Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Superannuation (Excess Untaxed Roll-Over Amounts Tax) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

Contributions to superannuation are subject to a number of different caps, which vary depending on the age and retirement status of the person making the contribution, and on whether the contribution is made out of before or after tax income. These caps exist to ensure that the amount of concessionally taxed superannuation benefits that a person may receive is sustainable and appropriately targeted and recognises people's life expectancy.

Excess, untaxed, roll-over amounts are currently taxed at a rate of 46.5 per cent, which is the sum of the top marginal personal tax rate of 45 per cent and the current Medicare levy of 1.5 per cent.

The Superannuation (Excess Untaxed Roll-Over Amounts Tax) Amendment (DisabilityCare Australia) Bill 2013 will increase the rate at which tax on excess untaxed roll-over amounts is payable.

From 1 July 2014, this rate will increase by half a percentage point to 47 per cent, and will apply to excess untaxed roll-over amounts paid on or after 1 July 2014. This reflects the half a percentage point increase in the Medicare levy.

These consequential amendments will help to ensure the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong and stable and continuous funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

I commend this bill to the House.

Debate adjourned.