Justine Elliot (Richmond, Australian Labor Party) Share this | Link to this | Hansard source

I too rise to speak in support of the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026. Superannuation is one of the most significant social and economic reforms in modern Australian history. It reflects a simple but powerful idea: that working people deserve dignity, security and independence in retirement. The reforms in this bill are about making our super system even stronger and more sustainable. They're about ensuring that lower income workers receive a fairer tax concession and addressing imbalances in the distribution of tax concessions that have emerged over time.

Of course, the Labor Party has a very long and proud history of creating, strengthening and defending our superannuation system. For most of the past century, superannuation was limited to public servants, members of the military and some white-collar employees. Most workers—particularly women, blue-collar workers and casual employees—retired with no savings, and they had to rely purely on the age pension. It was a Labor government that began the transformation of the system in the 1980s. The Prices and Incomes Accord embedded superannuation into industrial awards and dramatically expanded its coverage. It was a Labor government that continued this work in the 1990s by legislating the superannuation guarantee that required employers to contribute a set percentage of an employee's ordinary earnings into superannuation funds.

The reforms were good for not just workers but the entire economy. Former prime minister Paul Keating, the architect of our super system, said:

Superannuation, like Medicare, is now an Australian community standard, binding the whole population as a national economic family, with each person having a place.

Before the reforms, Australia had low national savings and relied very heavily on foreign capital. Compulsory super built a vast pool of domestic savings that would eventually underpin infrastructure investment, business growth and financial stability. Today, Australia's super pool is worth more than $4.5 trillion. It's one of the largest pension systems in the world relative to GDP. Labor governments continue to shape the system by legislating a gradual increase in the superannuation guarantee from nine per cent to 12 per cent, introducing MySuper to provide low-cost default products, strengthening governance rules and improving fairness for low-income earners.

The Albanese Labor government continues to build on this proud Labor legacy. Our government supported and completed the staged increases to super contributions, which reached 12 per cent in July 2025, and we made one of the most significant reforms to the super system with the decision to pay superannuation on Commonwealth paid parental leave. This reform recognised caregiving as an economic participation and helped reduce the long-term retirement penalty faced disproportionately by women. That change was great for families and great for the economy as well. In 2023, for the first time, our government legislated a formal objective for superannuation: to preserve savings to deliver income for a dignified retirement, alongside the age pension, in an equitable and sustainable way. Embedding this objective in law provides policy clarity and stability. It ensures that any future changes align with the core purpose of the system.

From July this year, the payday super reforms legislated by our government will come into effect. This means employers will be required to pay super at the same time as wages instead of quarterly contributions. For workers, this reduces unpaid super risks. It also means their money doesn't sit unpaid for up to three months before it starts earning investment returns. Even small delays reduce long-term growth, so receiving super contributions earlier can add thousands of dollars to a worker's retirement balance over their lifetime. This is particularly important for younger workers and those in casual or part-time jobs. Our government extended the annual performance test beyond MySuper products to also include trustee directed products, which increased coverage from about 80 products to 800. We've aligned the financial reporting requirements of funds with those of public companies to ensure that fund members have better access to more meaningful and detailed information.

These reforms also mean less onerous reporting for funds, with greater clarity about requirements and the removal of duplication. We've also announced mandatory service standards for super trustees, and we're reforming the retirement phase of superannuation as well. Over the next decade, more than 2.5 million Australians are expected to retire, and the Albanese Labor government has committed to uplifting the retirement phase of superannuation to ensure that Australians retire with the right information and strategies to help them make the most of their superannuation. Now, with the reforms in this bill, our government is making the superannuation system more equitable and more sustainable.

This bill delivers on two key priorities. Firstly, it boosts support for low-income earners. Secondly, it makes tax concessions fairer and better targeted. On this first priority, we're boosting support for low-income earners by increasing the low-income superannuation tax offset, LISTO. This will mean a fairer tax concession on super contributions for low-income workers. The reforms in this bill mean that, from July next year, we'll increase the maximum LISTO payment from $310 to $810. We'll also raise the income eligibility threshold from $37,000 to $45,000. These changes will increase the total number of Australians eligible for LISTO to 3.1 million people. What a difference it'll make to them, and 3.1 million Australians—the majority of them being women—will have a more financially secure retirement.

For many disability and aged-care workers, retail and hospitality staff, early childhood educators and nurses, these reforms will ensure they get the secure retirement they need, they've earned and they deserve. All workers with incomes between $28,000 and $45,000 will benefit from these changes. With an average increase in LISTO payments of $410, these workers could receive a benefit retirement of about $15,000, depending upon their income over the course of their career. The purpose of LISTO is to ensure individuals that earn up to a defined income threshold do not pay more tax on their superannuation contributions than they would have paid on their wages. In other words, it protects low-income workers from paying a higher effective tax rate simply because their earnings are directed into compulsory superannuation.

The reforms in this bill strengthen that mechanism. They ensure that the LISTO eligibility threshold maximum payment amount will automatically adjust in line with any future changes to income tax thresholds and superannuation guarantee rates. With the third round of tax cuts taking effect in 2027, this will ensure that low-income workers will receive a fairer tax concession on their super contributions to align with these changes. On that second priority, we're making tax concessions fairer so they're better targeted for larger super balances. For individuals with total superannuation balances above $3 million, existing super tax concessions will be reduced on amounts over that threshold.

This reform will take effect from July this year and impacts less than half a per cent of all Australians. Right now, all super balances earn investment returns that are taxed at a concessional rate of 15 per cent before retirement and tax-free after retirement. Under these reforms, for super balances between $3 million and $10 million, the tax will increase from 15 per cent to 30 per cent for the portion of the balance above $3 million. For super balances above $10 million, the concessional rate will be 40 per cent. Both the $3 million and the $10 million thresholds will be indexed to ensure that these higher rates continue to apply only to those individuals who have very large balances. Regardless of the $3 million and $10 million thresholds, earnings will remain tax-free in the retirement phase.

Superannuation tax concessions are provided to encourage saving for retirement. They're not intended to provide indefinite, heavily subsidised wealth-accumulation vehicles for individuals who have extremely large balances. Without periodic recalibration, the cost of concessions on very large balances will continue to grow disproportionately, and of course this cost is borne by all taxpayers. This bill introduces a measured recalibration. The reforms in this bill ensure that the concessional treatment of superannuation will remain the same, but it will be provided in a fairer and more sustainable way. Targeting concessions for the biggest balances helps fund more super for those with the smallest balances. A stronger and more sustainable superannuation system, more super for low-income earners, keeping more of what you earn and retiring with more as well—that's essentially what all of these reforms are about.

This bill strikes a careful balance. It preserves strong incentives to save. It maintains concessional treatment across the system. It introduces indexation arrangements to protect real thresholds over time. Importantly, the additional tax applies prospectively to earnings after commencement. It does not re-tax past contributions. It does not unwind existing arrangements. It is forward looking.

The Australian Labor Party built our superannuation system, and successive Labor governments introduced reforms to ensure that the system remains fit for purpose. The Albanese Labor government has introduced significant reforms to improve the system and has enshrined the principles of equity and sustainability of the superannuation system in legislation. The reforms in this bill will build on that very proud legacy. Public confidence in our superannuation depends on fairness. Workers must be confident that the system is designed to support retirement securely for all, not to disproportionately benefit those who are already at the very top. Our superannuation system represents a shared national investment in dignity and security in retirement, and that's why our government is committed to protecting the long-term integrity of Australia's retirement income framework.

Superannuation has reduced future pension pressure. It has increased household wealth. It has deepened capital markets. And it has given millions of Australians a tangible stake in our nation's prosperity. Superannuation is one of Australia's most important public policy achievements. That's why it's so important for us to confront any imbalances in the system when they do arise, and that's exactly what this bill does. It strengthens support where it's most needed. It moderates concessions where they are least justified. It modernises the system whilst respecting its very foundations. It's measured, targeted and principled. This bill ensures that the system remains strong, fair and sustainable for generations to come. I commend the bill to the House.

Phillip Thompson (Herbert, Liberal National Party, Shadow Assistant Minister for Defence) Share this | Link to this | Hansard source

When this Labor government runs out of money, it comes after yours. This is the same group of people who wanted to go after our farmers. They wanted to tax unrealised gains. This government wanted to tax out of existence those who put grain, food, fibre and meat on your plate. That is an absolute shame.

I've never in my seven years here seen a government who is so blatantly going after hard-working Australians, taxing them more to bump up their revenue stream because they've run out of money. They've gone after hard-working Australians and gone after our farmers. We then get the hubris from the Treasurer, time and time again, who says that Australians have never had it so good—they've never had it better, and he's doing everything that the Australian people want. That couldn't be further from the truth. People are working harder and keeping less of what they make. People are working double the time in the workplace and extra jobs to keep up with inflation and cost-of-living pressures.

Australians deserve clarity from this government, but it's not what they are getting. They need clarity and honesty on the direction that the country is travelling. Is this just an isolated adjustment, or is this the opening chapter in a high-tax, high-spending manifesto? We know the answer. This is exactly what life under Labor governments looks like. You pay more, you get less, and your future is never safe.

The Coalition and community pressure has forced Labor to abandon the taxation of those unrealised gains and the indexation freeze, but, make no mistake, given half a chance if the door was left open, then this Labor government would come after your hard earned money and come after your life savings, because that's what they do. This government have been found out and are retreating under pressure thanks to sustained scrutiny from the coalition, from the superannuation sector and, most importantly, from small businesses, the backbone of this nation, as well as from everyday Australians who saw a government trying to sneak through changes to try and prop up their budget. We forced Labor to step back from the most outrageous elements of this proposal. This was not a proposal that was aimed at hurting retirees; this was aimed at hurting future generations, stealing the future of young Australians, and stealing it away from them without their knowledge.

We exposed a clear breakdown in the relationship between the Prime Minister and the Treasurer. The original design to tax unrealised gains represented a fundamental break within the longstanding principles of the Australian tax system. Australians have always understood that tax is paid when income is realised—when cash is actually in hand. You cannot tax people on what you think they might make. A one-paddock grazier who hasn't had a good season would go bankrupt and lose the farm. They would lose what they have always lived on and grown up on. The flow-on effect to our economy would mean fewer farmers, less Australian produce and less of the choice that you have to buy Australian at the supermarket.

To propose taxing paper gains, particularly in volatile asset classes, was not just a minor tweak. This was a structural shift that would have set a dangerous precedent across the whole tax base. Equally concerning was the government's refusal to index the $3 million threshold. In an inflationary environment being made worse by this treasurer and his willingness to pour debt petrol on the inflation fire, failing to index thresholds was a silent tax hike. Over time, more Australians would have been captured, not because they were in some wealthy top one per cent, but because inflation eroded the value of the threshold. That is bracket creep by design and a flawed policy. If it wasn't a flawed policy, it was a sneaky trick to take more of your hard earned savings. The government's backdown demonstrates one thing clearly—this was never settled policy grounded in principle. It was a blatant revenue grab that was exposed and collapsed under scrutiny. Tax policy reform should not be done with haste; it should be done in consultation.

It's my belief that this Labor government can't be trusted. They say one thing in the community and do another thing here. At the last election, Australians were not presented with a policy to tax unrealised gains in superannuation. They were not told that longstanding superannuation settings would be fundamentally altered. They were not warned that indexation would be stripped away. Promises matter in a democracy. Major structural tax changes should be put clearly and transparently to the Australian people. Instead, this proposal appeared out of nowhere, with limited to no consultation and a rushed legislative timetable. That is why this debate has resonated so strongly. Australians instinctively understand when something has been slipped in without their consent. When it comes to retirement savings—the nest eggs built over decades of hard work—the bar for legitimacy must be higher.

We have a government that cannot be trusted. We were promised by Labor, by this treasurer, that they had beaten inflation and higher interest rates. We were told by this government that they were going to make life easier for families, yet families have had less flexibility and less choice. In life it's been harder for hardworking Australians to pay the mortgage, to pay the energy bill and to make ends meet. Right now around Australia people are making hard decisions, whether they're paying insurance, cancelling sporting events for their children, putting food on the table or making those tough sacrifices because of how hard it is to make ends meet in this country.

The fact of the matter is that inflation and high interest rates have beaten this treasurer and this government. When Sally McManus, Bill Kelty and Paul Keating say the family-savings tax is a bad idea, it's a bad idea. If your Labor front line, union officials and Paul Keating come out and say this is a bad idea, that Labor has lost its way and is not doing the right thing, then the Labor government should listen. Labor said it would only target the few, but even Labor's mates are out there calling out the fibs. The Secretary of the Australian Council of Trade Unions, Sally McManus, warned:

I do think it's got to be indexed because you've got to make sure eventually people don't end up there.

Former ACTU secretary Bill Kelty has said:

I think taxing unrealised capital gains is bad policy. It distorts the effective tax. Changes your income flows, and if it was on superannuation generally, there would be a revolution about it. It would destroy super.

The father of the superannuation system, Paul Keating—the person that Treasurer Chalmers looks up to the most—has said that workers would be caught up. Industry analysis has found the claim by the government that it would only hit a small number of Australians is a furphy; it was going to hit 1.8 million Australians.

Those are the Labor heavyweights saying that this is a bad policy, yet, if the Treasurer saw an opening, he would take it, because he knows that he, as the Treasurer, and the Prime Minister cannot manage a budget. They've run out of money. They've run out of ideas. Now they're coming after Australians' money.

The problem confronting our country is structural spending growth that is outpacing sustainable economic growth. Labor has a spending problem, not a revenue problem. When governments spend beyond their means, they reach for new taxes to fill a gap—to fill the hole. This is precisely what we are witnessing here. Rather than confronting waste, rather than prioritising programs and rather than restoring fiscal discipline, Labor has chosen to hunt for new pools of capital to tax. Trust is fundamental in tax reform. Australians accept reform when it is principled, predictable and based on consultation. They do not accept retrospective tinkering, ad hoc changes and ideological experiments dressed up as 'just modest adjustments'. This proposal reinforces a broader pattern: high spending first, then new taxes to pay for it later. That is not reform. That is fiscal mismanagement.

Tax policy cannot be designed in isolation when retirement income settings need confidence and the entire system is eroded. This Labor government is once again trying to leave the door ajar to come after hard-working Australian tax dollars. Make no mistake; they have run out of money. They have not prioritised the Australian people correctly. They are trying to cut programs, tax you, raise revenue wherever they can and blame everyone else. I'm sure something that's happening in the Middle East, or somewhere around the world, will be the cause of this treasurer trying to sneak in another sneaky tax.

The Australian people, the community—those who came out so hard, in their masses, and said, 'We do not support taxing unrealised gains'—and small businesses have got better things to do than fight a government on a tax they're trying to creep in. They are the engine room of the economy. They're the ones that keep the lights on here—the private sector, our small businesses—not the government. The coalition stood side by side with our small businesses, with our farmers, and said, 'We will not support it.' We had to take the fight up to the government.

I don't think that a lot of the policies the Treasurer has tried to rush through will help Australians. I think we'll see the pain. It's normally after politicians have left this place, when they're in retirement somewhere. That's when the pain will flow through the hardest. The Treasurer, the Labor Party and this Labor government need to listen, work and deliver for the Australian people rather than listen, work and deliver for their mates in the unions and the CFMEU—well, not the ACTU because they came out and they didn't support this policy. That's why there are a lot of coalition members coming in here today to speak against some of the most drastic and draconian tax policies that a government has tried to ram through this place—at least in my lifetime.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support this bill, unlike those on the opposite side who are not supporting this bill, based on what we've heard so far from different speeches yesterday and today. It doesn't surprise me that they're not supporting this bill. When you look at the history of superannuation and superannuation legislation in this House, and in the older house down the road where superannuation was first mooted, discussed and proposed in the Hawke-Keating years, it has been opposed every single way by the opposition. Every time there's been legislation in this House to better superannuation for workers, it's been opposed by the other side. So it's no surprise that they'll be opposing this. What are they opposing? They're opposing a better superannuation system for low-income workers. Why do those opposite not want low-income workers to have a better system and a super tax offset which means there'll be more money in their retirement so they can retire with dignity? If someone can tell me why that is wrong, maybe I can see the sense in it. But that's what this bill does.

This bill is delivering more help to low-income workers. It reforms the superannuation system to make it stronger, to make it fairer for everyone and to make it more sustainable. It boosts those low-income workers superannuation tax offsets and better targets superannuation concessions for large balances. So, as I said, it does not surprise me that once again we're seeing an opposition who is opposing superannuation. They opposed the whole concept of it back in the eighties when it was proposed under the Hawke-Keating government. In fact, they even overturned legislation, which was proposed and brought to this place in 2013, to take the super requirement up to 12 per cent. Then—I mentioned this the other day when I was speaking on the other bill, the Treasury Laws Amendment (Supporting Choice in Superannuation and Other Measures) Bill 2025—Joe Hockey overturned it when he came into being Treasurer in 2013. He said, 'No, we're not going to give that increase to workers.' It was 1.5 per cent or 2.05 per cent, or whatever it was back then. It took another Labor government to give that increase to workers. That little increase that they receive makes a huge difference to their superannuation at the end of their retirement plan, which means there will be more in their pockets.

So this bill is increasing the low-income super tax offset and also super concessions. It's targeting super concessions, paying super on paid parental leave and introducing payday super. Payday super is very important. We've seen millions and millions of dollars that have never been paid into super. Many, many constituents have come to see me. They've mainly been young people that have been working in apprenticeships or have started their very first job. They're basically unaware of their industrial rights and of what superannuation is. They usually speak to a third party who says to them, 'Have you been getting your super paid?' and they discover when they look in their account that no super has been paid. We've all seen situations like that, because, when you're paying it every three months, it's so easy to fall behind and not pay it. The legislation will mean that it's paid on every payday there and then, which makes it easier for both the employer and the employee.

Some of the other things that we've done include increasing the superannuation guarantee to 12 per cent. As I said earlier, it should have been increased back in 2013, but it was overturned by the former coalition government. We've also legislated the objective for superannuation. This legislation implements the government's policy to better target concessions available to individuals with superannuation balances that exceed $3 million, which is a very small group. It's less than 0.5 per cent of all superannuants and people who are contributing to super funds. It maintains the concessional treatment of superannuation for all taxpayers and makes superannuation tax concessions more targeted at those people with large balances.

The measures in this bill reflect the principle of a fairer tax system. It will also rebalance superannuation tax concessions so they're directed where they matter the most and ensure that support goes to those who need it the most, not to those with extraordinary balances. The vast majority of people that will be getting the tax offsets are workers, like nurses, teachers, apprentices, carers, hospitality staff, small-business employees and countless others, so nothing changes except the reassurance that the system will be fairer and stronger. By adjusting the concessional tax rates, as I said, of the very high balances, the bill helps protect retirement incomes for everyday Australians while preserving the long-term health of the superannuation system itself. Super's not just a financial instrument. It's a lifelong safety net, built year by year, shift by shift when you're working shifts, sacrifice by sacrifice—small increments that then should enable you to retire in dignity. That's what it's all about.

Importantly, these reforms do more than protect. They lift up those who need it the most. Raising the low-income super tax offset threshold from $37,000 to $45,000 will ensure that workers earning modest wages, like childcare workers, retail assistants, disability support workers, cleaners and early career employees, will receive a fairer tax concession on their contributions. What is wrong with that? Why is the opposition opposing these low-income workers getting a fairer tax concession on their contribution? That's the difference. It isn't an abstract. That's the reality. For some families, super is more than just savings. It's what's going to give them dignity in retirement. These are not small changes. They're changes that honour the effort of people who work incredibly hard for every dollar they earn. These changes strengthen the superannuation system so that it remains a pillar of security, not a source of inequity, and they ensure that a system built for all Australians continues to serve all Australians fairly, responsibly and with an eye to the future.

At the heart of this discussion is not just tax rates and legislation. It's people. As I said, it's about people retiring in dignity and people being able to continue putting food on the table, paying their bills and not worrying about where their next dollar is going to come from when they retire. It's their futures, and it's their right to retire with that dignity, security and peace. It's our shared responsibility to make sure the system protects that right, not just today but for generations to come. These are the decisions that we don't make in haste but with time and consultation of a broad range of unions, industries and other stakeholders supporting this expansion of eligibility for the low-income super tax offset. I'll repeat that. I love repeating that because I can't believe that the opposition would oppose it. Eligibility for the low-income super tax offset means more money in the super accounts for low-income workers. It means more money in the pockets of those low-income workers. In my electorate, I have all the restaurants in the CBD. There are many, many part-time workers struggling. Perhaps they're students working part time. This will make a huge difference to those people.

The steps in this legislation today put in place actions that we have full confidence will work and benefit Australian families and households. This is an important bill. It makes it a fairer balance for superannuation, and it ensures that those low-income workers will have more money in their super. It'll ensure that those low-income workers will retire with more and retire with dignity, and that's what superannuation is all about. It's not about being used as an offset to save on taxes and do a whole range of other things. It's there as a savings account for workers to be able to retire in dignity. That was the focus and purpose of superannuation back in the eighties when it was firsts proposed that we wanted workers to be able to retire with dignity and to know that when they retire they weren't going to be just wanting the social security pension, as it was called at the time, but to be able to retire in dignity with their own money. The way to do this is through a savings scheme, the superannuation plan, that was put in place by a Labor government way back in the late eighties. What we see today is thousands of workers that have an account, a retirement fund and have some income coming to them when they retire. It's an important bill and a bill that should be supported by all of us in this place. Shame on the opposition for not supporting it and for not supporting low-income workers.

Leon Rebello (McPherson, Liberal National Party) Share this | Link to this | Hansard source

I rise to oppose the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026, because it strikes at something quite fundamental. It's about the trust Australians place in their retirement system. Superannuation is not spare change for the government to raid when budgets tighten. It is deferred income. It's the product of decades of hard work, of discipline and of sacrifice. Australians make decisions about their future based on the rules set by this parliament and the government of the day, and they are entitled to expect that those rules will not be rewritten whenever it becomes politically convenient. This bill undermines that trust, and once confidence in the system is shaken it is extraordinarily difficult to restore. I've said time and time again that those on this side of the House would rather tighten the federal budget than the family budget. This bill is the consequence of a government that doesn't agree with that statement.

So let's turn to what the substance of this bill is, because, as a coalition, we have always said we will be constructive where we can be. There are parts of this bill that we do agree with, but there are also parts that we don't. The bill reintroduces Labor's division 296 super tax in a revised form. This has followed—and I'll give you the context—sustained pressure from the coalition and from industry. The government, as a result of that pressure, has corrected two serious design flaws: (1) it has abandoned the taxation of unrealised gains, protecting SMSFs, holding farms and small businesses from being taxed on gains that they have not made, and (2) it has agreed to index the $3 million threshold, which prevents bracket creep from slowly expanding the tax base over time.

These changes confirm that the original position that was taken by this government and by this Treasurer was fundamentally flawed. It also shows a broader issue with this government, and that is that Labor cannot be trusted with tax reform and that this Treasurer cannot be trusted with tax reform. So this bill now reintroduces division 296 in a revised form following the government's earlier proposal in 2023. Under the revised design, an additional 15 per cent tax applies to superannuation earnings attributable to balances above $3 million, resulting in an effective 30 per cent rate on realised earnings above that threshold. There is a new threshold of $10 million which applies a 40 per cent rate. The thresholds are now indexed, and the tax applies only to realised capital gains.

This bill exposes the fundamental difference between those on this side of the House and those in government. It is a difference that relates to our level of respect for Australians, our level of respect for those who work hard and save. We on this side of the House are not trying to create any sort of divide between those who are perceived to have and those who are perceived to not have. But at the last election Australians were not presented with any form of policy that longstanding superannuation settings would be fundamentally altered. They were not warned about these changes. These promises do matter in a democracy, and Australians do hold governments to account based on what they promise and what they don't speak about. Major structural tax changes should be put clearly and transparently to the Australian people. But this proposal appeared out of nowhere, with limited consultation and a rushed legislative timeline. That's why this debate has resonated so strongly with Australians and with Australians in my electorate on the southern Gold Coast, who speak to me time and time again about the issues they are facing under this Labor government.

We were told by the government that they were going to make life easier for Australians, for Australian families and for Australian businesses. But we've seen the absolute alternative, which is less flexibility and less choice. And life has been harder for Australians. It has been harder to pay the mortgage, to pay the bills, like the energy bill, and to make ends meet. The fact of the matter is that inflation and high interest rates have beaten this Treasurer and this government, and this legislation is a consequence of that, because we all know that, when this Labor government runs out of money, it comes after yours.

Many voices have spoken up against this proposal—many of which are not from our side of politics but from the other side of politics.

I'd like to speak in particular about the impact on small businesses and small-business owners because, make no mistake, this legislation is an attack on small businesses. They're looking at small businesses particularly closely because the reality is that so many Australians who own small businesses hold their assets in super.

As I've said, this legislation, this proposed bill, is the result of a government that has lost control of its spending. Labor's actually got a spending problem, not a revenue problem. The problem confronting Australia at the moment is that structural spending growth is outpacing sustainable economic growth, and, when governments spend beyond their means, they inevitably reach for new taxes to fill the gap—to fill the hole. That's exactly what we are witnessing here today. Rather than confronting that waste and confronting that lack of fiscal guardrails, this government is hunting for new pools of capital and wanting to tax those. This is an absolute breach of trust in Australia. It's also symptomatic of a broader pattern, which is that this government puts higher spending first and then new taxes to pay for it later. That's not reform; that's fiscal mismanagement.

I've heard some of the contributions of those opposite, and they've spoken about the low-income superannuation tax offset and said that the inclusion of that is evidence of balance. Now, we have been honest about our position on this, and we haven't gone against the government on this part. We have said that any measure that supports low-income earners building retirement savings is welcome. It's welcome from this side of the House of Representatives. But we do also need to be honest about the scale and the timing. The reality is that the low-income superannuation tax offsets do not put money back into household budgets right now, today. They don't lower the grocery bills now. They're not assisting in paying electricity bills now. And that's the problem—because Australians across the Gold Coast, across my electorate and across the country are all facing cost-of-living pressures right now, and future offset adjustments in superannuation do very little to relieve those stresses and those pressures.

Instead of coming after a new form of tax, if the government were actually serious about addressing the issues that matter to Australians, about addressing the cost pressures that Australians, their families and their small businesses are facing, they would tackle inflation at its source—instead of trying to impose taxes where they don't need to be imposed. They would focus on their excessive spending and on weak growth, rather than reshuffling offsets within the existing retirement income system.

This legislation is symptomatic of where Australia is going under this Labor government. Labor is taking this country in a direction—in fact, we're already here—of high tax and of high spending. This proposal should not be viewed, in and of itself, in isolation. It is Labor wanting to spend more and pour debt petrol on the inflation fire.

But, at its core, this debate is not about a balanced threshold or a revenue line in the budget. It's actually about whether Australians can rely on the long-term promises that are made by those who represent them. It is about whether we as a parliament choose to reward prudence or choose to punish it. It's about whether we strengthen self-funded retirement or slowly erode it. If we do believe in aspiration, if we believe in stability and if we believe that Australians who work hard and save diligently should not become an easy target for shifting fiscal pressures, then we cannot support this bill. For these reasons, I urge those around me in this place who are supposed to stand up for and represent their constituents to join us in rejecting it.

Trish Cook (Bullwinkel, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in strong support of the Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026. In this place, we often talk in billions of dollars and percentages of GDP. But, for the people that I represent in Bullwinkel, those numbers are secondary to a much simpler question: can I afford to retire? My life before politics was shaped by two very demanding and very different worlds. As many in this House know, I spent decades as a registered nurse and midwife, and I've seen and experienced the physical toll that 40 years of labour takes on a person. But I also spent a decade concurrently during that time as a small-business owner. I know what it's like to sit at a kitchen table late at night looking at the books, making sure that the BAS is lodged and ensuring that my staff are fully and properly paid and that their super is covered. I understand the pressure of meeting a payroll and the pride of building something from the ground up. When I look at this bill, I look at it through both those lenses—worker and employer. I see it as a nurse who wants a dignified retirement for my patients, and I see it as a former business owner who knows that every dollar in a budget, whether it's a small-business budget or a Commonwealth budget, must be spent where it does the most good. This bill is about ensuring our superannuation system remains the envy of the world, making it stronger, fairer and, most importantly, sustainable for the long haul.

The electorate of Bullwinkel is a microcosm of the Australian economy. We have the bustling suburban centres of Forrestfield and High Wycombe, where young families are working hard to get ahead. We have the hills communities of Kalamunda and Mundaring, filled with professionals and healthcare workers. And we have the historic heart of the wheat belt in Northam and York, where our farmers and regional business owners keep the state moving. In every one of these towns, people value fairness. They don't mind people being successful. In fact, they celebrate it. But they do expect the system to be balanced.

Currently, our superannuation tax concessions cost the budget more than $60 billion per year. To put that in perspective, by the 2040s, these tax breaks will cost the Australian taxpayer more than the entire age pension. When I talk to small-business owners in York, they understand that you can't keep a system running if the concessions are being swallowed up by a tiny fraction of the population at the expense of everyone else. Around 38 per cent of super earnings concessions go to the top 10 per cent of income earners. That isn't a fair go. That's a structural imbalance that we have a responsibility to fix.

Schedules 1 to 3 of this bill implement the government's policy to better target tax concessions for individuals with superannuation balances exceeding $3 million. So let's be very clear about who this affects. The policy is expected to affect less than half a per cent of Australians. In Bullwinkel, that's a handful of people. For the other 99.5 per cent of my constituents—the teachers, truckies, retail workers and farmers—their tax treatment will remain exactly the same. Their earnings correspond to balances below $3 million and will continue to be taxed at the concessional rate of 15 per cent. For those with balances between $3 million and $10 million, the tax rate will be up to 30 per cent. For the very small group—less than one per cent of Australians—with balances above $10 million, the rate will go further and be increased to 40 per cent.

As a former business owner, I know the importance of certainty. That's why Labor has listened to feedback over the last two years, to get the design right, and we have made amendments. We have indexed the $3 million to $10 million thresholds to the transfer balance cap. We are using established income tax concepts to reflect realised gains, and we're ensuring that all members of the defined benefit schemes are treated in a commensurate fashion. This isn't about penalising success. It's about recognising that a $10 million superannuation balance is no longer about retirement; it's a tax advantaged wealth management vehicle. By trimming the concessions at the very top, we secure the system for everyone else.

While the opposition wants to focus on the top half a percent, I'd rather focus on the 1.3 million Australians who will benefit from schedule 4 of this bill. We are boosting the low income superannuation tax offset, or LISTO. This is a game changer for low-income workers in Bullwinkel, and it's good to hear that the opposition support this component. We are increasing the maximum payment from $500 to $810 and lifting the eligibility threshold from $37,000 to $45,000. We have over 100,000 sales assistants, over 50,000 administration workers and over 50,000 aged carers and disability carers in the nation who will benefit. These are the people that I worked alongside in the health system. These are the people who keep our local shops running in Forrestfield. For a part-time worker in Mundaring earning $40,000 a year, this boost, combined with other reforms, could mean an extra $15,000 in their account by the time they retire. We all know the value of compounding income and savings. That's the difference between a retirement spent counting every cent and a retirement spent with dignity.

As a former midwife, I've spent my life advocating for women. We know that the current super system has a glaring gender gap. Because women often work part time or take significant breaks to care for children or ageing parents, they retire with significantly less super than men. Around 60 per cent of the people who will benefit from the LISTO payment boost are women. We're talking about 750,000 women across Australia who will now have a fairer tax concession on their super contributions. This works hand in hand with our decision to pay super on paid parental leave and our move towards payday super. We're making sure that the super system finally works for the people who do the most important work in our society: the carers and the parents.

Labor has built the superannuation system. We built it because we believe that the wealth of this nation should belong to the people who created it. Imagine if we didn't have super. What a burden that would be on our tax dollar. Every step of the way, the coalition has fought this. They fought the 12 per cent guarantee. They want people to raid their retirement savings, their super savings, for home deposits, which would drive up house prices and leave people destitute in their old age. They will stand up in this debate and cry 'class war' because we are asking people with $10 million in super to pay a bit more in tax. But they're silent about the cleaners and the retail workers, who haven't had a fair go from the super tax system for years.

As a former business owner, I know that a good leader looks at the long term. You don't just look at the next quarter; you look at the next decade. These bills are long-term leadership. They ensure that the road to recovery for our budget is paved with fairness.

The Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026 is ultimately about values. It's about the nurse in Northam who deserves to know that her super is growing. It's about the small-business owner in Kalamunda who wants a sustainable economy for their children. It's about the 1.3 million low-income workers who are finally getting the help they need with their retirement savings. There are 14 times as many people who will benefit from the boost to LISTO as there are people affected by the $3 million threshold, and that is the only statistic you really need in order to understand whose side the government is on. We are on the side of workers, we are on the side of women and we are on the side of the future. I commend these bills to the House.

Jamie Chaffey (Parkes, National Party, Shadow Assistant Minister for Agriculture) Share this | Link to this | Hansard source

I rise to speak against 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. We know the government's finances are in a mess. We will soon hit $1 trillion in debt, with an interest bill of $50,000 a minute. It's hard for most Australians to even think in terms of a trillion dollars. Not so long ago, a billion dollars seemed to be an enormous amount of money. Since the Albanese government came to office four years ago, $100 billion in debt has been added, so this government is obviously scrambling to find a way to keep the boat afloat.

Their initial super plan was to tax unrealised capital gains. We can all see why this is wrong. You are taxed on your earnings, you're taxed on your savings, you're taxed on your superannuation. The latest and greatest idea was to tax people on money that they had not even earnt yet. There is only so much that Australians can take, and this was a tax that went too far. That was super tax 1.0. As complicated as tax and superannuation can be, blind Freddy could see that this was not fair, and our hardworking, innovative farmers and small-business owners in the electorate of Parkes are a long way from being blind Freddy.

Due to inflation, land values have gone up everywhere, and the family farm may now be worth significantly more than it was back when the grandparents first bought the block. That does not mean that farmers who live there have more money. It does not mean bigger income. These are their family homes and their livelihoods. It is essential that farmers get a fair go so that they can continue to grow the food and the fibre for this nation but also for other nations through our exports. Superannuation tax 1.0 was not a fair go.

These days, $3 million is not a lot of money—nowhere near as much as it used to be. As I just stated, Australia is looking at a trillion-dollar debt. More often than not, the family home is up around a million dollars. For most places, that's just the starting point. Superannuation tax 1.0 was a plan to punish farmers and small-business owners by attacking their unrealised gains in superannuation. It was a move that was shockingly ignorant to the way that self-managed superannuation funds work. We're told over and over again how important it is to save for our own futures and to avoid placing the burden on future generations, yet people who have been saving all their lives to do so were looking down the barrel of a tax that would have forced them to sell portions of their property and raided their nest eggs. Again, it would have targeted those who are just trying to do the right thing.

It was only after a sustained campaign from the Liberals and Nationals, when we highlighted over and over again just how significantly this would impact farmers and small-business owners, that the Labor government finally backed down. And now we have this, the new version, super tax 2.0. The coalition and the community forced Labor to abandon the indexation freeze and the taxation of unrealised gains. It was a very quiet admission that they had got it completely wrong and been completely unfair in attempting to go forward with those superannuation changes.

Now we are, as I said, looking at super tax 2.0. This one diverts attention from the crippling guidelines of super tax 1.0, but it does so with a stunning lack of detail. What is this new improved super tax all about? How about a bit of transparency for those it is going to impact, who are still reeling from the threat of being taxed on money that they had not even earnt? How will super tax 2.0 work? Who will it impact, and how much will it impact them? Show us the detail. Show Australians how you really feel about their finances. Show us you have listened and learned from the super tax 1.0 debacle.

Unlike this Albanese Labor government, regional Australians have gone without. They've worked hard, they've saved their pennies and they've made a plan for their own future and for the future of other generations. They have done this while being taxed every step of the way. They've done this while they've faced uncertain seasons, droughts, floods, pandemic, the rise and fall of commodity prices, inflation—it just keeps on going. Australians deserve to know what this latest tax grab to fuel the Labor government's spending spree really means. Spend now, tax later: Labor is looking for more ways to pay the bill, and, as so often happens, the buck stops in regional Australia. Is it fair? Show us how. Is it better? Show us how. Will it mean certainty for Australia's future? Well, then show us how.

Labor has lost Australians' trust. They have lost trust over promises about inflation, about high interest rates, about the cost of living. The Labor government is pointing at increases in the low income super tax offset as great news. I welcome the support that helps people who are on low incomes to build their retirement savings. But this does nothing for Australians who are on a tight budget today. It doesn't put money back in their pockets for the escalating food costs, energy costs or mortgage repayments. A future offset does not help them now. They are also concerned about the removal of the death tax exemption. This will hit families when they're at their most vulnerable. When your loved one passes away, the last thing you need to be worried about is the complexities of a superannuation system.

Of major concern is the additional taxation rate on earnings on superannuation balances above $3 million that will start in the next taxation year. This will be taxed at an extra rate of 15 per cent. That's a total of 30 per cent taxation, or double the current taxation rate. Earnings on the portion of superannuation above $10 million will attract a whopping 40 per cent.

I'd like to give a real-life example of someone from my electorate, from Parkes—Scott, from a property near Forbes. He called with concerns when super tax 1.0 was on the horizon. Scott owns a farm through his self-managed superannuation fund that is now worth more than $3 million. Anyone who owns a farm knows that $3 million doesn't amount to much these days when it comes to farmland. Superannuation tax 1.0 would have meant big changes for Scott in a big hurry. Superannuation tax 2.0 also carries concerns. If a farmer is to retire to town and sell the family farm for more than $3 million, the earnings would be taxed at 30 per cent on the portion above $3 million. That's double the current tax. If it were to sell for more than $10 million, that farmer would pay 40 per cent on the tax of the portion above 10 million. How fair is that? This property might have been in the family for generations. Now Scott will lose a significant portion of the sale price to Labor's new superannuation tax 2.0 and his retirement nest egg.

This is an enormous increase on taxation for people who are banking on that money for their retirement. Australians are struggling right now, and they need to know that they are saving for a reason. That reason should not and cannot be that the federal government is looking for other sources of money to shore up the country's debt or to pay for ill advised promises. If, even in this out-of-control economy, farmers and small-business owners have managed to show restraint, dedication and fiscal wisdom, they need to know that the government can do the same. Labor has a spending problem, not a revenue problem. The problem confronting our country is structural spending growth that is outpacing sustainable economic growth.

When government spend beyond their means, they inevitably reach for new taxes to fill the gap and to fill the hole. That is precisely what we are witnessing here. Rather than confronting waste, rather than prioritising programs and rather than restoring fiscal principles, Labor has chosen to hunt for new pools of capital to tax. Trust is fundamental in tax reform. Australians accept reform when it is principled, predictable and based on broad consultation. What they do not accept is the retrospective tinkering and ad hoc changes to ideological experiments dressed up as modest adjustments. This proposal reinforces a broader pattern: higher spending first, then new taxes to pay for it later. That is not reform; that is fiscal mismanagement.

Basem Abdo (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

There are moments in this parliament when legislation is technical, and there are moments when legislation speaks directly to the kind of country we want Australia to be. This is one of those moments, designed to build a stronger and fairer super system because superannuation is not just a policy instrument; it is one of the most powerful, democratising economic reforms in Australian history. It is the reason millions of Australians retire with dignity instead of dependence. It is the reason working people—nurses, teachers, tradies, warehouse workers, small-business employees—collectively own a stake in this nation's economic future.

Superannuation is deferred wages. It is not a gift. It is not largesse. It is earned pay slip by pay slip and preserved for retirement. Because of that, this parliament has a responsibility to ensure that the system remains fair, sustainable and true to its purpose. That is exactly what these bills do. This parliament is legislating the objective of superannuation: to preserve savings to deliver income for a dignified retirement alongside government support in an equitable and sustainable way. This objective matters because superannuation was never designed to be an unlimited tax shelter; it was designed to fund retirement income. If we lose sight of that, we risk eroding public confidence in the entire system, and confidence is everything.

Superannuation tax concessions are generous. They cost the budget more than $60 billion every year. Without reform, they are projected to exceed the cost of the age pension in the 2040s. Now, concessions are appropriate—they encourage savings and they reduce future pension liabilities—but they must be targeted. Currently, 38 per cent of super earnings concessions go to the top 10 per cent of income earners, while 54 per cent go to the top 20 per cent. That concentration cannot be ignored.

It's important to understand exactly what the low-income super tax offset, or LISTO, is, because this goes to the heart of fairness in our super system. When a low-income worker receives a super contribution from their employer, that contribution is taxed at 15 per cent inside the super fund. But, if that worker's marginal tax rate is lower than 15 per cent or they pay little or no income tax, they can effectively pay more tax on their super than on their wages. That is unfair. LISTO exists to correct that. It refunds the tax paid on concessional super contributions up to a capped amount so that low-income earners are not penalised simply because they earn less.

This legislation strengthens LISTO. From 1 July 2027, the LISTO threshold rises from $37,000 to $45,000, and the maximum payment increases from $500 to $810. Crucially, this legislation explicitly links LISTO settings to income tax thresholds and the superannuation guarantee rate, ensuring the offset keeps pace structurally into the future. This is not cosmetic; it is structural reform. In 2027-28, 770,000 additional Australians will become eligible; 490,000 Australians will receive a higher payment; 1.3 million Australians will benefit directly; around 750,000 are women; and around 550,000 are under 30. The total number eligible rises to 3.1 million Australians. There are 14 times as many people benefiting from this LISTO boost as there are people with more than $3 million in super. For a low-income worker, up to $810 a year into super is meaningful as it compounds into retirement. It helps narrow the gender retirement gap. If we are serious about closing retirement inequality, we cannot ignore this reality. That is dignity. That is security. That is fairness.

The benefits of this reform are not abstract; they will be felt directly in communities like mine. Analysis by the Super Members Council shows that in Calwell alone around 8,180 low-income workers will receive a boost to their superannuation because of the changes to the low-income superannuation tax offset. On average that means about $399 more going into retirement savings of each of those workers per year—delivering around $3.3 million in additional super savings into our community. Importantly, the majority of those who benefit are woman—more than 5,100 women in Calwell—helping to narrow the super gender gap and strengthen the retirement security of family across Melbourne's north.

The Treasurer captured this in a recent interview on ABC Radio National. He said:

The legislation does 2 things. It does make the concessional tax treatment fairer for people with the biggest balances, but it also increases the low-income super tax offset for people with the lowest balances.

He described it as making the super system fairer from top to bottom, and he is right. This is an important intergenerational issue. Younger Australians are entitled to ask whether a system costing more than $60 billion a year is sustainable. This legislation ensures that it will be.

The Treasurer also said if those opposite:

… vote against this legislation they will be voting for less super for people on low incomes, and they will be voting for even bigger tax breaks for people who have $10 million or $20 million or $30 million in their super already.

That is the choice before this parliament. You either strengthen retirement savings for super-low-income Australians, or you push more tax benefits, more tax concessions to those with high retirement savings going into the millions and tens of millions.

Let us also recognise what is actually structurally important about this legislation. For too long the low-income super tax offset was static while the broader tax system moved. Income tax thresholds changed. The superannuation guarantee increased, but the LISTO threshold sat still. That is how inequity creeps in, not through dramatic change but through drift. This legislation ends that drift. By explicitly linking LISTO thresholds and payment rates to personal income tax settings and the superannuation guarantee, we embed fairness into the architecture of the system. We futureproof it. We ensure that low-income workers are not quietly left behind every time structural reforms are made elsewhere, because superannuation is a long game. A 22-year-old apprentice entering the workforce today will contribute for 40 years. A retail worker earning $42,000 a year will rely on these structural settings compounding over decades. The decisions we make now echo across a working lifetime, and the decisions we avoid echo too. If we pretend the balances of $10 million, $20 million and $30 million should continue receiving unlimited concessional treatment, the fiscal pressure does not disappear; it accumulates and it compounds, just like super itself.

Intergenerational fairness cuts both ways. It means strengthening balances for low-income workers today, and it means ensuring tomorrow's taxpayers are not asked to fund unsustainable concessions for the very few. That is responsible economic management. Superannuation did not drift into existence. Labor built it—deliberately, systematically and against resistance—and that is why we will defend it.

Let us not pretend the politics here are new. The Liberal Party opposed superannuation at its inception. They froze the superannuation guarantee. They delayed increases. They undermined accountability reforms. Now they present themselves as defenders of aspiration, while defending unlimited concessions at the very top. The Leader of the Opposition and his failed economic team produce reactionary thought bubbles, few of them containing actual thought.

What they cannot accept is the idea that working people might accumulate capital without their permission, that working people can build wealth and that working people can control their financial future. Superannuation democratises capital. It turns wage earners into investors. It gives working Australians ownership in infrastructure, industry and enterprise. For Labor, that is the point. Some opposite have always been uncomfortable with that. They frame the Australian dream as trade-offs: choose between owning your home or having a comfortable retirement; draw down your super to patch over housing failures; downgrade your expectations. We on this side of the House, the Albanese Labor government, reject that. The Australian dream has always been both: a home of your own and a dignified retirement after a lifetime of hard work. We will not force Australians to choose, and we will not defend unlimited taxpayer subsidies for those with $20 million in super, while telling ordinary Australians to tighten their belts.

This side of the House stands with working people. We stand with the nurse, the apprentice, the retail worker, the single parent returning to work and young Australians starting their first job. Superannuation is not a loophole. It is not a shelter. It is not a privilege for the few. It is a pillar of economic security for the many. Labor built it, Labor strengthened it and Labor will defend it—stronger, fairer and more sustainable. I commend the bills to the House.

Julian Leeser (Berowra, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

The Treasury Laws Amendment (Building a Stronger and Fairer Super System) is a bill that deals with the trickiest tax that Labor have ever sought to bring into this place since Federation, and we as the coalition are deeply opposed to what they've been trying to do.

This bill is also evidence of a policy backtrack. Coalition and community pressure forced Labor to abandon the taxation of unrealised capital gains and indexation freeze. This would have done untold damage. The government has been found out and has retreated under pressure. That's what we're seeing in what they've done with this bill. Thanks to sustained scrutiny from the coalition—scrutiny that has been applied by many of my colleagues over many days in many different fora—from the superannuation sector, who have expressed deep concern about the government's proposals, from small businesses, whose retirement is very important and whose savings are often tied up in their businesses, and from everyday Australians, who saw the injustice of the proposal, Labor was forced to step back from the most outrageous elements of the proposal—that is, the taxation of unrealised capital gains. This was not a proposal that was just aimed at hurting retirees; this actually was aimed at hurting future generations, stealing the future of younger Australians away from them without their knowledge or their understanding.

We exposed a clear breakdown in the relationship between the Prime Minister and the Treasurer, the principal designer of this deeply flawed policy proposal. The original design to tax unrealised capital gains represented a fundamental break from longstanding principles of the Australian tax system. It demonstrated, in my view, that this government fundamentally doesn't understand the way people make decisions and the way in which investment is conducted in this country.

Australians have always understood that tax is paid when income is realised, when a gain is crystallised and when cash is actually in their hand. What the government was doing here was effectively just proposing to tax paper gains, particularly in volatile asset classes. This wasn't a minor tweak. Imagine, for instance, if you had purchased Atlassian shares, which went up massively; you would have been taxed on the unrealised gain of those shares. But, when those shares fell, you weren't able to write that off. This was a structural shift that would have set a dangerous precedent across the entire tax base, because asset classes go up and asset classes go down, and if you're holding an asset class that's not crystallised—where you don't have cash in hand—you have to sell the asset class or you have to find money elsewhere in order to pay the tax.

Equally concerning was the government's refusal to index the $3 million threshold. In an inflationary environment—and we know that, under this government, inflation has got out of control and has been made worse by the Treasurer and his willingness to pour debt petrol on the inflation fire—failing to index thresholds is indeed a silent tax hike. More and more Australians would have been captured, not because they were wealthier in real terms but because inflation would have eroded the value of the threshold. That's actually bracket creep by design, and it underscored the flawed nature of this policy. If it wasn't a flawed policy, it was certainly a sneaky trick to take away more of people's hard-earned savings.

We, as Liberals, believe very firmly that people should be able to plan for their retirement, that they should be able to put away their savings and that they should be able to invest with confidence and certainty. The government's backdown demonstrates one thing clearly: this actually was never a settled policy that was grounded in principle. Instead, it was a blatant revenue grab that was exposed and that collapsed under scrutiny. But Labor was being sneaky. At the last election, they didn't present Australians with a policy to tax unrealised gains in superannuation. Australians were not told that longstanding superannuation settings would be fundamentally altered. Australians were not warned that indexation would be stripped away. Promises matter in a country like Australia, where people go to the ballot box to choose their government and try to make a decision based on the available information.

Major structural tax changes should be put clearly. They should be put transparently to the Australian people. Instead, this proposal seemed to appear out of nowhere, with limited consultation and a rushed legislative timetable. That's why this debate has resonated so very strongly with Australians, who instinctively understand that, when something's been slipped in under the cover of darkness without their consent, it's a very bad idea. We're talking about retirement savings. We're talking about things that Australians are trying to use as they plan for the future—the nest egg that they've built over decades of hard work and self-sacrifice. If we're going to muck around with Australians' nest eggs, the bar must be set much higher.

We've got a government here that's demonstrated that it can't be trusted. We were promised by the Labor Party, by Treasurer Chalmers, that they'd beaten inflation and high interest rates. Well, people paying higher mortgages as a result of the latest interest rate rise will see that they haven't beaten inflation and they certainly haven't beaten interest rates. We were told by this government that it was going to make life so much easier for families, yet families have less flexibility and less choice. Life is just that much harder for hardworking Australians when they're paying their mortgages, when they're paying their bills, when they're paying their energy bills and when they're having to make ends meet. I think about the families in my own electorate, families that are having to make harder and harder choices each year. Do they put food on the table, or do they pay their power bills? Can they afford to put their kids in weekend sport, or do they buy a new pair of shoes? Can they pay their insurance? All of these issues are issues that confront ordinary families in Berowra because of Labor's failure to get the cost of living under control.

The fact of the matter is that inflation and high interest rates have beaten the Treasurer and they've beaten the government. You know this proposal is bad when three absolute Labor luminaries come out and attack the proposal. It's rare that you hear people on this side of the House quote from Labor luminaries, but when Labor luminaries are making good points it's worthwhile noting some of the important things that they say. One of those Labor luminaries, of course, is Sally McManus, the head of the Australian Council of Trade Unions. She warned, on Labor's proposal to have the $3 million limit without indexation:

I do think it's got to be indexed because you've got to make sure eventually people don't end up there.

That was one of the real worries about Labor's original proposal.

The former ACTU secretary Bill Kelty said:

I think taxing unrealised capital gains is bad policy. It distorts the effective tax. Changes your income flows, and if it was on superannuation generally, there would be a revolution about it. It would destroy super.

This is from one of the architects of the super system, who was saying that what was happening under Labor's policy would actually have destroyed the system he sought to create. The father of the superannuation system, Paul Keating, has similarly said that workers would be caught up, and industry analysis has found that claims by the government that it would only hit a small number of Australians were furphies and that it was going to hit 1.8 million Australians. They're looking at small businesses particularly closely because so many Australians who own small businesses hold their assets in super. That's how they put aside money for their retirement.

The problem confronting our country is structural spending growth that is outpacing sustainable economic growth. That is the major problem that is driving prices in this country today. When governments spend beyond their means, they inevitably reach for new taxes to fill the gap, to fill the hole. That's precisely what we're witnessing here. Rather than confronting waste, rather than prioritising programs and rather than restoring fiscal discipline, Labor has chosen to look for new pools of capital to tax. That's what this taxation regime is all about.

Trust is fundamental in tax reform. Australians are happy to have tax reform when it's principled, when it's predictable and when it's based on broad consultation. What they don't really like is retrospective tinkering. They don't like ad hoc changes. They don't like when ideological experiments are dressed up as so-called modest adjustments. The proposal in these bills reinforces a broader pattern. First, the government engages in higher spending, then they have to find new taxes to pay for that spending. It's not reform; it's just straight-out fiscal mismanagement.

There are new risks: the removal of the death tax exemption, impacts on surviving spouses and impacts on TPD recipients. Beyond the headline rate and the threshold changes, this legislation introduces serious structural risks into our economy. The removal of the effective death tax exemption creates uncertainty for families at precisely the moment that they are most vulnerable. Surviving spouses who rely on superannuation balances to maintain stability after the tragic loss of a partner could face additional tax complexity and reduced security. We want to support widows in our country, but this creates increased uncertainty.

Total and permanent disability benefit recipients are another cohort that must be considered carefully. My grandfather, a war veteran who fought in the Second World War, was a prisoner of war in Changi and served on the Burma Railway, was a TPD benefit recipient. This cohort must be considered very carefully. These are Australians who, through no fault of their own, are no longer able to work. Their superannuation is not an abstract investment vehicle; it's their lifeline. Any changes that increase volatility and reduce predictability or complicate access to those funds carry real human consequences for some of our most vulnerable Australians. Tax policy can't be designed in isolation from lived reality. When retirement income settings are destabilised, confidence in the entire system is eroded.

I want to talk a little bit about the low-income superannuation tax offset, or the LISTO. The increases in the LISTO are actually welcome, but they're modest, and, unfortunately, because of Labor's reckless spending, they don't address the cost-of-living pressures that Australians are facing today. The government has pointed to increases in the low-income superannuation tax offset as evidence of balance. Any measure that supports low-income earners building retirement savings is always welcome, but we must be honest about the scale and the timing. The low-income superannuation tax offset adjustment, while positive at the margins, does not put money back into household budgets today. It does not lower grocery bills. It does not ease mortgage repayments. It does not reduce electricity costs. It does not reduce insurance costs. It does not reduce all the other expenses that households face. Australians are facing immediate cost-of-living pressures. A future offset adjustment in superannuation does little to relieve those stresses now.

If the Albanese government is serious about helping households, it must tackle inflation at its source. It must tackle its excessive spending and its weak growth, rather than reshuffling offsets within the retirement income system. Orthodox economic policy in a time of rising prices is to reduce government spending and to make a more productive economy by reducing regulation. This government, unfortunately, is doing the opposite.

This proposal shouldn't be viewed in isolation. It's about Labor being able to spend more and pour more fuel on the inflation fire. When spending accelerates without corresponding structural reform, governments eventually reach the limits of conventional revenue sources. They've got to test the new boundaries. Thresholds are left unindexed. There are new bases for taxation and new interpretations of income. This is a government that is scrambling to find more revenue. Today, it's superannuation balances above $3 million. Tomorrow, it might be another threshold, another definition or another set of asset classes.

Once the principle of taxing unrealised gains is entertained, it does not remain neatly contained. That's why, earlier this year, we asked questions in the House about whether they propose to tax unrealised gains on the family home. If this is a good idea in superannuation, as Labor has been prosecuting, why not on other asset classes as well? We know it's a bad idea. That's why we oppose it. Australians deserve clarity about the direction of travel. Is this just an isolated adjustment, or is it the opening chapter in a dark age of high-tax, high-spending approaches to governing? Is it a time where people who have made provision for their assets will not be able to have certainty around their assets? This is sadly what life has become like under a Labor government that has spending out of control and is now coming up with new, alternative ways to find extra revenue.

Daniel Mulino (Fraser, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I rise today to speak in support of the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 and the associated Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026.

Firstly, I'd like to recognise the work of the Treasurer and the Department of the Treasury for getting this bill into parliament. This has been after an extensive round of consultations and work with a wide range of stakeholders over a long period of time. This is a complex set of reforms, and that is why we have taken the time to get this right. This is also a very important set of reforms, with much at stake, strengthening Australia's world-class superannuation system, making it fairer, more sustainable and better aligned with its core purpose of helping Australians achieve a dignified retirement. This bill delivers on that purpose.

This bill will strengthen the superannuation system by increasing tax concessions for workers on low incomes, by boosting the low income superannuation tax offset—LISTO. The bill will also ensure that concessions for individuals with large balances above $3 million are better targeted and more equitable. Schedules 1 to 3 of the bill address a clear and growing problem in the system. Tax concessions for very large superannuation balances are increasing in cost and becoming less sustainable. At present, super tax concessions cost the budget more than $60 billion per year and will exceed the cost of the age pension in the 2040s. The distribution of those concessions is skewed. Around 38 per cent of the benefit from super tax concessions goes to the top 10 per cent of income earners, and 55 per cent goes to the top 20 per cent. These concessions were intended to support Australians in retirement, not provide tax concessions for wealth accumulation or estate planning.

The legislation before the House better targets super concessions and reflects practical changes to the design and implementation of the original policy, which take into account more than two years of feedback. From 1 July 2026, the total concessional tax rate applied to earnings on balances between $3 million and $10 million will be up to 30 per cent, and earnings on balances above $10 million will be taxed at a concessional rate of 40 per cent. Balances below $3 million remain unchanged and will continue to be taxed at 15 per cent. Both thresholds—the $3 million and $10 million caps—will be indexed to maintain alignment with the transfer balance cap. Earnings will be calculated based on established income tax concepts and realised gains. Importantly, these changes also apply fairly to members of defined benefit schemes. At a super fund level, fund trustees will report the relevant earnings to the ATO, which will ensure the system remains transparent and efficient.

These are sensible reforms to concessional settings. One would think that, after such a lengthy consultation period and the government's willingness to work with all parties, the opposition would support these changes. After all, these reforms will affect less than 0.5 per cent of Australians with superannuation accounts in 2026-27, and the higher rate on balances above $10 million will affect fewer than 0.1 per cent. Unsurprisingly, those opposite seem to be more focused on the impact on this tiny cohort instead of celebrating that we are delivering a more sustainable system and delivering support to those who need it most.

That takes me to schedule 4 of the bill, which boosts the low-income superannuation tax offset, LISTO, and expands eligibility for this benefit. The Albanese government is delivering more help to low-income workers, including hundreds of thousands of women, young people and part-time workers who rely on fair superannuation contributions to build security for the future. From 1 July 2027, LISTO will increase by $310, rising to $810 as the maximum benefit that can be provided, and the income eligibility threshold will increase from $37,000 to $45,000. These changes ensure that low-income workers receive a fairer tax concession on their super contributions, consistent with the government's third round of tax cuts coming into effect in 2027.

What does this mean in practice? Workers will receive up to $810 per year in additional contributions to their superannuation account, with the average LISTO payment increasing substantially. Over a working life, this could mean up to $15,000 more at retirement, depending on an individual's income over their career. That's real money that makes a real difference. In 2027-28, because of these changes, 770,000 additional Australians will be eligible for LISTO, 490,000 people will receive a higher payment and a total of 3.1 million Australians will be eligible. Around 60 per cent of those beneficiaries will be women. In fact, more than 1.3 million Australians will benefit directly from these changes, including around 750,000 women and 550,000 young people under 30.

I'd like to acknowledge the tireless advocacy of the ACTU and its affiliated unions that represent their members, who work to keep Australia running every day. The change to LISTO will benefit over 100,000 sales assistants, more than 50,000 administrative workers and more than 50,000 aged-care and disability care workers. This will make a real difference to their savings and a real difference to their retirements. Let me put this into perspective: there are 14 times as many people who will benefit from the boost to LISTO as there are Australians with over $3 million in super. This is fairness in action.

These reforms, of course, are part of a much broader agenda. Since coming to office, Labor has strengthened the superannuation system in multiple ways. We are paying superannuation on paid parental leave for the first time, we've introduced payday super to ensure contributions are paid on time and we have increased the superannuation guarantee to 12 per cent, alongside legislating the objective of superannuation itself. Labor built Australia's superannuation system, and we remain committed to ensuring it continues to deliver for future generations—stronger, fairer and more sustainable than before. This bill delivers more help to low-income workers, makes concessions fairer and protects the long-term sustainability of the system on which millions of Australians rely. I commend the bill to the House.

Aaron Violi (Casey, Liberal Party) Share this | Link to this | Hansard source

It's a day ending in Y, and we've got another ALP special. We have a bill that has a very impressive-sounding name, but it's actually hiding what it really does. Building a stronger and fairer super system sounds good. It sounds reasonable. It sounds fair. It's very much Labor. The first point they have to do is name the bill well. That's about the only thing they generally get right: an impressive name. What this bill, the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026, really is is a broken promise and higher taxes for the Australian people. When you break it down, that is what this bill is about: a broken promise and higher taxes for the Australian people. The reason this government needs higher taxes is to pay for their tax-and-spend agenda and to pay for the significant increases in government spending that are driving higher inflation and driving higher interest rates for the Australian people. That is the reality that is being lived in so many communities across Casey and across the country.

Although, if you had the opportunity to listen to the Prime Minister today, he said that living standards are up today and the Australian people have never had it better. I thought I'd heard some disconnected Canberra-bubble statements in my time in this House, but I think that takes the cake. With a straight face, the Prime Minister told everyone in the country that their standard of living today has improved and they're doing better. Could you be more out of touch? And that's why this government needs to continue to increase taxes on the Australian people. There are some really concerning elements to this bill that we should look at, which are the changes that they've made and what they've taken out. The Australian people should be really concerned about that broken promise, but they should also be concerned that this government, this prime minister and this treasurer thought that taxing unrealised capital gains would be an acceptable way to change the tax system. This government put forward a system that would tax unrealised capital gains. What does that mean in simple terms?

It means, if you're a farmer in my electorate of Casey or anywhere across the country and you happen to have land that you own and grow crops on, if that land happens to be worth more than $3 million—let's call it $4 million in land—and you put that land into superannuation as part of an arrangement because your children are now working the land and they pay rent on that land to you—let us be clear. The rent was so you could feed yourself and pay your bills; you're not making a big profit on that. Many in my community undertake this. It's not looking to dodge tax; it's looking to pass it to the next generation and make sure that it's sustainable for those families that have worked that land for 50 to 60 years if not longer and are now looking to retire. So it can be transitioned generationally to their children. Those farmers do it tough. As my uncle, who is a farmer, likes to say, 'For three years you'll make money, for three years you'll lose money, for three years you'll break-even, and if you get really lucky you'll make a dollar in that 10th year, and it makes it all worth while.'

But this government said to every Australian and every Australian farmer: 'We think it's reasonable that we take money off you for the value of that land. Even if you're not looking to sell it and even if you're not looking to do anything with it, we're going to make you pay money to us on land that you're not looking to realise, on land you are not looking to sell and on land in which you have no cash to use.' Every Australian should be concerned that every member opposite thought that was reasonable. Day after day, they defended the principle of taxing unrealised capital gains. They finally backflipped and saw a little bit of sense once they realised they weren't going to get it through, but that doesn't change the fact that they all thought it was reasonable. They all defended it. They continued to run the line that the farmers of Casey, the small-business owners of Casey, the farmers of the country and the small-business owners of the country, should have to pay tax on money that they do not have and on something that they have not earned.

The other element to this that is deeply concerning is the broken promise. What's next? We know we can't trust the government when it comes to tax because they broke their word on tax when they said they weren't going to change the tax system. They backflipped and broke their word. They said they weren't going to change the superannuation system. They're now changing the superannuation system. So every Australian has the legitimate right to ask themselves: what's next? We've repeatedly asked the Prime Minister and the Treasurer if they would rule out taxing the family home, and they won't rule it out. They're not prepared to rule it out. So, when you join the dots, every Australian has to legitimately be fearful that housing is next.

We know that the Prime Minister emphatically ruled out before the last election that they had any plans to change the capital gains system or negative gearing in this country. 'My word is my bond' was the statement from the Prime Minister before the 2022 election. We saw that that word is not worth anything because he broke that word and he broke his bond with the Australian people after the 2022 election. So, when this Prime Minister gives his word, his bond, that he is not going to change the capital gains tax system or negative gearing in this country, we take it with a grain of salt. We will watch with interest because, already, we've seen the backgrounding and we've seen Treasury are doing more modelling. We legitimately ask: what's next? That is the fear for the Australian people.

We have a government that believes it is reasonable to tax unrealised capital gains. We have a government that believes it is reasonable to mislead the Australian people and promise one thing before an election and do another thing after. We like to say that the biggest mistake Bill Shorten made was that he was actually upfront and honest with the Australian people in 2019. They've clearly learned their lesson. But every Australian needs to know what's next. That's the scary part. We will see in the May budget whether the Prime Minister's word is his bond, whether he's not going to change capital gains tax and whether he's not going to change negative gearing, as he promised every Australian at the election in 2025 that he would not. If he breaks that promise, what's next? Is it your house? We just don't know. I guess we'll find out soon.

Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Firstly, I want to thank the members who've contributed to this debate about the future of our superannuation system. In particular, I want to thank the Assistant Treasurer, who's here with us today, and other members of the government's economic team. I want to thank colleagues from across the parliament, but particularly colleagues in the Albanese government, for making the case here. I also want to thank people from right across the superannuation industry and the wider community who have supported, contributed to and fed back on these important reforms over a number of years now.

These bills—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—reform our superannuation system to make it fairer from top to bottom. They are all about helping workers earn more, keep more of what they earn and retire with more as well, while also strengthening Australia's world-class superannuation system. They do this by boosting tax concessions for low-income workers. From July next year, the maximum LISTO payment will increase by $310 to $810 and the eligibility threshold will increase from 37,000 to $45,000. This will ensure 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.

More than a million low-income workers will benefit from these reforms, including around 750,000 women and around 550,000 young people under the age of 30. At the same time, these bills reduce the tax concessions available to individuals with total super balances above $3 million. This 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, and the concessional tax rate applying to future earnings on balances above $10 million will be 40 per cent. It means that there is still concessional tax treatment in superannuation but in a more sustainable way for people with the biggest balances.

Both the $3 million and the $10 million thresholds will be indexed. Reducing the tax concessions for those with large balances will make the system more sustainable, raising a bit over $2 billion in the first full year. This measure will affect less than half a per cent of all Australians. Together, these two changes will maintain concessional tax treatment, as I said, for super across the board. They will make the system more sustainable by better targeting those concessions for the biggest balances to help fund more super for people with the smallest balances.

The Australian Labor Party built our superannuation system, and we're really proud of that fact. As a government, we take seriously our responsibility as custodians of this system. We're focused on making the system stronger, fairer and more sustainable. That's why we legislated the objective of super. It's why we've raised the super guarantee to 12 per cent. It's why we've legislated payday super and why we're paying super on government paid parental leave. And it's why we've strengthened financial reporting requirements, expanded the performance test, announced mandatory service standards and set out best practice principles for retirement products. I want to acknowledge the work of Minister Mulino and, before him, Minister Jones.

There are always those who look to stand against important reforms like these, and there are some who have tried to argue against this policy over the years. They've looked for any reason to protect the tax breaks for those with tens of millions of dollars in super. The government have listened to stakeholders and made practical changes to the model in response to feedback over a long period of time, and we've strengthened and broadened these reforms to support low-income workers as well. But we've always maintained the objective of this policy: making the super system stronger and fairer.

Unfortunately, the coalition seems determined to vote against a stronger and fairer super system. They're determined to vote against more super for Australians on the lowest incomes, if you can believe it. They're determined to vote to keep bigger tax breaks for those who already have tens of millions of dollars in their super accounts. It's disappointing, but it's not especially surprising. We know that they have always opposed compulsory superannuation and they have always sought to undermine it. Their new shadow treasurer is on the record calling for compulsory superannuation to be dismantled. But it's not too late for the coalition to do the right thing for Australians and for the superannuation system that helps fund their retirements. We call on the whole parliament to pass these reforms to back that stronger and fairer super system.

Our superannuation system is the envy of the world. It began with workers and unions organising to support a better standard of living in retirement. It became a universal system in 1992, under the Keating government, with work done under the Hawke government as well by Treasurer Keating. The passage of this bill through the parliament will be a really important next step in the evolution of our superannuation system—a step towards a stronger system, a step towards a fairer system and a step towards a more secure retirement for millions of working Australians today and into the future. That's why I commend this bill to the House.

Marion Scrymgour (Lingiari, Australian Labor Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Goldstein has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the amendment be agreed to.

Question negatived.

The question now is that this bill be now read a second time. There being more than one voice calling for a division, in accordance with standing order 133 the division was deferred until the first opportunity of the next sitting day.

Debate adjourned.