Senate debates

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

Second Reading

6:01 pm

Photo of Guy BarnettGuy Barnett (Tasmania, Liberal Party) Share this | Hansard source

It is a great honour and a privilege to support the remarks of my colleagues Senators Bernardi and Chapman, who have spoken in support of the Tax Laws Amendment (Simplified Superannuation) Bill 2006 before the Senate. In essence, the bill contains the most significant reforms to the taxation of superannuation in Australia’s history. That is the short of it and the long of it. It will remove the complexity that is currently in the system. It will sweep away the current raft of complex tax arrangements that apply to superannuation. It will support a number of the government’s key principles and messages. It will improve the incentives to save—and this government believes that is important. It will increase retirement incomes. We have an ageing population in this country, in every state and territory. Increased retirement incomes can only be good for those over 65. Nearly 13 per cent of the population is in that category and that percentage is growing by the day. The principles of improving incentives to save and increasing retirement incomes will be of tremendous benefit for that category of Australians.

This legislation will also strengthen incentives for older Australians to actually stay in the workforce, and I think that is a very good thing, particularly in light of the ageing population and the scarcity of workers for the jobs that need to be done in the years and decades ahead. It is a substantial investment by this government in the standard of living of Australians in retirement and, indeed, in the country’s future economic prosperity.

The legislation supports the thrust of good economic management, which has been the key hallmark of the Howard and Costello government over the last 10 years. We now have record low unemployment. We have record low interest rates. We have an increased number of jobs over the last 10 years, specifically since the tough decision to bring on the Work Choices reforms in March last year. Over 240,000 new jobs have been created in Australia. Not only has there been an increased number of jobs; there has been an increase in real wages of over 16 per cent, including in my home state of Tasmania. That is a tremendous result, particularly when you compare that to the 13-odd years of Labor government when there was actually a decrease of 1.2 per cent in real wages. How sad for the working men and women of Australia to have been subjected to that type of mismanagement of the economy.

Under the John Howard and Peter Costello government this is what has happened: there has been a real increase in wages, there has been an increased number of jobs, specifically since Work Choices, and there has been the lowest unemployment recorded for 30-odd years. This is part of the tapestry of good economic management that has been undertaken by the Howard government and will continue to be undertaken as we pursue this policy of continual improvement at every level. In terms of the taxation of superannuation, yes, this is a first in our history. I commend these bills to the Senate.

The Simplified Superannuation reforms are a broad-ranging suite of reforms to superannuation taxation, the age pension assets test, superannuation contribution rules and superannuation payment rules. The centrepiece of the reforms is making superannuation benefits tax free, if paid from a taxed fund, to Australians aged 60 or over. I want to outline some of the other key aspects of the reforms. There will be significantly lower tax paid on superannuation from an untaxed fund for people aged 60 and over. Age based limits will be replaced with streamlined contribution rules. Contribution incentives will be improved for the self-employed—and this is a very important category of the Australian community. Obviously, these are the small-business and microbusiness operators. The self-employed is a very large category of operators across this country. Livelihoods are on the line for the self-employed. They probably have mortgages on their homes and they have to make ends meet everyday. I commend the self-employed and thank them for their courageous approach to dealing with everyday life and looking after their families and their children.

To improve the contribution incentives for those people, we will be extending to the self-employed the government’s highly successful co-contribution scheme. Also, the reforms will halve the assets test taper rate and rewrite the superannuation taxation law to present a clearer picture of superannuation taxation and reduce the compliance costs and regulatory burden faced by business and other taxpayers. I am talking about small businesses in particular. Yes, it is important for large and medium-sized businesses, but we have 1.2 million small businesses in this country and about 600,000 of them are family based businesses. Wherever possible, we should use every ounce of our energy and every fibre of our bodies to reduce the red tape, the paperwork burden and the complexity so that those people can get on and do what they do best—that is, run their businesses. This is why I am so disappointed with Labor’s response to the government’s initiatives that are before us.


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