David Pocock (ACT, Independent) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 and add my support to the bill. I do want to start, though, by raising my concern that senators have been prevented from having an inquiry into this bill. There's a worrying trend in this place whereby legislation that is perhaps seen as controversial is not referred to an inquiry. I don't understand why senators on my left feel the need to exempt bills like this from inquiry and not back themselves to make their case through the inquiry process—to actually grapple with the complexity and the varying views in the community and amongst experts—and ultimately land with a bill that they think is the right direction to be heading in.

There's a positive story to tell with this bill, and, again, I think that would have come out in the Senate committee process. But, because of the lack of that process, we have missed out on being able to genuinely scrutinise the finer details of this bill. There have been concerns raised about some of the transitional provisions in the bill, and I don't think it's unwarranted for the Senate to examine those concerns and either dispute them or try and fix them if that's appropriate. We are the house of review, and our committees play an important role not just in that review function but in opening up our democracy to the Australian people. We see that in Senate committees, where people have the opportunity to actually come before the Senate and talk about their area of expertise or simply give us their lived experience—their view on something the Senate is dealing with.

Before I get to the bill, I also want to put on record that it's incredibly disappointing that this bill is being guillotined. The government has spent weeks throwing sand in the gears with pointless amendments, reading out full amendments and motions, going through government business time, slowing the Senate down and preventing us from actually debating legislation. When you do actually bring a bill, which I think is very important, you then do a deal with the Greens to guillotine it, despite having the support for this bill to pass. I think this is a real low point in terms of accountability—to have a bill that didn't go to inquiry then get guillotined—and I think the Australian people deserve better from our Senate.

To the substantive parts of the bill, I think most Australians would agree that, when you break it down and look at the figures, our superannuation concessions are, undoubtedly, very generous. As I heard the Assistant Treasurer, Dr Mulino, say in the House:

… super tax concessions cost the budget more than $60 billion per year and will exceed the cost of the age pension in the 2040s.

I don't see any issue in helping people build their super balances. That's great public policy. We want less reliance on the age pension—which, if you speak to anyone on the age pension, is incredibly hard to get by on. We want fewer people struggling to keep their heads above water in their senior years. But the reality is that the distribution of those concessions is not even. As our colleague Senator McKim has noted publicly, the 10 richest super accounts in Australia hold an average of $423 million, more money than the vast majority of Australians would ever see in their lifetimes.

The simple reality is that super tax concessions are not helping people to build a nest egg for their retirement. They are not even really helping to encourage additional savings, according to the Retirement income review. At present, they're largely offering a tax break for people seeking to amass incredible wealth. According to an analysis by the Australia Institute, the richest 10 per cent receive $22 billion in tax breaks. If we can be more prudent with these concessions so that we can achieve more for retirees, then I think we should be doing that.

Since this bill was first introduced in the last parliament, there have been significant changes. Really, I think there are some good changes, and I really commend the Treasurer, the Assistant Treasurer and their teams for the work that they've done on this bill. The first is the indexing of the high-balance threshold. This was not a fringe concern. It was painted by some as a fringe concern, but it was a very real concern raised—that, if we don't get the settings right now, we will entrench yet another system that will fall unequally on young workers. Today, $3 million is a lot of money, but it won't be in the decades to come. To quote Sally McManus from the ACTU:

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

meaning, of course, those everyday Australians on ordinary wages who would have fallen victim to a $3 million threshold had that not been indexed.

There's also the change to remove the policy of taxing unrealised capital gains, considering the impacts that would have had on small businesses, farmers and people holding volatile assets in areas of public interest. On the latter, I was particularly concerned about the impact this could have had on R&D and things like medical research at a time where public investment in R&D is at a record low. Early-stage drug discovery and medical research are inherently volatile, and changes that disincentivise interest and investment in this line of work are something we really need to take seriously. As the former secretary of the ACTU Bill Kelty said recently:

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.

I also want to commend the government and celebrate the changes that are being made to the low-income super tax offset, the LISTO. The LISTO is a fairness measure that is supposed to ensure that low-income Australians aren't paying more tax on their super than their take-home pay. But, since it was first introduced, tax bracket and super guarantee rate changes mean that it's now out of date, and more than a million of the nation's lowest income earners are paying more super tax than they should. In the ACT, that's 17,000 Canberrans, around 60 per cent of whom are women. Fixing this is good policy, ensuring that people aren't paying more in super tax than they are in income tax. The government and this parliament have a clear role in building a tax system that helps everyone to thrive in our society and, in this case, to build some savings for retirement. Making sure that we're using and spending tax concessions prudently is part of that so that we can make investments where they're needed to help people maintain a basic standard of living when they're older.

On a final note, I wanted to talk about defined benefits. I represent many people here in the ACT, many Canberrans, who receive a defined benefit, and I want to acknowledge their concerns. The government says this policy will fairly apply to people on defined benefits, but I just don't believe that that case has been made. Again, in the absence of a Senate committee and or even a committee of the whole to ask these questions, I do have some concerns in this area.

People who receive a pension through a defined benefit scheme often pay the full marginal tax rate on that pension. It's essentially already treated as income. I'm concerned that there will be cases where people on defined benefits may pay a higher effective tax rate than anyone else in Australia—a higher effective tax rate than billionaires in Australia pay. There are clear differences between accumulation funds and defined benefit schemes that are relevant here—for example, the inability to split super with a spouse in the accumulation phase. As a constituent has advised me, with a defined benefit scheme, you can't roll funds back to an accumulation phase so they can fund entry into aged care. You can't draw down funds to pay for essential medical procedures. The most pressing issue is the uncertainty over the method that is going to be used to calculate the value of someone's super interest in a defined benefits scheme.

I recognise that this issue will be a disallowable instrument, and we can look at the issues associated with that method when it's tabled, but I want to make very clear that I really agree with what bill is doing, but I really regret that we haven't had the time to actually look into this in more detail to be able to assure people that the disallowable instrument will actually do what the government is telling us that it will do.

Clearly, with reform, we will never have the perfect result in everyone's eyes, but I think this is a genuine improvement for intergenerational equity and a step in making our tax system fairer. Again, maybe in contrast to what we've heard from coalition senators, I would urge the government to actually have more courage when it comes to tax reform. We are living in a country with a growing wealth inequality, a growing intergenerational inequality, and we must hold firm to the egalitarian ideal that, in Australia, you don't have to have wealthy parents to make your way in this great country. If we are committed to that, then we require tax reform and to look at housing and how we treat that more as a human right than an investment vehicle. How do we stop talking about housing as an asset class and start referring to it as being people's homes, and we want to ensure that everyone has a house to live in.

There is clearly much to do this area, including, of course, getting a fair return for our resources. Again, I find it outrageous that we live in a country that is one of the biggest fossil fuel exporters in the world, but, when it comes to gas, we're happy to give away so much of it for free and then turn around at budget time and say to older Australians and to Australians who desperately need support: 'I'm sorry. The budget is tight. We simply cannot afford to help you.' We need to reframe. These are Australia's resources. They belong to all of us, and, if we want to look at the Norwegian model, they actually belong to future generations of Australians. We could be saying: 'Yes, you can take our gas. You can export it, but you're going to pay us a 25 per cent export tax, and that's actually going to go into services for Australians, and we're potentially put some of that into our Future Fund for future generations.' That is, surely, the kind of thinking that we can and should have in this country.

I'm hearing from so many Canberrans and not just Canberrans but people across the country who are saying, 'We need a fairer deal on our natural resources; we need to be getting a cut; stop giving them away for free.' So, as part of the broader discussion on tax, I urge the government to have courage in this area. When it comes to a 25 per cent tax on gas exports, clearly, the Australian people want that and they want that soon.