when they come to retire. And a female aged 30 today, on average weekly earnings, who may have her working pattern interrupted by maternity leave and other issues, stands to gain $78,000 when she comes to retire. But the opposition opposes these important reforms and opposes this boost to the retirement incomes of Australians.

I have seen the opposition, and saw it again a few moments ago, arguing that there is no link between the resources super profit tax and these reforms. The shadow minister for superannuation, the member for Cowper, who is now more accurately known as the shadow minister against superannuation, has issued a press release saying there is no link, and I saw the shadow Treasurer arguing this on Insiders on Sunday. Winter is coming to Canberra and it is time to get your sloppy joe out once again—because there he was, arguing on Insiders that there is no link. He said there was no government money going into the superannuation guarantee. The opposition so lacks an understanding of basic economics and so lacks an understanding of public finance that it seems not to realise that superannuation in Australia attracts a tax concession, and when you increase the amount of money on superannuation you increase the cost of the tax concession. That is how it works and a half a percent increase in the superannuation guarantee sees the cost of the tax concession go up by $500 million.

The opposition stands against improved superannuation in two ways: it opposes the increase in the superannuation guarantee and it opposes the super profits tax on the resources sector, which will fund the improved and increased tax concessions. Now, there is something deeper going on here because the opposition, the Liberal Party, hates superannuation. It opposed superannuation when the Keating government introduced it. It opposed the increase in the superannuation guarantee all through the Howard years. It stopped Australian working families getting an improved retirement income all through the Howard years.

This Leader of the Opposition particularly hates superannuation. This Leader of the Opposition argued in his book Battlelines that the tax concessions for superannuation should be abolished. He would put a wrecking ball through the retirement incomes of Australians—a wrecking ball. He would abolish the tax concessions for superannuation and make Australian workers pay tax on superannuation at their full marginal tax rate. The Australian people have a very clear choice at the next election: a government which believes in promoting and boosting the retirement incomes of Australians or an opposition which stands against boosting the retirement incomes of Australians and stands against working Australians having a more comfortable retirement.