Monday, 24 June 2013
Superannuation Laws Amendment (MySuper Capital Gains Tax Relief and Other Measures) Bill 2013; Second Reading
I table a revised explanatory memorandum relating to the bill and I move:
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
The speech read as follows—
This bill amends various taxation laws to implement a range of improvements to Australia's tax laws.
Schedule 1 amends the Income Tax Assessment Act 1997 to ensure default members of superannuation funds are not adversely affected if their account balances are compulsorily transferred to a MySuper product in another fund as a result of the MySuper reforms.
Where superannuation funds do not offer a MySuper product, the MySuper provisions will require them to transfer their default members' account benefits to a fund offering a MySuper product by 1 July 2017. This measure allows the superannuation fund to transfer any tax losses and defer an income tax liability for assets transferred to the other entity.
Schedule 2 amends the Defence Force Retirement and Death Benefits Act 1973 to make consequential changes to enable the Commonwealth Superannuation Corporation—the trustee of the Defence Force Retirement and Death Benefits scheme—to release a lump sum for the purposes of meeting a debt account discharge liability; and to reduce the benefit as a consequence of that payment.
These changes are part of the sustaining the superannuation contribution concession, which effectively reduces the superannuation tax concession on contributions received by individuals whose income exceeds $300,000 from 30 per cent to 15 per cent. This ensures the tax concession received by higher income earners is more closely aligned with the concession received by average income earners. This will improve the fairness of the taxation of our marvellous superannuation system.
These changes to the Defence Force Retirement and Death Benefits scheme will ensure beneficiaries of this scheme are not disadvantaged in comparison to members of other Commonwealth defined benefit schemes and can have their benefits adjusted to meet their liability under the sustaining the superannuation contribution concession measure.
This Bill also amends workplace relations laws to implement changes to default superannuation arrangements for employees to whom a modern award applies.
Schedule 3 amends the Fair Work Amendment Act 2012 to allow an employer to make contributions for default fund employees to whom a modern award applies to a superannuation fund in respect of an employer MySuper product (a tailored or corporate MySuper product), subject to the product being approved by the Fair Work Commission.
The changes establish a two-stage approval process under which an Expert Panel of the Fair Work Commission will assess employer MySuper products to determine whether they are in the best interests of the relevant default fund employees. This approval process, including the legislated criteria for both stages of assessment, is largely consistent with the process for generic MySuper products that was established in the Fair Work Amendment Act.
The amendments will also increase the maximum number of funds that can generally be specified in a modern award from 10 to 15. This addresses concerns that employers covered by multiple modern awards could be prevented from using employer-specific subplans of generic superannuation products because the existing limit of 10 funds may see some high performing funds not being included in particular modern awards where there are more than 10 funds with highly suitable generic superannuation products. The proposed amendments ensure that high performing funds have reasonable prospects of being specified in modern awards for which the Fair Work Commission assesses them as highly suitable for employees covered by the award.
The measures will also provide certainty that stakeholders have sought regarding when arrangements may change by not requiring any changes to existing arrangements before at least 1 January 2015.
These amendments have been developed following extensive consultation with employers, unions and superannuation industry stakeholders following the passage of the Fair Work Amendment Act last year.
This measure fulfils the commitment made by the Government to introduce any required amendments to ensure appropriate arrangements are in place for corporate funds. It will ensure that employees whose default superannuation contributions are being directed to high performing employer MySuper products are not made worse off from the new default superannuation system and prevent unnecessary disruption for employers with employer MySuper products.
Full details of the measure are contained in the Revised Explanatory Memorandum.
Ordered that the resumption of the debate be made an order of the day for a later hour.