Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Link to this | Hansard source

My question is to Senator Coonan, Minister representing the Minister for Revenue and Assistant Treasurer. Will the minister inform the Senate how the government is improving the retirement income system for the benefit of all Australians?

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

I thank Senator Fierravanti-Wells for the question and for her longstanding interest in boosting the retirement incomes of Australians. Senators will of course be aware that in last year’s budget the government announced the most far-reaching and visionary reforms to superannuation in Australia’s history. The package includes changes to superannuation taxation, the age pension assets test, and superannuation contribution and payment rules. Legislation has now been introduced to give effect to the changes. Only yesterday, a Senate committee report on the changes unanimously recommended that the Senate pass the government’s simplified superannuation bills.

The reforms have also received strong community support. Money magazine’s Paul Clitheroe called the changes to simplify super ‘extraordinary’. He said, ‘As a result of the package, superannuation will move into the mainstream of our day-to-day conversation.’ Even former ALP minister Ms Susan Ryan has labelled the Treasurer, Peter Costello, a ‘superhero’ for his bold and effective plan to simplify super and reduce taxes. As part of the package, there will be no tax on benefits paid out of a taxed super fund for people who are aged 60 and over, no tax on lump sums and no tax on pensions. Tax arrangements for super will become less complex, making super the preferred savings vehicle for Australians. Reasonable benefit limits will be abolished, as will age based contributions. We will extend the incredibly successful super co-contribution scheme to the self-employed and allow them to claim a 100 per cent deduction for contributions. There are transitional measures in place to allow for a smooth shift to the new arrangements.

Put simply, these historic reforms will boost the retirement incomes of Australians considerably. After 40 years of employer contributions alone, an average worker earning $1,000 per week is projected to increase their retirement income by 17 per cent. The reforms will also boost incentives to work and to save. The legislative package rewrites the super laws to present a clearer picture of the tax of super across the life of superannuation investment. The number of pages of super law will be cut by over one-third. It is a pretty impressive package. In the words of AMP: ‘These initiatives will help ensure that Australia maintains one of the most progressive and well-managed retirement income systems in the world.’

Unfortunately, when you look at Labor’s policy vacuum on superannuation, it has consisted really, I suppose, of opposition for opposition’s sake. You could not really put it any higher than that. They have no plan for retirement incomes, no plan for the financial security of Australian workers. Over the years, of course, we have seen them bluster about the introduction of the co-contribution and oppose the cutting of the super surcharge. They had to be dragged kicking and screaming into supporting these historic reforms. Susan Ryan has called Labor’s super policy ‘shabby’. Mr Weaven has said that the Liberal Party is now the ‘official party for superannuation’. Senators on this side of the chamber will wear this endorsement of Liberal stalwarts with a great deal of pride.