Anne Webster (Mallee, National Party, Shadow Minister for Regional Development, Local Government and Territories) Share this | Link to this | Hansard source

This bill, the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill , is about realisation. The Treasurer came to the realisation, after a strong campaign by those of us on this side of the House, the Nationals and the Liberals, that taxing unrealised capital gains is wrong. The Treasurer had it in his head that it would be okay to tax people on income they hadn't yet earned. In regional electorates represented by the Nationals, this would have hurt family farms first. The Treasurer claimed the impact on family farms would be minimal, but the National Farmers' Federation, thanks to the University of Adelaide's modelling, estimated that 3,500 farms would be affected. But critically, had the $3 million threshold not changed, another 14,000 farms would have been affected. Further, some 13,000 small-business owners would have been potentially affected by the Treasurer's initial tax plans.

On the farming front, let me put it in simple terms for those opposite. I am not sure that they want to understand. If your farm value goes up, your income doesn't necessarily go up. You don't get extra income as a farmer because land prices are going up. You are dependent on the weather, on commodity prices, on input costs which have risen, on logistical shocks, as we saw during the pandemic—and, indeed, might see shortly on fuel prices; in fact, today it's true—or on the vagaries of importing countries, such as, currently, Indonesia, with their sudden reduction on quotas for the importation of globe grapes from my region, leaving many table grape growers in my region reeling, with tonnes of grapes that have no home.

An increase in farm value does not mean you are earning more income. I just have to repeat that for those opposite, as they are slow to understand. Unlike residential property in metropolitan areas, it may not be practical, necessary or desirable to soon realise a capital gain purely because the land prices have gone up. Generational farming doesn't think or act like playing the property market. Yet again, Labor could not care one iota about how their policies play out in regional Australia.

But then, maybe through the Prime Minister's office or maybe thanks to polling, the realisation dawned on the Treasurer that taxing unrealised capital gains was actually a dopey idea. Had the Treasurer had his way, Australia would have been the first nation in the world to tax unrealised capital gains in this way. Even the Democrats baulked at the idea in the USA.

Straight after the election, the Treasurer said Labor's unrealised capital gains tax grab was 'an important way that we fund some of our other priorities'. Let me digress for a moment to say that those priorities are not in Mallee. About $87 million in grants, about one-third, have been stripped from Mallee over a comparable three-year period of coalition government versus the Albanese Labor government. Labor tried to pretend their unrealised capital gains policy was modest, but the Parliamentary Budget Office belled the cat. The first year of their policy was going to yield $300 million, but within 10 years Labor would have been rolling in $7 billion per annum taken from retirement nest eggs—Australians' hard earned super.

Speaking of realisation, Mallee voters are an intelligent bunch. I asked this question in Mallee's biggest survey last year: are you worried about higher taxes and the taxing of unrealised gains on retirement savings or superannuation? Guess what? Over 86 per cent of my voters said yes. My theory is that Labor just don't believe in private property ownership. Everywhere you look, they're attacking personal assets. How do the Marxist sayings go? Seize the means of production. The proletariat seizes the property of the bourgeoisie. Labor think they're so clever, masking socialism in tricky marketing and salami-slicing away property ownership and retirement nest eggs slice by slice by slice.

Everywhere you look, when you look at those opposite, there is faith in government and nothing else. There's no faith in our farmers, no faith in small business, no faith in families, no faith in individual liberty. The government knows best. What did George Orwell call it? Oh, yes—Big Brother. In the Treasurer's economy, the government manages everything and has its fingers in every pie. Arguably, the Treasurer has strayed from the teachings of his political master, Paul Keating, who built the compulsory superannuation system. Perhaps it was the former treasurer's intervention opposing unrealised capital gains that sealed the deal—that the idea was in fact a very bad one.

Another realisation that my Mallee constituents know all too well is that Labor loves to run a consultation while everyone's on holidays or, indeed, while southern cropping farmers are busy with harvest. Consultation on this bill occurred over December and January, true to form, almost as if it's designed to garner minimal opposition and sail through parliament.

One big bone of contention with Labor's retirement tax grabs was also the lack of indexation of the $3 million threshold. At long last, after a sustained campaign from the coalition, the thresholds will now be indexed. Again, Mr Keating had noted that a young person today on average earnings would easily have more than $3 million in their retirement. The failure to index the figure was an affront to aspirational Australians. Indeed, Mr Keating had said that people contributing 12 per cent compulsory superannuation from 1 July 2025 would have balances over $3 million at retirement, which 'would reduce the call by the age pension on the Australian budget to two per cent of GDP in the 2050s.' On that front, I note the Association of Superannuation Funds estimates that, by 2050, half of all Australians will be fully self-funded in retirement, which, they estimate, keeps the pension burden at 2.1 per cent of GDP.

Is the Treasurer that out of touch with cost-of-living concerns and so desperate for money for a flailing budget that he persisted, until taken to task last year, with unrealised capital gains and refusing threshold indexation? Is he so out of touch he had to be taken to task by his leadership team, the Prime Minister or both? Somehow, during a cost-of-living crisis, the Treasurer thought it would be okay to tax farmers on paper gains only. Had that idea proceeded, farmers would have had to sell off parts of their farm to meet their unrealised capital gains tax liability each year. Farmers use self-managed super funds to prepare for the future, yet Labor—as they love to do—were planning to shift the goalposts to raid retirement nest eggs. That's one reason the coalition is vigilant about elements of this bill that might unfairly punish those who worked hard to prepare for their retirement.

The Nationals have been on the case for years. The first time was when the Treasurer came up with this thought bubble during 2024. I called it out in January 2024 as a broken promise from before the previous election. It was a new tax grab. It was Shorten-esque in its brazen nature. Labor had promised it would not make major superannuation changes in 2022, yet there they were, in 2024, proposing taxing unrealised capital gains. In November 2024, I called out how the plan to tax unrealised capital gains on self-managed super funds over $3 million was a disaster, and we on this side of the House kept on the case through the election campaign and beyond. Time and again, Labor act like feudal lords, treating farmers like peasants who really don't own their assets. They entice corporate raiders to take slices of the farm for transmission lines, energy or mining projects, or they eye off the farm nest egg that farmers have set aside for tough seasons.

Speaking of which, Mallee has been through some tough times of late, as has broader western Victoria. Labor was advocating this tax grab during both a cost-of-living crisis and drought conditions in our area. Worse still, Labor couldn't coordinate whether Albanese Labor or Allan Labor would hit farmers for money during a drought, so, true to form, they both went after the farmers. Albanese's Labor was after farmers' unrealised capital gains at the same time the Allan Labor government had the idea to jack up their so-called emergency services volunteer levy from the same farmers. Country Fire Authority volunteers have said 'not in our name'—in other words, 'Don't use us, as volunteers, as a basis for tax.' There are effigies of CFA volunteers with gratuitous advice for Ms Allan all over my electorate. I might say that today we hear that the Allan government has now put on hold the ESVF tax for three years. There must be an election coming! That's how on the nose the Labor brand is in Mallee. I could mention the sneaky con job they pulled on a $5 million childcare promise in Loddon shire when the money was going to Wedderburn for a two-year-old promise all along, but I would be straying off topic.

Let me explain why the Nationals are eternally vigilant in this area of retirement taxation. The sorry tale of Labor's chase of unrealised capital gains demonstrates that, in their core DNA, Labor do not understand the regions and are coming for family trusts next. It took a sustained opposition campaign to demonstrate that the Australian public do not support hitting hardworking Australian families' retirement savings. Labor will be back chasing your assets in the community, and the Nationals will remain eternally vigilant to protect the farm and hard earned retirement savings. The Nationals will always stand up for our farmers and farming communities, and that includes their assets. In fact, I look forward to the debate on whether Labor have snuck in a cunning death tax under their revisions to the consultation draft. We are always on the lookout for Labor's sneaky ways of punishing Australians for their hard work and for putting assets away for the future or for future generations.

The coalition supports the LISTO, the low-income superannuation tax offset, as it is a tax cut. However, I have to flag that it offers no immediate cost-of-living relief. The LISTO will boost superannuation balances for the future, not working families' pockets here and now, and that is a problem. All the people in regional Australia are fed up with not being looked after by the Labor government and with them coming after these unrealised gains. Capital gains are, generally, not in their interests, and they are very well aware of it.

Carina Garland (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

So far we've had a couple of rather strange contributions from those opposite. It is disappointing, but not surprising, that those opposite have been less than wholehearted in their support for a fairer superannuation system, given that, at every turn, they have taken an approach that finds the idea of every Australian having dignity in retirement to be quite a radical idea. On this side of the House, we are the party of superannuation. It was Labor that established this system, which is the envy of the world, and, as Australians, we should all be very proud that we have such a system.

I commend the changes in the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill and the Superannuation (Building a Stronger and Fairer Super System) Imposition Bill to the House. As the Albanese government members are fond of saying, myself included, we want Australians to earn more and to keep more of what they earn. The changes here make that possible, in addition to all of the other reforms our government has implemented to make that so. I'm sure this is a statement you've heard many times in this place, and it is something that we really do mean. We build on that mission today through helping low-income workers keep more of their superannuation whilst making the system stronger, fairer and more sustainable.

We're making super fairer in a few different ways. We're doing this through boosting the low-income superannuation tax offset, LISTO, and making a number of important changes to better target superannuation concessions for large balances. We're going to increase the LISTO by $310 to $810 and raise the eligibility threshold from $37,000 to $45,000 from 1 July 2027. This will help deliver a more secure retirement for 1.3 million Australians, of whom around 60 per cent are women, with the total number of Australians eligible for LISTO increasing to 3.1 million. Something our government has been very proactive and focused on, through both of our terms of government so far, is addressing the gender pay gap and inequality, and that includes inequality in retirement. This is a really important measure to ensure that we are doing what we can to close that gap even further, in addition to a number of other changes we've already made.

The changes we're making will ensure low-income workers receive a fairer tax concession on their superannuation contributions, to align with the government's third round of tax cuts that will take effect next year, in 2027. This will benefit all workers with incomes between $28,000 and $45,000, with an average increase of $410 in the LISTO payment. These workers could receive a potential benefit at retirement of around $15,000, depending on an individual's income over their career. We know how important that compound interest is when it comes to superannuation, which is why it's important for younger generations too that these changes come into effect—so that they are not disadvantaged as they get older and so that they have the opportunity to accumulate that interest on their superannuation for their retirement.

This is real cost-of-living relief. That's what we're really focused on, on this side of the House. I do find it interesting that those opposite have played games already, in the short time we've been having this debate. When given the opportunity to ask questions in question time about the economy, they have neglected to do so, letting their constituents down, which I think is an appalling shame.

We are making these changes here today as part of our plan to help low-income workers earn more, keep more of what they earn and retire with more too, so that every single Australian can have a dignified retirement. We're also making a number of practical changes to the design and implementation of our policy, to better target superannuation concessions.

These are sensible changes which take two years of feedback into account, while still maintaining the main objectives of our policy. I'm really grateful for the feedback that I've received from my community in Chisholm, and I thank everyone who has taken the time to raise issues with me and enabled me to speak to my team here about ways that we can work through those issues and find ways to deliver reform, which is exactly what the Prime Minister and the Treasurer have done. We are a government that listens, first and foremost, and we act on the feedback we get from our community.

We're going to introduce a second threshold to better target superannuation concessions on the earnings of large balances above $10 million to make those concessions even more targeted. We're also going to index the large-balance thresholds of $3 million and $10 million, apply these changes to realised earnings and push back the start date by one year to consult on final details and prepare legislation. Again, we are a consultative government who listens to our communities. The original model that was presented was the best option identified at the time, but we have taken the decision as a government to adjust the model to recognise the views we've heard since then. It is good that Australians have a government that is responsive, that listens, that is not stubborn and that adjusts to the views and the changing circumstances of the world.

With these changes, we are continuing to deliver on our longstanding commitment—which we took to the last election—to better target superannuation concessions. Our policy to better target superannuation concessions for large balances will continue to affect less than 0.5 per cent of all Australians in 2026-27. It maintains the concessional treatment of superannuation for all taxpayers and makes superannuation tax concessions more targeted for those with large balances. These changes, along with the LISTO reform, will substantially improve the fairness and sustainability of our superannuation system.

Today's changes mean that, from 1 July 2026, the total concessional tax rate applied to earnings on balances between $3 million and $10 million will be 30 per cent. The total concessional tax rate applied to earnings on balances over $10 million will be 40 per cent. Both the $3 million and $10 million super balance thresholds will be indexed to maintain relativity with the transfer balance cap that was introduced by the coalition. As part of these changes, we will also adjust the earnings calculation so the concessional tax rates on large balances will only apply to future realised earnings. Treasury will consult on the implementation details, including the best approach to the calculation of future realised gains and attribution to individual fund members. We will apply commensurate treatment to defined benefit interests to ensure equivalent impacts, with Treasury again to consult on implementation details. We will extend the existing exemption for some judges to improve consistency across jurisdictions. This is a small change to respond to the latest legal advice and ensure more neutral treatment. We'll be providing additional support for low-income workers through LISTO, and that will cost around $435 million over the forward estimates.

The net impact on the budget of these changes is a cost of around $4.2 billion over the forward estimates, a large part of which is due to that one-year delay. In the first full year of operation—that is, 2028-29—the package will provide a saving to the budget of around $1.6 billion in net terms, including the cost of increasing the LISTO. Final costs and budget impacts will be accounted for in the 2025-26 Mid-Year Economic and Fiscal Outlook. We know that the super tax concessions at the moment cost the budget more than $55 billion per year, and we know looking forward that that will exceed the cost of the age pension as we get into the 2040s. What these reforms do is maintain the concessional treatment of superannuation, but they also ensure that that is provided in a more equitable and sustainable fashion. We know, looking at the figures, that there are 14 times as many people who will benefit from this boost that we're making to LISTO as there are people with over $3 million in super.

I'm really proud to be part of a government that continues the proud legacy of Labor in making our superannuation system stronger, fairer and more sustainable. As I mentioned at the outset, and as I've mentioned a number of times in this place, the Labor Party is the party of superannuation. It recognised the importance of every Australian having access to dignified retirement. What we're doing here is increasing the LISTO. We're better targeting superannuation concessions. That's in addition to paying superannuation on paid parental leave and introducing payday superannuation, which are going to make a real difference in the lives of so many Australians, including, I know, many in my own community. Those changes, as well, will particularly affect young people, those in insecure work and women workers. So, again, there are a number of ways that we are improving the equity in this system for all Australians. We have increased the superannuation guarantee, and we've legislated the objective for superannuation.

Australians are continuing to earn more and keep more of what they earn under our government. Now they'll be able to retire with more too. This is the latest part of our suite of reforms to make sure that we have the best superannuation system, the fairest superannuation system and the most sustainable superannuation system that we can in this country. On that, I commend this bill to the House.

Monique Ryan (Kooyong, Independent) Share this | Link to this | Hansard source

Australians are proud of our superannuation system. As a nation, we have one of the most sophisticated and modernised retirement income safeguards in the world, a system designed to guarantee dignity for older Australians. Generations of Australians will finish their working lives knowing that they are financially secure because of their superannuation. Our system is not only strong; it is also robust and sustainable. Despite projections that the number of Australians aged 65 and over will double in the 2060s, the value and size of our superannuation pool means that the percentage of Australians receiving the age pension will continue to decline.

When the Keating Labor government legislated our system of compulsory superannuation in 1992, it did so in the country's best interests, with a focus on fairness, sustainability and equity. In 2024, we legislated to enshrine those values. We affirmed in this place that the objective of superannuation is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way. In 2026. I'm pleased to see the Albanese government listening to the crossbench calls over several years now to ensure that these super reforms maintain that focus on equity and sustainability.

The bills before the House, the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 and the Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026, will make two significant changes to the tax treatment of superannuation. The first will adjust tax thresholds on realised superannuation earnings. The second will ensure that people in the lowest income tax brackets receive a genuine tax concession on their super contributions.

When these measures were first brought to the House in 2023, they provided for the taxation of unrealised superannuation earnings for balances exceeding $3 million. It was my belief that that legislation in 2023, had it passed, would have represented a policy failure. In 2024, I supported an amendment to that legislation to prevent the taxation of unrealised capital gains, and I noted then that the government's changes would have been a departure from the traditional capital gains treatment in this and other OECD nations in which taxation applies only on realisation. I warned then of the potentially chilling effect of those changes, about which I'd heard from a number of constituents, on small businesses, on farmers and on venture capital funds.

Australians need and deserve certainty in their financial decision making. They invest in superannuation in good faith, believing that it is the best investment vehicle for their long-term savings. That certainty would have been threatened by the legislation that we saw in 2023. I was also concerned then that the initial legislation didn't provide for indexation of the $3 million threshold at which balances would be subject to the 15 per cent tax. It was my belief that this policy would have unfairly impacted young Australians when their balances eventually exceed $3 million, which seems like a fantastic sum to many now, but it won't in 20 or 30 years time. So I'm really glad to see the government heed calls from the crossbench and from many in our communities to ensure that reforms to our superannuation system are generally fair and generally targeted.

These bills will reduce tax concessions for individuals with total superannuation balances above $3 million. From the 2026-27 income tax year onwards, the concessional tax rates will be an additional 15 per cent on the proportion of realised earnings accrued between $3 million and $10 million and an additional 25 per cent for the proportion of realised earnings accrued above $10 million. Those are still—let's face it—concessional tax rates. Our super tax concessions still go well beyond what is required for a dignified retirement. These bills will result in only modest decreases in the concessionality of superannuation. It will still remain a tax-efficient vehicle for retirement. By the government's projections, these bills will impact fewer than 0.5 per cent of Australians with superannuation accounts in the 2026-27 financial year. The rates on balances above $10 million will affect less than 0.1 per cent of Australians with superannuation accounts. Together, it's projected that, for the moment, these changes will affect only about 90,000 Australians. For that small proportion of Australians who are impacted by these new settings, the financial impact is limited. A person with a $3.2 million balance, with $125,000 in realised investment income, will only pay an additional $1,171 in tax. This increase does seem fair and appropriate.

The second change brought about by this legislation also promotes greater fairness in superannuation. The LISTO is a government payment that offsets the 15 per cent tax on concessional contributions to super for eligible low-income earners. It ensures that those in the lowest income tax brackets still receive a genuine tax concession on super. The LISTO is effectively about fairness. It's particularly fair for those people earning less than $18,200, who are not liable to pay tax on their wages but who would otherwise be required to pay 15 per cent tax on contributions to super. Currently, to be eligible for the LISTO, individuals must have a taxable income of $37,000 or less. The Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 will expand LISTO eligibility to the upper threshold of the second-lowest tax bracket, meaning that Australians earning up to $45,000 will receive genuine tax concessions on their super. This change is predicted to improve outcomes for approximately 770,000 people who were previously not eligible for the payment. That's actually one in 20 Australian workers.

The bill makes sensible changes to the maximum LISTO payment as well. Currently capped at $500, many eligible recipients of the LISTO reach that maximum refund. The maximum LISTO will now be linked to the super guarantee so that tax paid on concessional contributions is offset for eligible low-income earners. Together, these changes will increase government payments for about 1.3 million people on the lowest wages. It's estimated that 35-year-olds on lower wages earning $44,000 will be about $51,000 better off in retirement because of these policy changes, and, for those individuals, these changes will be life-changing.

Together, these bills improve the overall fairness and sustainability of Australia's superannuation tax settings. They make our system more equitable, more targeted and more aligned with the legislated purpose of our superannuation system. But it would be a mistake to pretend that our work on intergenerational tax inequity is complete with this bill. Young Australians are still facing unprecedented economic barriers, from housing affordability to insecure work, to slow wage growth and to the rising costs of education and health care.

Our tax system continues to entrench these inequities. It delivers disproportionate concessions to already wealthy Australians, while younger Australians are struggling to build financial security. The reality is that intergenerational inequity remains baked into our tax system. Reforming superannuation tax settings is an important step, but it's only a first step. A broader review of tax concessions across the system, including negative gearing, capital gains and the distributional impacts of various offsets and deductions, remains essential to ensuring a genuinely fair and modern tax system.

The discounting of the capital gains tax in 1999 marked the beginning of the time when house prices really began to soar in relation to income in Australia. That tax discount is now projected to cost the budget $247 billion in foregone revenue over the coming 10 years. The top one per cent of taxpayers will receive nearly 60 per cent of this benefit this financial year. While the horse might have bolted in terms of slowing the increase in house prices, the capital gains tax discount has been demonstrably too generous. It has driven inequity, distorted our housing system and demonstrated poor value for money in terms of growing housing supply. That's why I'm actively consulting with my community in Kooyong on these broader tax issues.

In recent decades, productivity has flatlined and the improvement in living standards that we've come to expect each successive generation to enjoy has stalled. While older Australians have benefited from more generous tax settings on property and superannuation, those who are dependent on income have faced an increasing tax burden exacerbated by the bracket creep that confiscates a higher amount of their largely static incomes. Young Australians are finding it almost impossible to get into the housing market unless they benefit from intergenerational wealth transfer—effectively, help from the bank of mum and dad—and those who are paying tax on work rather than on wealth are bearing too much of the burden for federal spending on programs like AUKUS, the NDIS and other parts of the care economy that will soon reach 27 per cent of GDP.

The government has foreshadowed possible changes to the capital gains tax discount in the May budget. Winding back capital gains tax exemptions and capping negative gearing would go some small way towards addressing intergenerational inequity in our tax system, but these changes have to be part of a more ambitious tax agenda. We need to reform the personal tax system to decrease tax reliance on wages and salaries. We should improve taxation of businesses to promote investment. We should talk about the GST and how it is distributed, and we should charge those responsible for climate change instead of subsidising polluting industries with fuel rebates and failing to adequately tax our oil and gas exports.

This government spends five times more subsidising the diesel fuel tax credit than it gets from taxing gas exports. It collects more money from students paying HECS than it does from gas companies paying the petroleum resource rent tax. The government collects more from taxing beer and from taxing cigarettes than it does from taxing our gas exports—that is confounding. It is robbing Australians of their futures while it is rewarding multinationals by giving away our finite natural resources.

We have to do a whole lot more to urgently address intergenerational inequity. These superannuation changes go some small way towards that, so I support them, but they're very small steps on a very long road. There's a whole lot more that we need to do to reshape our economy for the next generation. In the meanwhile, I commend the bill to the House.

Cassandra Fernando (Holt, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026. Labor is the party of superannuation. It was Labor prime ministers Bob Hawke and Paul Keating who had the courage and foresight to create universal superannuation through the Prices and Incomes Accord. At the time it was a bold and contested reform, but it was grounded in the simple belief that working Australians deserve dignity and security in retirement—not uncertainty, not poverty and not dependency.

What began as a three per cent employer contribution has, through steady and responsible reform, grown to a 12 per cent superannuation guarantee as of 2025. That increase represents one of the most significant structural improvements to retirement incomes in our nation's history. For communities like mine, in Holt, this is not abstract policy; it is real life. Holt is one of the youngest and fastest growing electorates in the country. Families in Cranbourne, Narre Warren South, Hampton Park, Lyndhurst, Clyde, Tooradin and Pearcedale are working hard to build a better future. Many are first home buyers. Many are migrants who came to Australia seeking opportunity and stability. They are young parents balancing work and family. They are nurses, aged-care workers, retail staff, warehouse employees, early childhood educators, construction workers and small-business operators. They are not thinking about complex tax structures. They're thinking about paying the mortgage, covering childcare costs and making sure their kids get ahead.

Superannuation is about making sure that, when those hardworking Australians reach retirement, they can do it with dignity. This Labor government has acted to make the superannuation system fairer and stronger. One of the most significant reforms we have delivered is paying super on paid parental leave. For too long, women have retired with significantly less super than men—currently around 25 per cent less on average. That gap is not a coincidence. It reflects structural inequalities, time taken out of the workforce to raise children, part-time work, lower average wages and unpaid care responsibilities. In Holt, where so many young families are growing, this reform will make a tangible difference. A mother taking time off to care for her newborn should not be financially penalised decades later. By paying super on paid parental leave, we are recognising that care work has economic value and we are ensuring women are not left behind for starting a family. Over a lifetime, this reform will leave women tens of thousands of dollars better off in retirement.

We have also legislated an objective for the superannuation system, something that was first proposed in 2016 by the Turnbull government but never legislated. The superannuation objective strengthens the system against short-term political interference and ensures that any future government seeking to change super must justify those changes against a clear statutory objective. That objective is straightforward—to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way. Every reform in this bill is consistent with that principle.

We are also implementing payday super. Historically, some workers have waited months for their superannuation to be paid. Some have discovered years later that it was never paid at all. That is unacceptable. In parts of my electorate, such as Cranbourne West, we have major industrial and commercial precincts. The overwhelming majority of businesses do the right thing, but honest employers should not be undercut by those who delay or avoid paying workers their super. Payday super will ensure that super contributions are paid at the same time as wages. This will reduce unpaid super, improve compliance and allow workers' balances to begin compounding earlier. For a 25-year-old worker, earlier and more frequent contributions can mean thousands of dollars more at retirement. This is the power of compounding, and it is why timely payments matter.

We are also strengthening transparency and accountability in the system through improved reporting requirements and mandatory service standards. Australians deserve confidence that their retirement savings are being managed efficiently and responsibly. Australia's superannuation system is globally recognised as world leading. It is already the fourth largest pool of pension assets in the world, and it is projected to become the second largest by 2031. This is not an accident; it is the result of deliberate long-term policy design. Australia is the only OECD country where age-pension spending as a share of GDP is projected to decline over the long-term, from around 2.5 per cent today to approximately 2 per cent by 2060. By contrast, the OECD average for public pension spending is around 9.3 per cent of GDP. That is long-term fiscal sustainability.

This is Labor's responsible economic management. But maintaining that sustainability requires long-term planning. Time and time again we have seen the coalition use superannuation to fix short-term political issues rather than as a long-term economic asset. Under the previous coalition government, approximately $36 billion was withdrawn from the superannuation accounts through the COVID early-release scheme. While many Australians faced hardship during that period, the long-term impact of those withdrawals is significant. Thanks to the coalition, A 30-year-old who withdrew $10,000 could be more than $150,000 worth worse off in retirement. Hundreds of thousands of young Australians substantially depleted or emptied their super balances. Superannuation is not designed as a short-term stimulus tool. It is deferred wages, savings set aside to provide income in retirement. Treating it as a quick fix, as the Liberal Party does, undermines its purpose.

The superannuation system is built on a deal between workers, employers, unions and government. Workers contribute through deferred wages. Employers contribute through the superannuation guarantee. Government supports the system through concessional tax treatment.

The concessional 15 per cent tax rate is fundamental. It incentivises saving and allows balances to grow more quickly than they would in a standard savings account, but concessional must be sustainable and targeted to the system's objective. Today, fewer than 0.5 per cent of Australians have a super balance above $3 million. For those individuals, even under minimum drawdown rates, they would be expected to receive $150,000 per year tax free in retirement income. Under this bill, there are no changes to tax arrangements for balances under $3 million. Earnings on balances above $3 million will be taxed at 30 per cent. For balances above $10 million, the rate will be 40 per cent—still below the top marginal income tax rate of 45 per cent. These changes are modest. They affect only the wealthiest fraction of account holders and they ensure that superannuation remains focused on delivering retirement income, not functioning as an unlimited tax advantage wealth accumulation vehicle.

Importantly, the revenue raised from these reforms will strengthen support for low- and middle-income workers. We are boosting the low-income super tax offset, the LISTO. We will increase the eligibility threshold to $45,000 and lift the maximum payment to $810. This will benefit more than three million Australians. In Holt, that includes early childhood educators in Narre Warren, retail workers in Cranbourne, hospitality staff in Hampton Park and aged-care workers right across my community. These are the people who keep our local economy running. Many are women. Many work part time. Many earn modest incomes while juggling family responsibilities. Analysis from the Super Members Council suggests that women will make up around 60 per cent of those benefiting from this reform, with some projected to be up to $60,000 better off in retirement after their working lives. That is real progress in closing the retirement gender gap. These reforms are about fairness. They reduce excessive tax concessions for the wealthiest 0.5 per cent. They strengthen retirement savings for millions of low-income workers. They protect the long-term sustainability of the system. They keep superannuation true to its purpose, delivering income for a dignified retirement.

I want to acknowledge the leadership of the Treasurer, Jim Chalmers, and the Assistant Treasurer, Daniel Mulino, through their work on this legislation. This bill reflects Labor values: fairness, responsibility and long-term thinking. In communities like Holt, where families are building their futures, where young workers are starting their careers and where parents are planning for their children's security, superannuation matters. It matters that the system is strong, it matters that it is fair and it matters that it is sustainable for generations to come. I commend this bill to the House.

Kate Chaney (Curtin, Independent) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 and the Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026. When I spoke on these bills previously, I said that I supported their intent—to ensure our superannuation system is designed for people to prepare for a dignified retirement, not as a tax break for the super wealthy. I also raised three key concerns from my community that prevented me from supporting the bills at that time.

The bills didn't pass through the Senate in the last parliament and have come back now with some amendments, and I'm pleased that the government has now acted on all three of the concerns that I raised last time. The government has ensured that tax will only be applied to realised gains, has committed to indexing the new thresholds and has delayed the implementation date, although I note that this remains an area of some concern. With these changes, I'm satisfied that the bills now meet the intent in a targeted and fair way and, as such, I will be supporting them.

Firstly, I will speak on the intent of the bills. Tax concessions exist in superannuation to compensate people for putting their hard-earned income away for their future. In recognition of this, super contributions are taxed at 15 per cent, significantly lower than income tax rates, which range from 16 per cent up to 45 per cent. But some very wealthy individuals already have far more in super than they need for even the most luxurious retirement and yet they continue to receive the same concessional 15 per cent tax rate.

The purpose of super concessions is to support hardworking Australians saving for their future, not to subsidise wealth accumulation for those who are already extraordinarily well off. Every tax concession costs the budget, and therefore the Australian people, through reduced government services or higher taxes elsewhere. We have a responsibility to ensure that these concessions are appropriately targeted. This bill reduces tax concessions for those with significant super balances. For every dollar contributed to super, up to $3 million, the concessional 15 per cent tax rate will continue to apply. Above $3 million, contributions will be taxed at 30 per cent—still well below the top income tax rate of 45 per cent but less of a concession than before.

The bill also introduces a $10 million threshold. Contributions above $10 million will attract a 40 per cent tax rate. Again, this remains concessional. Only 0.5 per cent of Australians have more than $3 million in super. Just 8,000 Australians hold more than $10 million. These are extremely high balances. In the wealthiest suburbs of my own relatively wealthy electorate, Cottesloe and Peppermint Grove, the average super balance is just over $500,000, which is still only a sixth of the new $3 million threshold. It's entirely reasonable to expect individuals with very large super balances to receive lower concessions.

When these bills were first introduced, I had significant concerns. The most pressing was the proposal to tax unrealised gains. This was poor tax policy, and a number of my constituents were strongly opposed to it. Taxing people on hypothetical profits before an asset is sold could result in large tax bills in years where asset values spike, even if those values fall later and the actual realised profit is far lower. I'm glad the government listened to the widespread concerns expressed across the community, industry and parliament, including my own concerns, which I expressed in letters, in person and in public. Under the revised bill, only realised gains will be taxed, resolving this issue.

I also advocated for indexing the $3 million threshold. Without indexation, inflation would slowly push more and more Australians above this threshold, even though their real wealth had not increased. One analysis suggested that, without indexation, today's $3 million threshold would effectively become $1 million in real terms for a 30-year-old worker by the time they reach retirement. Indexing this threshold, as well as the new $10 million threshold, is good tax policy and ensures the reform remains squarely focused on the very wealthy. It's worth pointing out here that income tax thresholds should also be indexed. The refusal by both major parties to do so is a farcical example of political game playing, where periodic tax cuts are used to earn popularity, instead of simply indexing tax brackets to prevent bracket creep once and for all.

The third concern I raised was the transition period. People make long-term financial decisions based on the rules that exist at the time, and superannuation, by design, locks up people's own money. We must be extremely cautious about making changes without giving people enough time to rearrange their affairs accordingly. The new bill delays commencement by a year to the 2027 financial year beginning on 1 July 2026. This is an improvement. It still gives only a few months to people to restructure their super if they believe the new settings no longer suit their circumstances and that another structure would be more efficient and appropriate for them.

The bill also includes other changes that I support. The introduction of the new $10 million threshold with a 40 per cent tax rate above that level is reasonable and well targeted, particularly considering that it still remains concessional. The bill unfreezes the low-income super tax offset, or the LISTO, for the first time in 13 years. LISTO ensures low-income workers are not paying more tax on their super contributions than they do on their take-home income. At present, a cleaner earning $42,000 a year receives only a one per cent tax concession on their super, while a senior manager earning $220,000 enjoys a 30 per cent concession. This is clearly inequitable.

Previously, workers earning below $37,000 could receive a LISTO payment of up to $500. This bill increases the eligibility threshold to $45,000 and lifts the payment to up to $810. This is meaningful support for 1.3 million of Australia's lowest paid workers, most of whom are women, so it will also help narrow the gender super gap. The bill also pegs LISTO to the second tax bracket and the super guarantee rate, ensuring it adjusts automatically over time.

It's good to see the government responding constructively to feedback. I commend the Treasurer. This is not a backdown but genuine engagement with community concern.

I want to thank all the constituents who engaged with me on this issue, both in the last parliament and in this one. Superannuation is a vital part of Australia's financial system. It's important that when we make changes we get them right, and I believe we've done that here after some ups and downs. While it would have been better to deal with these issues in an exposure draft, we got there in the end. The government put forward reform, the community and parliament provided thoughtful and reasonable feedback, and the government eventually acted on that feedback to improve the legislation. I commend the bills to the House.

Julie-Ann Campbell (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

The name of the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 speaks directly to core Labor values—values like equal opportunity for all Australians, values such as inclusive economic growth, values that prioritise reducing inequality and ensuring access to essential services like health and education, and values like security and fairness in retirement. The key word here really is fairness, and fairness is at the very heart of this bill which strengthens our superannuation system and makes it more equitable for all Australians.

People all over the world look at Australia's super system with absolute envy because it's a great system. That's understandable. Labor's superannuation system has helped Australians enjoy retirements that are more secure and more comfortable. Put simply, superannuation is at its core and is every day a Labor success story. Labor introduced superannuation, and we're not content in leaving it where we started. We want to make sure that it gets better, that it gets stronger and that it continues in this modern world to support everyday Australians in saving for their retirement. It is successful because it is grounded in principles of fairness, sustainability and the protection of workers' long-term financial security. It is designed to ensure that all Australians can retire with dignity while reducing long-term reliance on the age pension.

To keep that super system strong, it must be equitable. This means that tax concessions and benefits should not disproportionately advantage high-income earners. We know where the opposition stands on superannuation. When the superannuation guarantee was first introduced in this place, the opposition were crying that the sky would fall in. The opposition voted for less super for people on low incomes, and, as Treasurer pointed out earlier today, the shadow Treasurer wants to completely dismantle the system, a system that so many people in our nation rely on. Those opposite don't like super. They haven't liked it from the start. At every single point they have tried to pull it apart, and today is no exception.

Super is not a bonus. It's not an extra. It's part of people's wages, and that's important. This bill strengthens support for low-income earners and reshapes how superannuation concessions work for large balances. The outcomes will be built in a system that is more fair, more resilient and built to last.

I want to talk about the LISTO, the low-income superannuation tax offset, first. It was developed to help low-income earners, many of whom are women, to save for retirement and to make the superannuation system fairer for people on lower wages. It gives extra support to those who don't benefit as much from the concessional tax rate applied to super contributions. For most workers, money paid into super is taxed at a rate far below what they'd pay if that income were taken home instead. But, for people on lower incomes, the usual super tax settings can actually leave them worse off. That's what the LISTO is designed to combat. The LISTO helps fix that by giving eligible low-income earners a tax refund on their super contributions, ensuring they don't end up paying more tax inside their super than they would if they simply received the same amount in their pay packet.

The Albanese Labor government is increasing the LISTO by $310 to $810. We're also increasing the eligibility threshold from $37,000 to $45,000. These changes will come into effect from 1 July 2027, aligning with Labor's third round of tax cuts for every Australian. Depending on their income and how much they contribute, workers will see up to an extra $810 added to their super each year. The average increase to the LISTO will be $410. Over the course of a person's working life, this added support can translate into roughly $15,000 more in retirement savings—a significant boost. For many, it is a life-changing boost.

It's worth taking a moment to look at who will benefit from this boost to the LISTO. In 2027-28, over 770,000 additional Australian workers will be eligible for the LISTO. This is a big change, and it will have a big impact for those who need it most at a time when we know so many Australians are doing it tough. And 490,000 Australians who are currently eligible will receive a higher LISTO payment. Where this is particularly significant is in the number of Australian women who will benefit. Of the 3.1 million Australians who will be eligible for LISTO under this bill, around 60 per cent are women.

Young people will also benefit, with around 500,000 people under the age of 30 receiving the payment. The boost to the LISTO will directly benefit over 100,000 sales assistants, 50,000 administrative workers and over 50,000 workers in our care economy, the hardworking people who support elderly Australians and people with a disability. Just think about those numbers. Over three million Australians will have a boost to their super and a boost to their retirement, comfort and security as they go forward. This is a reform that Labor is justly proud of, because it builds on everything we have done in the superannuation space to date.

The other part of this bill concerns necessary and responsible changes to superannuation concessions—necessary because each year the budget forgoes more than $60 billion in revenue through superannuation tax concessions. By the 2040s, these concessions are projected to cost even more than the age pension. The problem is that these tax advantages are not shared evenly and not shared where people need them the most. A large share of the benefits flows to a relatively small group of people with very high super balances—balances that are far above what anyone would reasonably need for a comfortable retirement. In fact, about 38 per cent of all super earnings concessions go to the top 10 per cent of income earners. More than half of these—54 per cent—benefit the top 20 per cent. This means that the system is heavily skewed towards those already in the highest income brackets rather than supporting Australians more broadly.

Labor governments are committed to standing up for working Australians, and a major part of that commitment is making sure our superannuation system remains fair and financially sustainable for everyone in our community. This bill better targets the super tax concessions available to individuals who have superannuation balances bigger than $3 million.

The bill also reflects two years of feedback on the Albanese Labor government's original design for better-targeted super concessions, and here's how it will work. From 2026-27 onwards, earnings on superannuation balances between $3 million and $10 million will be taxed at a rate of up to 30 per cent. For those with balances exceeding $10 million, the tax rate applied to earnings will increase to up to 40 per cent. Importantly, there will be no change to how earnings on superannuation balances below $3 million are taxed. These earnings will continue to be subject to a rate of up to 15 per cent, maintaining existing settings for the vast majority of Australians. Both the $3 million and $10 million balance thresholds will be indexed to the consumer price index over time so that they can continue to align with the transfer balance cap, and this ensures that these thresholds remain consistent and maintain their intended purpose as the system evolves and as time goes on.

Earnings will be calculated using established income tax principles and will be based on realised gains, providing a clear and familiar framework for determining taxable amounts. The policy will also extend to members of defined benefit schemes with equivalent arrangements applied so that these members are treated fairly and so that they're treated consistently with those in standard superannuation funds. Superannuation funds will be responsible for working out how much of their earnings relate to any member covered by these rules. They will then report that calculated amount to the ATO, ensuring the reporting process aligns with the intent and requirements that are set out in this legislation before us today. It's important to note that these changes will apply to less than 0.5 per cent of Australians who hold superannuation accounts in 2026-27, and the higher rate of tax for accounts with balances over $10 million will only affect less than 0.1 per cent of Australians with super accounts.

What these changes do, though, is ensure that the administration of the superannuation system is aligned with the legislated objective of superannuation, and this is to enable savings for a dignified retirement in a way that is both fair and sustainable. We've made no secret of our agenda to strengthen the superannuation system, and I'm proud of this government's accomplishments when it comes to superannuation and when it comes to protecting the retirement and future of all older Australians. We've defined the purpose of superannuation in law, ensuring it is clear and protected. To be clear, it is to save money for a dignified retirement, supported by government in a fair and sustainable way. It is not a reserve of funds to be dipped into whenever the coalition feels like it.

We've bolstered the system with a profound social reform: the introduction of superannuation on paid parental leave. Paid parental leave will reach a total of 26 weeks by the end of this very year, and, in July last year, the Albanese Labor government began paying superannuation on publicly funded paid parental leave. This reform tackled a longstanding inequality where women's earnings fall, on average, by about 55 per cent in the first five years of raising children. Paying superannuation on parental leave helps reduce that impact. Once parental leave reaches 26 weeks, a participant will accumulate about $3,000 in superannuation contributions during their leave period. This makes a difference. For the first time, it drives equality for women in the superannuation space.

I've recently spoken about the introduction of payday super. This reform is aimed squarely at fixing the ongoing problem of unpaid superannuation. The ATO estimates that $5.2 billion of workers' super was never paid in 2021-22 alone. That's roughly $100 million every single week that employees earned but didn't receive. Under the new payday super laws passed last year, superannuation must be paid at the same time as wages because that's what they are. This ensures workers can track their super more easily and spot missing payments early. Unpaid super disproportionately harms younger workers and those in casual or insecure work. Supporting people who are struggling to build retirement savings helps make our superannuation system more fair.

Deputy Speaker, I'd like to leave you with a statistic that demonstrates the purpose of this bill. There are 14 times as many people who will benefit from the changes to the LISTO as there are people who have over $3 million in super. It is now time for those opposite to put their support behind a fairer super system, and I urge them to vote for Australians on low incomes, not to vote for bigger tax breaks for the few who have millions in their super funds.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

The Treasurer has some explaining to do. He really does, because this legislation bells the cat on his failure. On his watch, what we saw was a proposal by the Australian Labor Party to put in an unrealised capital gain. Who would that have hurt the most? It would have hurt farmers, who already do it tough with the vagaries of the weather, of markets and of international volatility. They were going to be hit with an unrealised capital gains tax. Let's call it what it was: a tax, a proposed slug on them, which would have been so very unfair.

With that unrealised gain, what we would have seen would have been farmers whose properties went up in value, increased in worth, then being hit with a tax bill on the price of that land going up even though they weren't going to sell it. Because it had increased in value, they were going to be hit with a tax bill. What were they supposed to do—hive off a paddock or three to pay the tax bill that those opposite wanted to slug them with? Thankfully, public perception and people power has seen that particular element of this particular piece of legislation removed, and thank goodness for that.

The government has agreed to index the $3 million threshold, preventing bracket creep from slowly expanding the tax base over time. What we see through those two concepts alone—the unrealised paper gains, protecting SMSFs holding farms and small businesses from being taxed on gains that they have not made, and the indexation of the $3 million threshold—is the government and its Treasurer admitting they got it badly wrong. Thankfully, they could admit that that error needed amending, and it has been amended. But will you hear any member opposite, in their contributions on the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026, admit that? No, I don't think you will.

I certainly don't think you will hear any admission that this was going to be an unfair slug on our farmers, who are already, particularly in Western Australia, facing the reality that, if they sell sheepmeat to the Middle East, they won't have a trade in the future, with the live export ban. Farmers in the Murray-Darling are facing the prospect of less water because more productive water has been taken and used for the environmental purposes that this government is pushing. Farmers are already faced with the prospect of paying higher fuel costs because of the situation in Iran, and let's not forget the high energy prices which just keep going up and up. The people that that hurts most are small-business owners and farmers, farmers who grow our food and fibre.

Another thing that you won't hear from those opposite in their speeches on this important bill is the situation surrounding Shield and First Guardian and the collapses in the managed investment schemes. I appreciate that the government is planning to tighten the rules around MISs and to give the corporate watchdog, the Australian Securities and Investment Commission, more power to demand information. But those Shield and First Guardian collapses cost people their life savings. It destroyed some people, unfairly and tragically so. Can you imagine, Mr Speaker, being one of those people on the cusp of a well-earned retirement, looking forward to your twilight years, knowing that you had that nest egg there, and all of a sudden having it taken away? It's so very unfair, and it's on Labor's watch—on this government's watch.

In a 10 February 2026 ABC news article, business reporters Ben Butler and Nassim Khadem wrote:

About 12,000 Australians poured $1.1 billion in retirement savings into the two funds, which collapsed in 2024 and 2025 amid what incoming ASIC chair Sarah Court has described as 'industrial scale misconduct'.

They're not my words. They go on:

Investors in First Guardian, many of whom switched from highly regulated super funds into the product, face little prospect of recovery directly from the fund, with liquidators in December saying just $1.6 million of $446 million tipped into it had been recovered—not enough to pay their fees.

In order to recover money for investors, the corporate watchdog has instead launched a series of lawsuits against companies responsible for overseeing the fund.

Have we heard the Treasurer explain what was going to be done for those investors? Yes, many of those investors switched from highly-regulated super funds, but they did it based on good information, and, let's not forget, they did it during a period that Labor was in government.

Labor talks about being the party and the government of superannuation. They're proud to beat their chest about it and proud to spruik it. They condemn us for supposedly not supporting it. I listened carefully to the contributions of the member for Holt and the member for Moreton. The member for Holt talked about $36 billion being taken out during COVID. She said it 'had depleted or emptied' some of their superannuation pools of money. But what she didn't say is that it's investors' money. What Labor people never understand is that it's actually the money of the investors. It's not their companies' money. It's not the unions' money—although she did mention the unions, because Labor members are always beholden to unions. I can say that, having been a member of a union for 21 years; nobody can criticise me in that regard.

Henry Pike (Bowman, Liberal National Party) Share this | Link to this | Hansard source

Shame!

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

Yes, I was! I see that there has to be balance, and I appreciate the role unions do play, Member for Bowman. I do, but it's all in moderation and in balance.

What we saw during COVID was a period of time where people were desperate, and the coalition had their back. I would hate to think what would have happened during those dark days had Labor been in power. They wanted us to spend more money. They go on about a trillion dollars worth of Liberal Party debt, which is not true at all—also it was the Liberals and Nationals; I should throw the Nationals into any discussion about who was actually in power—but it was money that kept business doors open. It was money that kept Australians safe. It was money that kept people alive. No Labor member should ever downplay the role that was played by the coalition government, led by Scott Morrison. The Johns Hopkins centre said that Australia was the second-best in the world for COVID preparedness, and part of that was allowing people to access their own money—that is, superannuation.

The member for Moreton talked about the title of the bill. I admire whoever it is in the Labor Party who writes the titles of their bills, and I'm being genuine here. It's always rainbows and fairy floss and unicorns; it always seems like, 'Why hadn't we thought of this before?' They are always beautifully scripted, 'building a stronger and fairer' insert word here 'system' or 'program' or whatever the case might be.

The member for Moreton talked about this being a core Labor value. She talked about equity and fairness, and every other Labor member will come in here will repeat the same dogma. They will repeat the same lines because that's what they are told to do. It's got to be fairer because it's a core Labor Party value, as if nobody else cares. And here we have the modern-day Robin Hoods taking from the rich to give to the poor. Well, this isn't Sherwood Forest. This is the House of Representatives and there are people on both sides of parliament—I'm sure even on the crossbench too—who care about people in retirement having a dignified quality of life because they have their own money and they can access it. That's important. It is.

This is a government which, as I said at the start, has been found out and it is very much waving the white flag of retreat under pressure when it comes to the unrealised capital gains issue and the indexation issue. This was not a proposal that was in any way, shape or form about fairness when it came to the unrealised capital gains. It was not. And certainly I would really like to hear what is being done by the government to help those investors in Shield and First Guardian, those investors who now face a very bleak, certainly not a dignified, quality of life in retirement.

Australia needs a good superannuation system. And I would agree with the Labor members opposite who say we have a country that is the envy of the world. It is. But it's not for those poor Shield and First Guardian investors. They are faced with the prospect of not seeing money that was theirs because of what happened with the collapse of those two super schemes. We don't, and we won't, hear Labor members talking about that.

Equally concerning as the unrealised capital gains was the government's refusal to index the $3 million threshold. We have an inflationary situation at the moment that is being made worse by this Treasurer, the member for Rankin, and his willingness to pour debt petrol on the inflation fire. I'm not against spending; I never have been. I was in charge of $110 billion worth of spending when I was the infrastructure minister. There's good spending and there's bad spending, and, at the moment, unfortunately, we're seeing too much of the latter on this treasurer's watch. Failing to index thresholds was a silent tax hike. It was. Thankfully, he has acknowledged that with the concessions made in this particular bill.

Over time, more Australians would have been captured, not because they were wealthier in real terms but because inflation eroded the value of the threshold. It's bracket creep by design and a flawed policy, and Labor, through taking that aspect out, has admitted that. But you won't hear Labor members mentioning it. You'll just hear them talking about fairness, equity and core Labor values while reading out the title of the bill as though asking, 'Why hadn't the coalition thought about this?' They'll regurgitate history, as Labor members always do, and they're very good at that. But I'll tell you what. They might be good at the politics—Labor members always are—but, I have to say, they're not very good at the policy, and this shows it once again.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Assistant Minister for Immigration) Share this | Link to this | Hansard source

In my view, if I were to sum up what Australian workers were thinking at the moment, it would be that the income and taxation system is stacked against them. I often hear from workers that, no matter how hard they work, they feel that they just can't get ahead, and they're right. The income and taxation system in Australia is stacked against workers at the moment, and it heavily favours the wealthy. For too long, our taxation system has favoured wealthy Australians at the expense of low- to middle-income workers. You need look no further than the superannuation system to find evidence of this.

At the moment, in Australia, the wealthiest 10 per cent of income earners receive $22 billion in tax breaks by transferring their income into superannuation rather than simply paying income tax on it like the rest of Australia. But the lowest 20 per cent of income earners receive only about $800 million in tax breaks despite the fact that that population of Australians is much larger than the wealthiest 10 per cent. So the system is stacked against workers, and is it any wonder that people feel like, no matter how hard they work, they can't make ends meet and that they feel like the system is stacked against them? Because it has been for too long, and our government is going to do something about that. I want Australian workers to know that we hear them. We hear what you're suffering, and we know what you're going through. We know that the system is stacked against you. We know that it unfairly favours the wealthy at the expense of workers. That is why we are changing the system. That is what this bill, the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026, is all about. We are acting to rebalance the superannuation system unashamedly in favour of workers.

This bill is about ensuring that superannuation works for the people who need it most: the average Australian worker struggling to make ends meet. It's for the workers who keep our community functioning every day, who work hard and who struggle to pay the bills and the mortgage. It's for the tradie that's just started out—and is maybe running their own business or working for an employer—for the cost of tools, running a car and paying the rent. It's for the families who have both parents being forced to work these days, who have dauntingly sized mortgages, who are trying to get the best education for their kids, who are probably looking after elderly parents as well and who are feeling that they just can't get their heads above water. It's for the single parent who is living week to week, who is trying to do the best for their kid, who is maybe having to rely on rent assistance or family tax benefits and who is exhausted at the end of every week, with nothing left. It's for those that are nearing retirement but are being forced to continue to work beyond the normal retirement age because they simply don't have enough in their superannuation to retire on. This bill is for you.

This bill represents our government listening to your struggles and acting to make the superannuation system fairer. We'll do it in two ways. The first set of reforms in this bill enhance the low income superannuation tax offset. For too long, the settings have not kept pace with changes in wages, tax thresholds or the superannuation guarantee. As a result, hundreds of thousands of low-income workers have been missing out on the level of support the system was designed to provide.

This legislation corrects that. From 1 July 2027, the maximum LISTO payment will rise to $810. The eligibility threshold will move to $45,000. And both will automatically adjust in future, as tax thresholds and the superannuation guarantee rate evolve. These changes ensure that the tax system remains aligned with the broader tax framework and continues to deliver meaningful support, and the impact is substantial.

Around 1.3 million Australians—most of them women—will benefit from this reform. The total number of people eligible for the LISTO will grow to 3.1 million. Workers earning between $28,000 and $45,000 will see an average increase of $410 in their low income superannuation tax offset. Depending on their career earnings, this could translate to around $15,000 more in retirement savings. That's real help. That's a substantial change. It's practical and targeted, and it makes the system fairer. It rebalances the system to ensure that we're favouring workers over the wealthy.

The second reform ensures that the most generous tax concessions in the system are directed where they're intended: towards helping people save for a dignified retirement, not providing a massive tax subsidy for the wealthiest 10 per cent of Australians with extremely large balances, who are diverting their income into superannuation to avoid paying their fair share of tax. From July this year, concessional tax treatment will continue for all Australians, but the level of concession will taper for those with very high balances. Earnings linked to balances below $3 million will continue to be taxed at up to 15 per cent, but, if you've got a balance of between $3 million and $10 million, the tax rate will increase to 30 per cent. Earnings associated with balances above $10 million will be taxed at 40 per cent.

If you've got $3 million or more in your superannuation, you are indeed a wealthy Australian. You are doing well, and the system has provided a massive tax concession for you over a long period of time. But that tax concession has been at the expense of those low-paid workers who are struggling to make ends meet. It's time to rebalance the system. It's time to make sure the system is fairer. These reforms will ensure that the wealthiest Australians finally start paying their fair share of tax through that income diversion into superannuation. Both thresholds will be indexed to maintain consistency over time.

These changes affect a very, very small number of Australians—less than 0.5 per cent of the Australian population with superannuation accounts. The higher rate on balances above $10 million affects less than 0.1 per cent of Australians. Anyone would think that a reform that affects such a low proportion of Australians but has such a dramatic effect on advantaging and providing a rebalance for workers in this country would get the support of the opposition, but they'd be fooled. They'd be fooled.

Terry Young (Longman, Liberal National Party) Share this | Link to this | Hansard source

Not on gains. It only takes unrealised gains.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Assistant Minister for Immigration) Share this | Link to this | Hansard source

They'd be fooled because, once again, those opposite are going to oppose this very sensible reform that rebalances the taxation system in favour of workers. Once again they are going to side with the wealthiest Australians to protect a system that has led to Australians feeling left behind and workers feeling like they are struggling to make ends meet, like they can't keep up and that the system is stacked against them. Those opposite want to protect the existing system that has ensured that $22 billion worth of tax concessions go to the wealthiest 10 per cent of Australians, a system that is unfair and has gone on for too long, and we are committed to ensuring that we rebalance it.

These changes will ensure the distribution of the most generous concessions, ensuring that they are not disproportionately absorbed by a very small number of individuals with balances far beyond what is needed for a comfortable retirement. This is about sustainability, it's about fairness, and it's about ensuring that the system continues to serve the people that it was established for, the average Australian worker, and to provide dignity in retirement. It wasn't a system that was established to ensure that the wealthy could divert income into superannuation to avoid paying their fair share of tax.

These reforms are coupled with other reforms that our government is making to ensure that the system is rebalanced in favour of workers. We've legislated the objective of superannuation so it's clear about what the superannuation system was intended to do—to provide that dignity for workers in retirement. We've lifted the superannuation guarantee to 12 per cent. We're ensuring that super is paid on government paid parental leave so that parents—particularly women, who generally retire with a third of the retirement savings of men—ensure that they get a fairer deal, because they have to take breaks from the workforce to raise children.

We're finally recognising in Australia, through a Labor government, that if parents, particularly women, are going to have that dignity in retirement, then they deserve to ensure that their superannuation continues to grow whilst they do that important unpaid work of raising children and taking a break from work. We're expanding the performance test to cover hundreds more products, we're strengthening financial reporting obligations for funds, and we've begun reforming the retirement phase to ensure members get better outcomes.

All of these sensible reforms are aimed at ensuring that we rebalance our superannuation system to ensure that it provides sustainability and that it works for the average low-to-middle-income Australian worker. But, once again, we're seeing the coalition, the Liberal Party and the National Party—and, let's face it, some of the lowest income workers in this country, some of the lowest socio-economic geographical areas in this country, are in National Party seats—continue to come in here and vote against the interests of working Australians and vote to prop up a system that is delivering $22 billion in tax concessions for the wealthiest 10 per cent of Australians. They ought to be ashamed of themselves when they go back to their electorates and say that they are supporting workers, when they come in here and vote against the interests of Australian workers on every occasion and try and prop up a system that has ensured that workers feel that they can't make ends meet any more and that they are struggling. The Albanese government is determined to make sure that we rebalance the superannuation system so that it meets its original intention and works in favour of the workers of Australia.

Allegra Spender (Wentworth, Independent) Share this | Link to this | Hansard source

I rise to speak on the Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026 and the associated Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026. I do welcome this bill, and I welcome the government's approach to the superannuation system in its current form, not in its previous form. I'd like to talk a little bit about why it's important and why I think it is a useful reform, and, at the same time, why I disagree very strongly with the previous speaker and how they characterised that reform. I'm very wary of people setting up reforms as class warfare. I think that that does not help this country stay together. Certainly some of the language that has been used around these bills is not helpful to making reforms which are genuinely useful.

I have spoken to my community a lot about superannuation, about its purpose and about what people want. Particularly when the government first floated changes in the superannuation system, I went out to my community. We had over 1,100 people respond to a survey, and over 80 per cent of people said they do support changing tax concessions on super, reducing some of the highest tax concessions and, indeed, increasing tax concessions for less wealthy people because they see the need for that. It was interesting. I had a number of people write in to say: 'The current tax concessions actually are beneficial to me personally, but I still support reform because I do want to make sure that all Australians can have good lives and I think that this is a reform that is appropriate.' It's that spirit that I do think the speakers particularly on the Labor side, given the language of the previous speaker, need to bear in mind.

I represent a lot of wealthy Australians who are very concerned that people across the country aren't able to live dignified and decent lives. I represent many people who are well off who worry about their kids and their grandkids and, frankly, even if their kids and grandkids are sorted out, they worry that other Australians who are working hard just can't get ahead. So they worry about that. They are open to reforms. I have had many people recently say, 'I'm benefiting from various concessions, but I support change here because it can help other people.' So when members of parliament demonise those people and say, 'It's just the wealthy, so it doesn't matter if we take money away from them because there are only a few of them,' it doesn't help. It's actually not going to help drive the reform that the country needs in a way that the country can stay together on. I just really warn people to consider this as they are considering these bills.

Why do I think this reform is appropriate? It is genuinely because we have a tax system and a broader economic system at the moment which has various features which I think have delivered outcomes that we don't really want. I'm going to talk specifically to some of those outcomes. For instance, in this country, if there are two families living next door to each other, both on 100 grand, the older, retired family, on average, pays half the tax of the younger family. A younger family is likely less wealthy, unlikely to own their own home, or certainly less likely to have paid it off, and more likely to have significant costs to them, such as child care or paying off HECS debts. A wealthier family, on average, pays half the tax as a younger working family. I just don't think that makes sense and I don't think that is fair.

At the same time as we saw from 2004 to 2016 the wealth of households over the age of 65 grow by around 50 per cent, the wealth of households under the age of 35 didn't move. So we've ended up with a bit of a generation gap emerging which I think has only grown since then, although we don't actually have the numbers. And so we have a situation where younger Australians are struggling to meet the milestones of their parents. We have a 20 per cent drop in homeownership for younger Australians compared to previous generations. So we do have real challenges in the social compact that we are offering younger Australians and that we're actually offering the broader Australian group—that sense that, if you get a decent job and you work hard, you should be able to create a decent life for yourself whether your parents can help you or not.

I think it is really important that as a parliament we consider this. This is one of the issues that I have championed the entire time I've been elected. That is why I support the government looking at tax in a way to make sure that all Australians, regardless of background, can afford decent lives for themselves and their families. I think that is something that, as a country, we do want. Let's come to the detail of this bill. There are many causes for some of the challenges in our system at the moment—there's low productivity and the lack of housing supply—but, certainly, the superannuation system has played a part. We do have a superannuation system where the concessions are very generous. It's appropriate to have concessions on superannuation. We lock people's money up for a long period of time. We say that they can't access it until a certain age. So I think it is extremely appropriate that there are concessions in the superannuation system above and beyond the progressive concessions in the working tax system. That is appropriate.

Then the question is: are the levels of concessions appropriate? This is where I have a lot of common ground with, and where I do support, the government's bill. I think it is fair. When I talk to my community about the purpose of superannuation, and the purpose of giving people concessions for superannuation, people very much do agree that the point of the concessions in superannuation is to support people to have a dignified retirement. That's something that the country can unite on: we want people to have a dignified retirement. We do not want people to be in poverty or to be insecure in their later years.

There is a financial benefit to the country as well. If we have a decent superannuation system, where people can have a dignified retirement, then they also have less recourse to the public purse and to age pensions. There is a sense that that is the purpose of super. I then look at my community and how they look at superannuation concessions currently and ask, 'Do they support that?' They do support a dignified retirement, but, in some cases, the concessions well and truly go beyond what is needed for a dignified retirement. That is why, on balance, I support pulling back the concessions on high-value super funds: because the concession should be directed towards supporting a dignified retirement, but it is unnecessary to give additional concessions that go beyond supporting that dignified retirement.

I want to flag a conversation I had with someone in my electorate about this. A man came up to me—he was probably about my age, in his 40s—and he said, 'I'm concerned that what we're doing is giving concessions to people who have significantly more wealth in retirement than the childcare worker who looks after my kid every day.' That really stuck with me, because I think that is the question. Tax concessions are a choice. We don't have a lot to go around. The question is: Are they being applied in the way that we think is best for the country? Is it fair, consistent, economically efficient and predictable? Those are some of the themes we should consider with regard to our tax concessions.

I think, in this case, where the government has landed is appropriate. And I will say that if the government had been taxing unrealised gains—as it had initially intended to do—I wouldn't have supported this bill, even though I do support changing tax concessions. I made this point in various forms to the Treasurer and to others and played a significant role, I think, in working with others so the previous form of the bill did not go ahead in the last parliament. When I talk to my community, people do steadfastly support pulling back superannuation concessions, particularly when they can support people with lower balances to build more effective super. But the taxation of unrealised gains is bad policy.

It is inappropriate and would certainly have unintended consequences, particularly in the innovation sector—in the startup sector—as well as for other groups. That is why I strongly opposed that part of the policy. I want to recognise that it's not easy to change your mind publicly and that the Treasurer changed his mind publicly, restructured the package, indexed the thresholds and removed unrealised gains. I think that this is a much better policy and package for it. I will give the Treasurer enormous credit for being able to do that, because I'm sure it wasn't easy. I'm sure it wasn't necessarily what he wanted to do. But he listened to feedback. I think that is actually what people expect from us here in the parliament.

That's really where I want to leave my comments. The only thing I would say further is that what I do want to see, and what I think this government should be doing, is linking any changes—any reductions in tax concessions—to meaningful reductions in income taxes for working-age people so that it's not just more money in the government coffers. I think this is really important. When you listen to Australians talk about tax—and we're talking about tax, which is a really positive move—there is a great deal of concern that tax increases, and this is a tax increase, just go to government coffers and that governments can sometimes spend without as much oversight as you would like and sometimes, frankly, on things that are pretty political as opposed to what best benefits the country. There is a distrust around government spending—that it isn't as effective as it could be and that government doesn't always use every single dollar as well and as thoughtfully as we do in our homes.

Again, I'll comment on the words of the previous speaker, the member for Kingsford Smith, who I have enormous respect for. He said something like 'it's not many people whose money it is and so it doesn't really matter'. I don't want to verbal him, but I want to acknowledge that it's not the government's money that they're touching. It's somebody else's money, so we need to show respect. We need to make a strong case if we are going to make changes to the money that people have and those tax arrangements. I think that is really important.

The government, if it is contemplating any more tax changes in the budget, should keep the covenant with the Australian people that, for any additional tax that it raises, it should give it back in income tax concessions. It's not only important on principle; it is important because younger working people are really hurting right now. They are really struggling with the cost of living. Tax concessions is a way that you can actually make a real difference to people's lives, and in a quick way. It is important because government spending has grown at a rate that I think most Australians have some concerns about. It was just over 24 per cent when the government came into power. It is now at 26.9 per cent. That is a significant growth in government spending. Honestly, it is important that government spending is pulled back over time, because I think that that level of growth and spending is definitely unsustainable.

These are the core reasons why I think it is really important that the government uses any sort of money that is raised to give back to Australians who are struggling, particularly younger people who really feel like they can't get ahead. The numbers bear them out. They can't get ahead. They're spending less on non-essentials than previous generations did. They're not building wealth like they used to. They are not meeting the milestone of buying a house like they used to. They're not having kids like they used to. We know that money and economic circumstances are playing into this.

So I do support the bill, but I think the government needs to link any tax increases to tax reductions. I forgive the government in this case because they did announce a tax cut for the lowest tax level before the election, so I'm letting them balance this one out. I'm giving credit for that. But I think any credits after that should be returned to the people as tax concessions on working because that's where they are really needed.

Libby Coker (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

I rise today in support of the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026. This bill is about something absolutely fundamental: making Australia's superannuation system stronger, fairer and more sustainable in the longer term. Superannuation represents the best of what it means to be Australian. It represents dignity, it represents security and it represents confidence that, after a lifetime of work—often physically demanding or sometimes underrecognised—Australians can retire with stability and independence.

In my electorate of Corangamite in Victoria, I often see what superannuation means in very practical terms. I speak regularly with people who came to Australia after the Second World War, moving to the Geelong region to build new lives. They worked in factories, on building sites and in small family businesses. They weren't wealthy people, but, over decades of steady work, they built up superannuation balances that now sit alongside the age pension and provide them with something incredibly important: choice, certainty and dignity in retirement.

For younger generations, this superannuation reform will deliver even more over the course of their careers. But, while this is so, we also know this: the benefits of super could be better distributed. That's why we're introducing this bill—to make superannuation fairer for all, to help disability and aged-care workers, to help retail and hospitality staff and to help early years educators and nurses get the secure retirement they need and deserve.

To achieve this, this bill makes two important changes. Firstly, it boosts the low-income superannuation tax offset and, secondly, it better targets superannuation tax concessions for very large balances. Together, these reforms strengthen the system. They provide more support for those on low incomes, while ensuring that the concessions for larger balances are fair and sustainable.

On the first change, the low-income superannuation tax offset exists for a simple reason. Without it, low-income earners could pay more tax on their super contributions than they would on their ordinary income. This is not fair, so under this legislation we will increase the maximum payment by $310, lifting it to over $800 from July next year. We'll also raise the eligibility threshold from $37,000 to $45,000. These are not minor adjustments. They are meaningful reforms that deliver on the Albanese government's core commitment to help more Australians get ahead and lead fulfilling lives. Changes in this bill will help deliver on that commitment.

The changes will deliver a more secure retirement for 1.3 million Australians, the majority of whom are women. It will mean the total number of Australians eligible for LISTO will increase to around 3.1 million people. Our changes will benefit all workers with incomes between $28,000 and $45,000, with an average increase in LISTO payments of $410 annually. These workers are our disability support workers, our aged-care workers, our retail hospitality staff, Australians who work weekends, nights and public holidays, our early childhood educators and our nurses. These are the workers who care for us, who care for our communities and who bring people together, and yet, too often, they retire with far less than they deserve.

By strengthening LISTO, we are making sure that low-income workers receive a fairer tax concession on their super contributions. Over the course of a working life, these changes could deliver around $15,000 extra at retirement, depending on an individual's income path. This is not insignificant. For someone on a modest income, $15,000 can mean the difference between replacing a broken-down car or going without. It can mean more Australians have the ability to pay for the support they need at home, whether it's improving the energy efficiency of their home or simply ensuring they have what they need to live comfortably.

The LISTO eligibility threshold and maximum payment amount will also automatically adjust in line with any future changes to income tax thresholds and the superannuation guarantee rate. This will ensure that low-income workers receive a fairer tax concession on their super contributions to align with the government's third round of tax cuts taking effect in 2027. Those tax cuts and these changes will make a real difference to the lives of millions of Australians who work hard and who do deserve better, such as Australians who volunteer at sporting clubs and food relief centres. They should have support, and that's what this bill delivers.

The second key part of this bill reduces tax concessions for individuals with a total super balance above $3 million. This will affect less than half a per cent of all Australians and will commence from July this year. Let me repeat that. It will only affect less than half a per cent. It will mean the concessional tax rate applying to future earnings on balances between $3 million and $10 million will be a combined headline rate of 30 per cent. Earnings corresponding to balances below $3 million will continue to be taxed at 15 per cent in the accumulation phase and—

Debate interrupted.