Pat Conaghan (Cowper, National Party, Shadow Assistant Minister for Social Services) Share this | Link to this | Hansard source

I would like to thank the member for Moncrieff for introducing this motion and for her continued work to protect the interests of young Australians. This motion allows me the opportunity to focus on super tax's effect on regional Australians. As we have seen time and time again over the past 12 months, under Labor's policies, the regions are set to do the heavy lifting once again—and with no safeguards in place, where we need them the most. We've seen, with regional health, the changes to the Distribution Priority Areas for GPs, which we worked so hard to expand for places like Cowper; a lack of safeguards for regional community pharmacies when changing the dispensing laws, which is an ongoing, serious problem; and the resulting and potential closures of critical healthcare facilities in our towns. I think 23 have closed since Labor's policy was implemented early. We've seen this with the ill-prepared move towards renewables. We're not against renewables, but there's nothing to replace them at the moment, and we've seen electricity prices skyrocketing across this country. Today the Wicked Elf brewery in my electorate—renowned across Australia; it's received awards—announced that it is closing its doors because it cannot pay its electricity bills; they've increased that much. We've seen a complete lack of infrastructure funding, with proposed projects that would have ensured better regional road services and communications cancelled or put on hold in order to funnel large sums of taxpayer money to Labor pet projects in metro areas, and now we're seeing it in superannuation.

Contrary to the stories by the ABC and others, the effects of these changes to superannuation are not confined to people in Double Bay, Toorak or other affluent metropolitan suburbs around the country. In fact, in the vast majority of these cases these super funds won't be used to purchase yachts or luxury cars in retirement—which was so gleefully insinuated. These changes actually affect our businesses, like GPs, pharmacists and especially our farmers—those people who literally keep the economy going, keep food on our tables and keep health care afloat.

I have heard the average person ask, 'How on Earth do people have $3 million in their super?' Well, the simple answer is: land value. A considerable number of professionals, small business owners and farmers have placed their business premises or farms in their self-managed super funds because of the prospective capital gains tax advantages. These aren't people with waterfront mansions; these are people on farms and, in the case of pharmacists, for instance, their cash flow is next to nothing. Although they may be asset rich because of the increasing value of their land, they're technically cash poor.

The implications of this scenario are more complex than my five-minute speech will allow, but the resulting outcome is that people with a business landholding in any kind of self-managed super fund may face considerable stress through liquidity difficulties in meeting what will be a crippling tax bill for unrealised capital gain. In a significant number of cases, forced land sales will prove to be the only solution.

This government will attempt to push this tax through, presenting images of super fund holders akin to Scrooge McDuck swimming in piles of money and laughing at those who are paying their fair share of tax, but the reality is quite different. While those on the other side of the floor claim that this will affect only 80,000 Australians, the Treasurer's own modelling shows that this number will drastically increase year on year, and it is specifically designed to do so in order to exponentially increase tax earned as a result of the policy—yet another tax by stealth, yet more smoke and mirrors, and not fiscally sound.

Alicia Payne (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

I rise to respond to this frankly ridiculous and misleading scaremongering motion that the opposition have brought today regarding superannuation tax. Frankly, it demonstrates just how out of touch they are with young people today. Maybe if they were really concerned about the future of our youth they'd have a coherent climate change policy. Maybe they'd have supported the government's bill for more social and affordable housing that they've joined with the Greens to further delay in the Senate today. Maybe they'd have backed our Secure Jobs Better Pay legislation to protect young workers from being ripped off by dodgy employers. Instead, we've got this motion about superannuation which is completely misrepresenting the government's policy.

Our government has been completely upfront about the challenges that are facing the economy and the budget. We're making a modest adjustment to superannuation tax breaks for earnings on balances above $3 million, a change that will not come into effect until after the next election—99.5 per cent of Australians with super accounts will still receive the same generous tax breaks that they do now, and the 0.5 per cent of people with balances over $3 million, who this change will affect, will still receive tax breaks, just slightly less generous ones. So there are a few facts about our actual policy.

Let's remember what we're talking about here: we're talking about the superannuation system that Labor built, which is seen as a world-leading example. The opposition will always attack the superannuation system, because they don't believe in it. We will always protect it and make it stronger. The simple fact is that young people today can only even conceive of a super balance of more than $3 million because of the success of Labor policy in this area. But, of course, in conflict with what this motion suggests, the majority of young people will not have a super balance of more than $3 million. A young person earning $90,000 today, with an increasing salary throughout their life, will almost never accumulate $3 million in their super accounts. In fact, Treasury projects that in 2052 only the top 10 per cent of earners retiring that year will have more than $3 million in their super account. So it's pretty clear that the coalition are not talking to young people about the issues that are important to them.

It's a good opportunity to compare the pair here. Labor is offering changes to make super concessions fairer, and the Liberals are going after the most vulnerable with schemes like robodebt and attacking Medicare. Labor supports Australians with energy bill relief and more affordable housing for children and families fleeing domestic and family violence, but the Liberals want to die on the hill of stopping the 0.5 per cent of highest super balances from a modest tax reform. Labor backs action on climate and environmental law reform, and the Liberals want to put a nuclear reactor in your backyard. Talk about priorities!

But it's important for me to also note the sheer hypocrisy of this motion put forward today, because the former coalition government made changes to superannuation taxation which impacted eight times as many people as these changes do and lowered the contribution tax threshold without indexation. The coalition also continue to try to change the super system to force young people to raid their super for housing. While they present that as something helping young people, it is not. That's not what the superannuation system is for. That is actually forcing younger people to rob their future selves. We saw this in COVID, where that was the first place they sent young people to access money when they needed it. Perhaps, if they actually wanted to support young people through that crisis, they could have made the JobKeeper scheme eligible to casual employees, for example.

This motion is just another example of scaremongering from the opposition and being completely out of touch with the priorities of young people. I know that the young people in my electorate—and my electorate is actually the fourth youngest electorate in the country—want to see a progressive tax system that supports other priorities. (Time expired)

Luke Howarth (Petrie, Liberal Party, Shadow Minister for Defence Industry) Share this | Link to this | Hansard source

HOWARTH () (): Labor members opposite say that Labor built super and they'll always protect it. They love to talk about Paul Keating as 'the king of super' and that Labor are 'kings of super'. The problem is that that's all, until you've got too much of it—then they want to come after your money! On 2 May 2022, the then Leader of the Opposition Albanese said, 'We've said we have no intention to make any super changes.' This is important, because it goes to character. He also said that life would be cheaper under Labor. He also said that he would lower electricity by $275—not once but 97 times! He also said at the Labor campaign launch in 2022 that they would lower mortgages. We've had only 12 interest rate rises since then! In the same month, he said, 'We have no intention to make any super changes.' He didn't just say 'some changes'. Yet earlier this year, less than 12 months after making that promise, the Prime Minister and the Treasurer have announced that they're now making the very changes to super they said they wouldn't make. They're not just increasing taxes a little bit; they're doubling the tax rate if you've got too much money in super.

That's the reality of it. That is what they're doing. The facts are that a 20-year-old today—my eldest son is 20 right now—earning an average wage throughout their life will have a superannuation balance higher than $3 million when they're in their late 60s, meaning they will be hit hard by the doubling of Labor's superannuation taxes. That's a fact. Today Labor once again is trying to pull a con job on the Australian people. It's simply misleading to imply that this is a tax for the top end of town and that it won't affect young people in their late teens or early 20s today.

We all know that a dollar today is not what it'll be worth in 10, 15, 20 or 30 years time. This policy is not indexed, and the previous coalition speaker rightfully said that this tax is a tax on unrealised capital gains. You won't even have to be making money from the asset. They say housing goes up every 10 years. If you've got a house in Sydney or Melbourne and it's worth $1½ million today, it's probably going to be worth $3 million in 10 years time. What's it going to be worth in 20 or 25 years time? You don't even have to sell it. They're going to tax you 30 per cent on the unrealised capital gains. That's the Albanese government. They go on about super. The member opposite has talked about young people. Well, the First Home Super Saver Scheme is one of the best ways for young people to save for a house deposit right now. They can save $10,000—they can salary sacrifice into their super account—and, rather than being taxed at 32½ per cent on every dollar over $45,000, they're taxed at 15 per cent. The First Home Super Saver Scheme that the previous coalition government put in place is a great scheme for young people. All members should be telling young people about it.

But this mob, the Labor Party, voted against it at the time: 'Oh no, the sky is going to fall in and we can't vote for that.' They've left it in place. Go to the front of my website, lukehowarth.com.au, and the first icon there is the First Home Super Saver Scheme. You can do it if you're in a Labor member's seat as well. If you haven't bought a house, get into the First Home Super Saver Scheme, particularly for young people living at home. Salary sacrifice into your super, get your deposit together and then take advantage of the coalition's First Home Guarantee, where you can get into the housing market with a five per cent deposit, and we'll pay the mortgage insurance. Labor don't want to talk about homeownership. They voted against the First Home Super Saver Scheme, and now the Leader of the Opposition is putting forward a policy that we'll take to the 2025 election, allowing super employer contribution to be accessed with a home deposit as well to help more young people—Gen Ys and Gen Zs—get into the housing market. Once again, this mob, the Labor Party, say the sky is going to fall in. The reality is that it's not, because most people will stay in a house for 10 years. They sell their house with a capital gain and they put the deposit back in, and a share of the capital gain. This mob is the Chicken Little mob—not us. The Albanese government need to learn to keep their election promises, because this is nothing short of another broken Labor promise.

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

This is a motion for the books. The Liberal Party is tying itself in knots, trying to be on the side of younger Australians. This is the same party that for decades failed to take any action on the issues that matter to young people, and it is now trying to put itself on the side of younger Australians. What is one of the biggest issues young people care about at the moment? It's climate change. They are so concerned about it that thousands went on climate strikes in cities, suburbs and regional towns across Australia, urging their political leaders to do more to address climate change. What was the response from the former Prime Minister the member for Cook to these demands from these young Australians? He said, 'What we want is more learning in schools and less activism in schools.' Well, there probably could be a lot less activism if the political leaders had the courage and will to act on the things that young people care about. They failed to listen and they failed to act.

The other issue which the member just spoke about is housing affordability. Young people are concerned that they are no longer able to buy a home or rent a place to live. Those opposite presided over a system where housing has become further and further out of reach for younger Australians. They oversaw a decline in social and affordable housing—a decline in the stock of housing supply that was coming on. The one big idea that they had to address housing affordability was to let young people raid their superannuation funds. The experts say that this could actually make the situation worse because young Australians would have less in their superannuation to draw on. Research from the Grattan Institute showed that the poorest 20 per cent of households headed by 35- to 44-year-olds, the group where homeownership is falling fastest, don't have any superannuation. So the coalition's policy of accessing super to pay for housing would primarily help wealthier Australians buy more expensive homes.

That brings me to the motion moved by the member for Moncrieff. She doesn't want to help young Australians by acting on climate change. She doesn't really want to help young Australians with housing affordability. Instead, she thinks this is a silver bullet that will benefit young people. She comes in here opposing a superannuation change that affects those with super balances of over $3 million. What is this change that those opposite are so against that they think it will get them back into the good graces of young Australians? It's a modest tweak to the superannuation system. It currently impacts half of one per cent of superannuation balances. It amends the $3 million threshold for superannuation concessions in a way that strikes the right balance between incentives to save for retirement and strengthening the superannuation system by making it more sustainable over time. 'But what about the future impact?' those opposite say. Well, to put it into perspective, a young person earning $90,000 this year won't get anywhere near that $3 million threshold by the time they retire. In fact, Treasury projects that only the top 10 per cent of earners retiring in 2052 will have a superannuation balance of $3 million or over at retirement.

If those opposite would actually stop and think about it, these changes are precisely aimed at helping younger Australians. We currently have an ageing population. That means we will need to spend more on health and aged care to help support this ageing population. If we don't make the hard choices now to reform, it means younger Australians will be left to shoulder the extra tax burden. This is a modest adjustment to superannuation tax breaks impacting just 0.5 per cent of people. That those opposite—who saddled future generations of Australians with a trillion dollars of debt, who failed to act on climate change and who are failing to address housing affordability—are now in here purporting to be on the side of young Australians, frankly, is excruciating to watch.

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

It's been good hearing Labor members talk about how fantastic this policy change in superannuation tax is, which is why I'm shocked they didn't raise it during the election campaign, because apparently there is so much merit in this, it's such a great idea and it's so obviously logical. But how many times did they mention it before the election, when they were asking the people of this country to put them into government? Never—not one single time. In fact, worse than that, the now Prime Minister game an ironclad guarantee that he would not make any changes to the tax treatment of superannuation. According to those opposite, this policy is so fantastic and so logical and makes so much sense—apparently it's good for old people and young people—that they never mentioned it once during the election campaign. What an oversight of the tactics committee! They could have won even more seats by telling the people of this country that once they got in they were going to start coming after their superannuation.

I remember well the campaign and talking to people about superannuation, and some did say: 'Look, we know Labor have learnt a lesson when it comes to chasing superannuation. Bill Shorten lost the last election because he was going to come after our super, James, and there's no way, no risk whatsoever, that Labor will repeat the mistakes of the 2019 election and come after the hard-earned savings that we rely on for security in our retirement. Anthony Albanese has committed not to do that.' Well, surprise, surprise: a broken promise! Surprise, surprise: it's at the first opportunity after an election, not before the election. Don't go being honest with the people of this country, Madam Deputy Speaker, and actually tell them what you're going to do when you get in. Instead, promise you won't do something, get elected and then break that promise by introducing a raid on the retirement savings of hardworking Australians. It is appalling and it is disgraceful. Now we've got the suggestion that it's a modest change. The 'modest change' is doubling the tax rate from 15 per cent to 30 per cent. That apparently is modest.

We've also heard speakers say it's going to affect only 10 per cent of young people—only one in 10 people. Apparently, if you're successful and you're in the top 10 per cent of income earners as a young person, the Labor Party think you need to be punished. You've done something wrong. You need to pay a lot more tax because you went out and were successful. You did something with your life. Yes, you made money and, yes, you've paid your fair share of tax through a whole range of other taxes that are dramatically higher on high-income earners, but let's just punish you that little bit more. Let's just add the sting to the tail so that in your retirement you again pay a disproportionately high amount of tax. According to the Labor Party, 10 per cent of people deserve to be taxed that bit extra, because Labor are about the politics of envy. They don't like these people, because they've been successful. And, of course, they love raiding that superannuation nest egg.

The poor old member for Maribyrnong was honest. He told the people of Australia, 'We're coming after your super.' The problem there was that the Labor Party lost an election over it. So the now Prime Minister was much more clever than the member for Maribyrnong. He said: 'I'll show you how it's done. What you do is tell the people of this country you won't tax their super, get elected, and then, after the election, start raiding their retirement savings. That's the trick.' The poor old member for Maribyrnong has learnt a very important lesson from the Prime Minister: don't tell the people of this country the truth.

An op position member interjecting

I'll take the interjection about the trillion-dollar debt. You should have been here for one of your other speakers, who advocated that we should have spent more than we did on JobKeeper. Madam Deputy Speaker, we now have members of the government who are saying we should have spent more on JobKeeper and, in the same argument, complaining about the debt left behind from JobKeeper. Talk about hocus-pocus accounting! Talk about magic pudding economics! Apparently we should have spent more during the pandemic on JobKeeper and not incurred debt in doing so. It says it all about the mathematical capabilities of those in the government.

I will finish on this: it is absolutely appalling and outrageous to go to an election saying to the people of this country, 'We will not touch your superannuation or change the provisions that you've made for it,' take their votes, get elected and then break that promise at the first opportunity.

Tania Lawrence (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Moncrieff for the opportunity to speak on the subject of superannuation. Universal superannuation is a proud achievement of the Hawke and Keating Labor governments, and it came into being in 1992. The member for Moncrieff's concern for young workers, demonstrated by her motion, is, I hope, a measure of her strong support for universal superannuation and for the rights of young workers, because back in 1992 the former member for Moncrieff, Kathy Sullivan, and the rest of the coalition members voted against universal superannuation. They were wholly opposed to the point where the then member for Bradfield, Mr Connolly, stood up in this place on 5 May 1992 and spoke on the third reading of the bill, saying, 'This is simply a sordid deal between the government and the ACTU.' Further, he said it was only the Liberal and National parties who would stand and demonstrate that 'compulsory superannuation legislation of this nature is fundamentally flawed'. He referred in his speech to the year 2020 and stated that the legislation would not address the fiscal challenge of a greying society.

Well, here we are in 2023. It is worth considering just how much superannuation an ordinary 20-year-old worker, to refer to the member's motion, would have had in their superannuation account today if the coalition had managed to prevail in 1992 and thereafter. The 20-year-old would be 51 years old today. I'm not 51 myself yet, but it's a pretty familiar age to many people here. How much would that 51-year-old have in their superannuation? Nothing, nil, zip, zero. Fortunately Paul Keating and Labor did prevail in 1992, and as a result the average 51-year-old worker today has a super account of hundreds of thousands of dollars and growing, because compulsory superannuation isn't fundamentally flawed, as the coalition bleated in 1992; it's excellent. Australians now have a total of over $3.5 trillion invested in superannuation, and our retirement savings system is the envy of most of the world.

Before the member for Moncrieff brings motions into the House on the subject of superannuation, she might want to consider her party's hopeless record in this area. Obviously, and as the Treasurer has stated on this matter, future governments and parliaments will have something to say about super. If an average 20-year-old today is looking at a super balance of $3 million some 40 years down the track—and that would be a good thing, although I don't think the member's maths will stack up—then future governments will need to consider what to do about that. This motion isn't about deep-seated concern held by the coalition for retirees in the year 2063; it's a furphy. This motion is all about the coalition scrabbling about fiercely to arrest the slide of their vote among young Australians right now, in 2023.

The ANU found only one in four people under the age of 40 voted for the coalition in 2022, the lowest percentage since their records started in 1987. At the election a year ago, young voters took a good, hard look at the coalition and emphatically said no. They said no for lots of reasons. I'm sure very few of them were thinking about their retirements in the 2060s when they voted. The reasons young voters turned away from the coalition are, according to the surveys, climate change, integrity in politics, cost of living and housing—all areas where the new government has been very active. Just a few days ago the Prime Minister announced a further $2 billion for social and affordable housing, because regardless of Liberals conveniently ignoring the government's mandate and the Greens simply ignoring reality, we have a mandate to act on housing, and we are acting.

To return to super, what young people might like to consider in their area of super is just how much the coalition has in fact cost young people through their delays in increases to superannuation guarantee. The delays occasioned by coalition governments—about seven years worth of delays over the past decade—must have reduced the eventual super balances of young people by tens of thousands of dollars. Further, we have enacted payday super to take effect from July 2026. The coalition were told about the need to take action on unpaid super way back 2015 by the National Audit Office. They were told that 690,000 Australian workers were being dudded to the tune of $2.6 billion every year, and they squibbed it. It must have cost young workers thousands since then. Labor has acted. We on this side are very happy for the coalition to keep bringing motions on superannuation.

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

There being no further speakers, the debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.