Tuesday, 27 February 2007
Tax Laws Amendment (Simplified Superannuation) Bill 2006; Superannuation (Excess Concessional Contributions Tax) Bill 2006; Superannuation (Excess Non-Concessional Contributions Tax) Bill 2006; Superannuation (Excess Untaxed Roll-over Amounts Tax) Bill 2006; Superannuation (Departing Australia Superannuation Payments Tax) Bill 2006; Superannuation (Self Managed Superannuation Funds) Supervisory Levy Amendment Bill 2006; Superannuation Legislation Amendment (Simplification) Bill 2007; Income Tax Amendment Bill 2007; Income Tax (Former Complying Superannuation Funds) Amendment Bill 2007; Income Tax (Former Non-Resident Superannuation Funds) Amendment Bill 2007; Income Tax Rates Amendment (Superannuation) Bill 2007
I am pleased to follow Senator Chapman in endorsing the very good policy contained in the Tax Laws Amendment (Simplified Superannuation) Bill 2006, because it is policy that is in the interests of all Australians. It is in the long-term interests of Australia and it has been quickly recognised as such by the men and women of Australia, the financial professionals and even the union dominated industry superannuation funds. The only people who have had to be dragged kicking and screaming to support this legislation are the economic spendthrifts on the other side of the chamber: the Labor Party. It took them months to decide whether they could support a fairer and simpler superannuation system for all Australians. Just as with the tax cuts announced in last year’s budget, it took them months to make a decision about whether or not they were going to support it. They have been dragged kicking and screaming from their 1950s central planning economic theory into the modern economic age that has delivered prosperity and success for so many Australians.
Listening to the previous speeches, I was surprised how far senators opposite have had to be dragged into the future. They are still backslapping about the victories of yesteryear. Their speeches were not about how good this policy is and how positive it is for Australians going forward; they were all about how Labor introduced superannuation. We have acknowledged that, but they are still backslapping and crowing about these things. As much as they crow and congratulate each other, we need to be reminded of the real achievements of Labor when they were in office. The facts are that unemployment averaged 8.5 per cent under the Labor Party, youth unemployment peaked at 34 per cent in this country, mortgage interest rates were nearly 17 per cent, and the average interest rate was 12.75 per cent throughout Labor’s period of administration. Industrial disputation under a Labor government averaged 193 working days per 1,000 employees.
Contrast that with the performance of this government. Unemployment is at 4.8 per cent, the lowest level in 30 years. Productivity is higher. Interest rates have averaged 7.15 per cent. Industrial disputes, I read the other day, are at the lowest level they have ever been. Real wages growth has peaked in excess of 16 per cent. Yet, despite the evidence that the coalition’s economic policies have delivered the best economic environment this country has had in 60 years, the Labor Party are still slapping each other on the back for the only sensible decision they made more than a decade ago. The Labor Party are living in the past. They are yesterday’s party. They have no vision for the future of this country save for a resurrected union movement seeking to take control of the freedom this government has given the workers.
This government, on the other hand, does have a vision for the future of Australia. With so many achievements on behalf of the good citizens, we could probably be excused for resting on our laurels. As comfortable as that might be, we are not prepared to do it. We are still producing policies and legislation that will deliver jobs, prosperity and continuing hope for all Australians. The Labor Party have had 11 years to come up with a coherent policy on anything, and we are still waiting. Instead, they decide to promote the architect of their Medicare Gold package to the leadership. I wonder if that policy gem is going to resurrect itself at the next election.
It is with confidence that on behalf of the people of Australia I speak in support of this bill. As a former financial adviser, I know about the complexities previously associated with superannuation. Making savings for retirement simpler and more tax efficient is a huge step towards the future prosperity of this country. Removing age based concessional contribution limits and installing an annual cap of $50,000 will make it easier for Australians to plan for their retirement.
Of course, any changes introduced in this environment, however positive over the long term, do have an immediate impact on a minority of Australians. This government has recognised the impact this has on those people who are planning for their retirement in the more immediate future. In an attempt to alleviate this, we have introduced a five-year transitional cap. This cap will help those people aged 50 or more to make a $100,000 annual contribution to superannuation for five years, covering financial years 2007-08 through to 2011-12. There are also opportunities for people to contribute a further $150,000 per annum in non-concessional contributions with transitional arrangements applied to offset any inconvenience or disadvantage to those already approaching retirement age. I have had first-hand input, as Senator Chapman alluded to in his speech, in meeting people and effecting change so that people who have gone down an extensive path of preparing for their retirement are not disadvantaged. I am pleased to say that this has been very well received.
These provisions alone are enough to warrant support of this bill; but, as the ads say, wait, there’s more! This bill provides greater incentives to invest in superannuation by simplifying the arrangements for the taxation of benefits. Most significant amongst these is the removal of tax on superannuation benefits paid to people aged 60 and over when paid from what is declared a taxed superannuation fund. This initiative has a positive and direct impact on around 90 per cent of Australian employees—further proof that this government is the best friend the workers of Australia have ever had.
This also provides an incentive for people to remain in the workforce, which helps our economy in a number of ways. Principal amongst them is that we are going to be retaining a lot of skills and experience to build a stronger and more prosperous Australia going forward. Part of a stronger and more prosperous Australia is of course a strong economy. To maintain a strong economy and to ensure that people cannot rort the system, we need to ensure there is accountability and efficient administration. This bill does exactly that, because it requires the provision of a tax file number before a person can contribute to a superannuation fund. This protects the integrity of the generous taxation concessions contained within the bill.
Not only is this government the best friend that the workers of Australia have ever had; it is also a very good friend of the self-employed. The self-employed—those entrepreneurs and free spirits who have clearly rejected the tired old Labor dogma—can now claim a full tax deduction for superannuation contributions, within the predetermined limits, until the age of 75. If ever there was a positive step forward to enable people to become self-reliant, to pursue their own business and to provide employment for others in this country to ensure sustained economic growth then this is a policy that will do exactly that. I commend this bill to the Senate. It defines a very clear path. It defines a path of future prosperity, a path that will build a stronger Australia, a stronger economy and an economy that only a coalition government is fit and equipped to manage.