Monday, 6 March 2023
Questions without Notice
BIRMINGHAM (—) (): My question is to the Minister representing the Treasurer: will superannuation account holders affected by Labor's new doubling of the super tax be able to withdraw funds that are above the new threshold without penalty?
I welcome the opportunity to talk about Labor's changes to superannuation that we announced last week, making a modest adjustment to superannuation tax breaks for earnings on balances above $3 million, which will not come into effect until after the next election, meaning that for the 0.5 per cent of people who are in the fortunate position of having super balances over $3 million the changes will not come into effect for another three years—depending, obviously, what stage they're up to, whether they are below the age where you can withdraw super; that will depend. But there are three years before this policy comes into effect. If people want to make arrangements of their affairs before that time comes into effect, depending on where they're at in the super cycle, then that's a decision that individual superannuation account holders will make.
I ask the minister, given her answer, will Australians who have not reached preservation age by the time this policy takes effect be able to withdraw excess funds from their superannuation accounts that are above Labor's new threshold without penalty?
Opposition senators interjecting—
Sorry; if you did, I didn't hear 'prior to preservation age'. There are rules about withdrawing super prior to preservation age, as Senator Birmingham well knows. But this is a very modest change to the superannuation system: 0.5 per cent of people will be affected. They have, on average, account balances in the order of $5.8 million, which is good for them, obviously. But we are in charge of having to repair a budget that is in structural deficit of $50 billion a year. That is what you left us. We are making very modest changes to begin the hard work of budget repair. This is a very modest change. It affects a tiny number of people compared to the changes that you brought in in 2016. (Time expired)
The rules around preservation age the minister refers to limit the ability of Australians to access their own funds. How does the minister justify legally preventing Australians from changing their investment profile when the government is changing the taxes on those investments despite having made promises not to do so immediately before the last election?
(—) (): As I said, it's a very small amount of Australians who are affected by this change. It's a very modest change. They are still concessional arrangements. Let's not forget this: they are still concessional arrangements. Let's remember that the average super balance is in the order of $150,000—that's the average super balance. For those who are fortunate to have super balances over and above that, there are still concessional tax arrangements available even with this change. We are making this very modest change to superannuation to help repair the budget that is in structural deficit because of the mess that you left it in. You didn't fund things properly, you didn't fund things in an ongoing basis and you ignored pressures coming to the budget hoping that someone else would fix it, and that is the work that we are currently doing with this modest change. (Time expired)