Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I am pleased to summarise and conclude this debate. I first of all want to thank members who have contributed to this debate.

The measures that are included in this set of bills make important changes to superannuation, to make it fairer and more sustainable from a fiscal point of view, but also to ensure that our—I think—world-leading superannuation scheme continues to be that. It ensures that Australians are able to save over the course of their working lives in a much more flexible and fair way to ensure that they can provide for their retirement.

There are three great economic goals that I think Australians share: to be able to own your own home; to be able to raise your children—where you have been given that great blessing—and to be able to provide for your children and support you children by obtaining work and becoming self-sufficient as a family; and, thirdly, to be able to be independent in your retirement years. These are important economic objectives and goals that I think Australians share and aspire to. As a government, we want to facilitate and support all of those goals. These bills do exactly that, by making the superannuation system fairer, more flexible and, of course, more sustainable.

This is to reflect also the more precisely defined objective of superannuation; it is not there to provide a tax minimisation vehicle and it is not there to provide an estate planning tool. It is there to ensure that people can save and provide for an income in retirement where they can support themselves, and that is what these bills achieve.

I note the second reading amendment that has been brought forward by the opposition. I make a couple of comments in relation to that second reading amendment. Firstly, it makes reference to the budget being under threat and hitting the pay packets of Australians and risking our triple-A credit rating. The greatest threat to our triple-A credit rating sits on the opposition benches. When the Labor Party faces up to its economic responsibilities and supports the budget consolidation measures that are before this parliament then the budget will return to balance as projected, and that is what the rating agencies have called on this parliament to do. Those opposite do not share the government's objectives in achieving budget balance. In fact, with the measures that they have put forward, including the additional revenue that is contained in their suggested amendments, and even after removing the government's tax cuts for small and medium-sized businesses, they are still looking at an increased deficit over the government's figures of $16.8 billion. So that hardly does anything to give encouragement or confidence to the ratings agencies. The greatest threat sits not on this side of the House but on the other side of the House, because those opposite continue to deny their economic responsibility as a major political party in this country and ensure that the government is able to pass its budget measures in order to restore the budget to balance.

Those opposite talk about their own measures in superannuation as leading a debate. The only debate they are leading is the debate to have higher taxes. That is the only debate they are leading and they are welcome to it. I will concede happily that the opposition are the world debating leaders when it comes to increasing taxes. They are unchallenged at least from those who sit on this side of the House when it comes to that great claim that they make for themselves. What they have put forward in their amendments is to actually make superannuation not more flexible, not fairer, not more sustainable just more highly taxed. So their changes to superannuation are just about trying to tax savings and Australians more, not to make the system fairer and not to make it more flexible.

In the measures that those opposite refer to, first of all, they just basically tax people more by reducing the division 293 threshold to $200,000, which is basically because it is inclusive of superannuation contributions of a wage income of $180,000. Not only do they want to keep tax rates higher for everyone but they also want to have a higher tax rate on incomes going from $180,000 and above when it comes to superannuation contributions. So they want to tax working Australians more as they are making contributions to their superannuation, and the government does not support that objective.

Secondly, those opposite want to lower the annual non-concessional contributions cap to $75,000. In the budget-in-reply speech, the Leader of the Opposition made only one criticism of the government's superannuation package—that was, the lifetime non-concessional cap and the false allegations that it was retrospective. That was the only thing he raised. He did not raise any other concerns or questions about the government's superannuation package from there all the way to election day. That was the only problem. The government, after the election and after consulting further with government members and others, brought forward an amendment to our package which replaced the non-concessional lifetime cap with the $100,000 cap for annual contributions for non-concessional contributions as an alternative to that approach. That was only for those who have a balance of less than $1.6 million, which is the annual transfer balance cap.

Those opposite are now saying that that cap of $100,000 should be dropped to $75,000. Why we object to that is we think that if an Australian is in a position to get to the $1.6 million transfer cap—frankly, very few Australians are able to achieve that over the course of their lifetime, around one per cent—and they can get there as a result of the $100,000 annual non-concessional contribution, if they were a farmer and their income was lumpy or if they were a contractor or things changed over time then they would have the flexibility in that $100,000 cap to help them get to that limit. So all this trying to drop it to $75,000 will do is make it even harder for those people to reach what is the threshold that has been established here to ensure that something is fair, and that is why we do not support it.

Thirdly, those opposite want to oppose the introduction of catch-up concessional contributions for Australians who have a balance of less than $500,000. That is a third of what the transfer balance cap is, and we want to say that if you have been out of the workforce, if you have been a carer, if you have had kids, or for whatever reason you have not been able to make the concessional contributions to your superannuation that you have been entitled to, then we will let you catch up. But those opposite say no, because they are not interested in trying to improve the flexibility of superannuation. It is just one big tax grab from their perspective.

This is an important fairness and flexibility principle, particularly for women, and that is why we are doing it. We got into this business of trying to reform our superannuation system to make it work better for people who have economically uncertain working lives. Things change over the course of a lifetime. Life's events can be quite cruel. Weather events can be quite cruel to farmers, and others can be equally impacted by these things. We are saying, 'Let them catch up. Give them a go to catch up when they have the means to do so.' But those opposite say no.

Then, of course, they are opposing the changes to tax deductibility for personal superannuation contributions for those who have more than 10 per cent of their income from nonwage sources. Who are they? They are contractors, they are small business owners, they are home business owners and they are people who are actually engaging in the opportunities of the new economy that we are in, whether we like it or not, and are actually having a go and trying to make things work. They cannot claim deductions for superannuation from that contracting or business income and put it in their superannuation. They can only do it for the wage income. That might be a firey, like in New South Wales, or a policeman—and I know plenty of them, particularly in the shire—who is working two nights or days a week and protecting our community. On other days, they are working on building sites or doing other jobs. They do not get access to those contributions on their contracting income.

There are 800,000 Australians who will benefit from this flexibility measure, and the Labor Party is opposing it because they are only interested in the tax grab from super, not in making superannuation fairer and more flexible. That is why the second reading amendment opposed by the opposition is a nonsense, that is why it is not responsible and that is why it does not give me any encouragement that the Labor Party is going to step up to their economic responsibilities to ensure that the budget is returned to balance. They will stick to their plan for $16.8 billion in deficits over the next four years.

Mr Bowen interjecting—

I hear the interjection from the shadow Treasurer: 'Oh, but this gives me 1.4.' Even after he has the 1.4, he is still $16.8 billion behind. He is chasing his tail around the room; he cannot keep up with spending by his own colleagues. I know it is a tough job for the shadow Treasurer. I know the shadow Treasurer would like to save more money, but he cannot keep up with the spending binge of all those with whom he sits around the table, so he has my sympathies. But I cannot share his experience because, on this side of the House, our cabinet works together to try and improve the budget. What those opposite are about is just spending like there is no tomorrow. The poor old shadow Treasurer has to stand up at elections and whisper quietly into the microphone, 'By the way, our deficit is $16.5 billion higher—shhh.' That is what happens.

I am pleased to commend these bills to the House and I am very pleased to have been part of the process. I want to commend, again, all our Treasury officials, all of our staff and advisers and the many thousands of people who have been consulted in the preparation of these bills—and the strong working relationships. Our own government members have made an outstanding contribution in making sure that this is a package of reforms that makes superannuation fairer, makes it more flexible and makes it more sustainable.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The question is that the amendment be agreed to.