Senate debates

Wednesday, 1 March 2006

Questions without Notice

Superannuation Guarantee

2:34 pm

Photo of George CampbellGeorge Campbell (NSW, Australian Labor Party) Share this | | Hansard source

My question is to Senator Minchin, representing the Treasurer. I refer the minister to the Treasurer’s announcement of an inquiry into international tax benchmarks and to public comments by Mr Dick Warburton, the co-head of that inquiry. Is the minister aware that Mr Warburton has claimed that the nine per cent superannuation guarantee would be reviewed as part of the inquiry? Can the minister now rule out any reduction in the nine per cent superannuation guarantee, something that underpins contributions to the retirement income savings of more than nine million working Australians?

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

Yes, I can categorically rule out any suggestion that there would be any question about the nine per cent employer guarantee in respect of superannuation. I did note Mr Warburton’s comments. They were rather surprising, I would have to say. In fairness to Mr Warburton, they do reflect the fact that employers who pay this regard it as a quasi-tax.

Photo of Chris EvansChris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | | Hansard source

You opposed it for years.

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

I have been honest in saying, as Senator Evans says, that when we were in opposition we did argue against this particular levy on employers. That is a matter of public record.

Opposition Senators:

Opposition senators interjecting

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

If those opposite would listen to this, they may be interested to hear me place on the record the fact that our government has conceded that it is one of the few good things that the Labor Party did in government—there are very few. On reflection, it must be said, quite openly and honestly, that the introduction of the superannuation guarantee has been a net plus for Australia.

Photo of Nick SherryNick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | | Hansard source

And you opposed it.

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

Yes, we did oppose it. I have said that, Senator Sherry, just like you oppose a lot of the good things that we do; you oppose all the good things that we do. We have given the Labor Party credit where it is due. Now, in the spirit of generosity, we are giving some credit where it is due. The nine per cent levy has been a net plus for Australia. It reflects the fact that Australians are reluctant to voluntarily provide for their own superannuation without massive incentives or, indeed, by employer provision. But we do not regard it as a tax or within the framework of the very significant and important review of international taxation which the Treasurer has announced. That is not part of the terms of reference of that review. The review is to benchmark Australian taxation structures and levels against our international competitors to see how we compare, to see where we do better than others, and indeed to see where there may be room for improvement in the structure, operation and levels of Australian taxation. But I can assure Senator George Campbell that the nine per cent guarantee is not part of this review.

Photo of George CampbellGeorge Campbell (NSW, Australian Labor Party) Share this | | Hansard source

Mr President, I ask a supplementary question. I thank the minister for that response to the question. I hope he sends a copy of the transcript to Mr Warburton. Does the minister still stand by his public comments of 22 January, when he said, ‘I want to say to you that there is a very good case for abolishing the current 15 per cent tax on superannuation contributions,’ which would lift private savings for retirement in Australia? Or has he been convinced by the commentary of his own colleague the then Assistant Treasurer, Mr Brough, who has attacked calls for a reduction in the 15 per cent contributions tax as ‘a tax cut for the rich’ and ‘unaffordable’?

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

I am always interested in abolishing Labor taxes whenever we can. It is a fact that the Keating Labor government introduced this 15 per cent contributions tax. But my comments were in the frame of the current budget considerations, our concern to ensure that any proposed reductions in income tax do not contribute to heating up the economy and putting pressure on interest rates, and the need to run relatively large surpluses at this time. It is my view that, in the longer term agenda for this country, we need to consider the question of national savings. Our government is contributing to national savings in a way that was never contemplated or possible under the Labor Party and, therefore, the general question of how we tax superannuation is important. I note for the sake of Senator George Campbell that that is within the terms of reference of the Warburton inquiry.