Nick McKim (Tasmania, Australian Greens) Share this | Hansard source

The tax system in Australia is completely and utterly broken. For how abjectly broken our tax system is, exhibit A is the fact that the worst way to get ahead in our country now is to go to work every day to earn a living, and the best way to get ahead is to be so wealthy that you've accumulated a mountain of assets and you simply live off the proceeds of buying and selling those assets without lifting a finger to do productive work in this country. If you are a nurse, a cleaner, a bartender or a plumber, and you go to work every day, you are paying double the tax of someone who makes the same amount of money buying and selling properties. Let that sink in. That is how completely and utterly broken our tax system is. This is why economic inequality and wealth inequality are spiralling in Australia, because the super wealthy are getting even more rich while working Australians are working harder and harder and getting left further and further behind, because wages are not keeping up with inflation let alone the spiralling cost of mortgages, rents and real property in this country.

This legislation, 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, unfortunately does not change this equation. As an example, a superannuation account with $5 million in it—by the way, no working Australian who hasn't been able to rely on inherited wealth or significant capital investment, no working Australian who is simply going to work and putting in their usual superannuation contribution out of their wages, can ever hope to have a superannuation account worth $5 million. But as an example, you've got five million bucks in your superannuation account and you're an extremely wealthy Australian. It will still, even after this legislation passes, only face a tax rate of 14 per cent on capital gains, while someone who is a bartender or nurse working part-time, earning $20,000, will face a tax rate of 16c for every extra dollar earned over 20,000 bucks. Let that sink in: even after this legislation, someone with $5 million in their superannuation account will pay less tax than a nurse or a cleaner who works part-time and earns $20,000 a year. How cooked is our tax system? You could stick a fork in it and it would come out dry. It is completely and utterly cooked.

Under the changes in this tax bill, those holding the 10 biggest superannuation accounts in the country, which average $423 million, will still face a lower rate of tax, when they sell shares or investment properties, than every full-time worker in this country, including those on the minimum wage. How cooked is our tax system that the 10 Australians with the biggest superannuation accounts, averaging $423 million, will pay a lower rate of tax than the nearly three million Australians who are going to work and earning the minimum wage.

I might add, as an aside: that there would be even one superannuation account with a balance of $423 million shows how far away from its original intended purpose our superannuation system has drifted over the decades. It was brought in by then treasurer Paul Keating as a mechanism to provide for a dignified retirement for working Australians, and that is a good thing. That is an absolutely desirable objective, and, by and large, the original design of the superannuation system actually delivered on that aim. What we have seen over the ensuing decades, though—mostly, I might add, under coalition governments—is that original aim, that original system designed to provide for a dignified retirement for working Australians, change completely into a wealth-management and estate-planning vehicle. That's why we've got people with hundreds of millions of dollars in their superannuation accounts. No-one needs hundreds of millions of dollars to have a dignified retirement in Australia. The reason we've got superannuation scheme accounts worth hundreds of millions of dollars is that people are using the obscene tax breaks to manage their wealth and plan their estate. No wonder there is so much frustration amongst Australian workers, who are working harder and harder and falling further and further behind. Some people are working two, three or even four jobs, watching their wages decline in real terms and watching the great Australian dream of owning their own home disappear off into the never-never.

What the examples I've been through today show clearly is that this bill does not structurally solve any of the great wealth inequality and tax inequality issues facing Australia today. It is tinkering at the edges in classic Labor fashion. But it does tax multimillionaires just a tiny bit more, and that is a good thing. At the moment the superwealthy Australians using their superannuation as a sophisticated tax shelter are paying only 10 per cent tax on capital gains. This bill increases that, which is one of the reasons the Greens will support it. The bill marginally increases the tax that some of the wealthiest Australians will pay. Critically, it will deliver more retirement income to low-income earners, through the low-income superannuation tax offset, or LISTO. Importantly, two-thirds of the people that will benefit from the LISTO are women, who already face significant disparity in their earnings and their retirement savings, compared to men.

So the Greens will support this bill unamended, but I want to be very clear. We are supporting this bill as a down payment on broad, deep, ambitious and progressive tax reform, and we expect to see that broad, deep, ambitious and progressive tax reform in Labor's upcoming budget. There is a massive Labor majority, a stonking majority, in the House of Representatives, and Labor plus the Greens is enough to deliver any legislation through the Senate. The opposition is an absolute rabble, and the numbers are there in both houses of this current parliament for broad, deep, ambitious and progressive tax reform as long as the Labor Party is prepared to show courage and ambition. The only obstacle to genuinely deep, progressive and ambitious tax reform in the upcoming budget is Labor's political courage.

On behalf of the millions upon millions of Australians who are being done over by our current tax system, which is designed to favour the one per cent, the super-rich, the superwealthy in this country, I say this and the Greens say this. We cannot afford to waste three more years tinkering at the margins with bills like this one. If and when this bill passes, superannuation will still be used by the megawealthy as a tax shelter, a tax dodge, and for estate planning. However, this bill does allow and provide for some small, stuttering steps in the right direction in terms of increasing the taxation rates on the superwealthy and super-large superannuation accounts, and it does, critically, deliver more retirement to low-income earners through the LISTO.

But I want to leave senators with this thought. Our tax system—capital gains tax, negative gearing and the way that taxes operate in relation to trusts, superannuation and share dividends compared to the way we heavily tax income from work—is turbocharging intergenerational inequality. Young people are getting absolutely done over by our tax system. They are loaded up with HECS debt, the dream of owning a home is disappearing off into the never-never and they are watching superwealthy people who have already had a good crack at it and have accumulated mountains of assets get taxed far too lightly, while they, young people, who are massively overrepresented in the workforce, are paying more and more tax, working harder and harder and falling farther and farther behind.

Just to take the capital gains tax discount, only four per cent of the benefit of the capital gains tax discount goes to people under 35. It is an intergenerational disgrace. It is diabolical for young people. Along with so many other elements in the tax system, it's biased towards older Australians and wealthy Australians and biased against younger Australians, poorer Australians and working Australians.

This bill won't meaningfully correct the trajectory we are on, but it is a small step in the right direction. The genuine opportunity for the Australian Labor Party is the upcoming budget. The Greens have been very clear that we expect to see delivered in this budget strong, deep, progressive, meaningful tax reform that benefits young people, that benefits working Australians and that makes the one per cent, the superwealthy, pay their fair share of tax.