Tuesday, 25 August 2020
Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019; In Committee
The government will be opposing this amendment that removes the $450 rule. Senator Waters is right; the $450 rule has been included in the superannuation system since compulsory superannuation began in 1992. I agree that looking at the $450 threshold rule does merit some consideration; however, now is not the time.
When it was first established it was established for two reasons: one was because there was a feeling that those who earned below the tax free threshold should not necessarily have to participate in this compulsory superannuation scheme and the other was that it was an administrative burden for businesses. Those issues have changed, but there are still many issues to consider around moving that threshold. There are implications for small businesses. Without the implementation of a policy to ensure that members are only defaulted once into superannuation products, removing the threshold may in fact result in more duplicate and low-balance accounts. The government has agreed to implement the recommendations of the financial services royal commission in that a person should only have one default superannuation account.
The TEMPORARY CHAIR: Thank you, Minister. I will just try and go back to Senator Waters, if she can hear us.