Jane Hume (Victoria, Liberal Party, Shadow Minister for Employment and Industrial Relations) Share this | Link to this | Hansard source

Before I left the chamber, I was talking about some Labor luminaries named Bill Kelty, Paul Keating and Sally McManus, who had all said that the previous iteration of this legislation was so dire that they were recommending that the government withdraw it. Thank goodness the government heeded that message! But I was looking, just as I was leaving the chamber, at the name of this legislation—'building a stronger and fairer super system'. What a misnomer this is! Let's face it, because 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—is simply a tax. It's just more tax, and that seems to be the solution that Labor has to every single problem.

When the coalition was in government and we dealt with superannuation legislation, we tried to make the system fairer and stronger. We did things like getting rid of fees on low balances. We abolished fees for switching investments or for switching funds. We made sure that young people weren't being forced into taking life insurance that they didn't need, which simply subsidised those older cohorts that were drawing upon it. We made life insurance opt-in rather than opt-out for young people. We made sure that we got rid of multiple accounts. We introduced stapling so that your superannuation fund followed you from job to job rather than your employer simply opening up another account and another account and another account every time you started a new job, which then created two sets of fees and two set of insurances. We made sure that there was transparency in superannuation and that you could compare and contrast performance of different default funds—different MySuper funds—on the ATO website in a verifiable way so you were comparing apples with apples rather than apples with oranges. And, of course, we introduced the best-financial-interests duty to ensure that there wasn't some sort of mission creep for superannuation funds in deciding what was, in effect, best for their members and that any investment that they made was in the best financial interests of their members, with no other purpose.

As you can see, none of those reforms that were introduced by the coalition had anything to do with tax. They had everything to do with a stronger and fairer super system but nothing to do with imposing a new tax on superannuants. Yet that was the first thing that this Labor government did when it came to office. After promising that there would be no changes at all to superannuation, its first duty was to impose a new tax on super. Why is it doing that? Let's face it. The government is hunting for new pools of capital for one good reason: it has a spending problem. It needs to plug its own hole. Labor has failed to find savings in its own budget. It's failed to curtail that natural urge that Labor seems to have to keep spending more and more of other people's money. Because it's run out of ideas, it's now coming after your savings. It's coming after your superannuation to fill its budget hole.

This isn't just about numbers on a spreadsheet; there are real human consequences for this. There is a cloud of uncertainty, particularly around surviving spouses at their most vulnerable moment, because this legislation introduces the removal of the effective 'death tax exemption'. Tax has to be paid after somebody has died. There's also the introduction of the LISTO. The government says increasing the LISTO is a great thing, but the only reason the LISTO has to be increased is that when the government offered its paltry 70c a day tax break, as an election sweetener, it seemed to forget that meant our lowest and most vulnerable Australians would be paying more tax in superannuation than outside superannuation.

This is a terrible piece of legislation. It's one that should never have seen the light of day. We will continue to stand against these ideological experiments and protect the retirement security of every single Australian.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister to the Shadow Treasurer) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 and related bill.

At its core, this bill introduces Labor's division 296 superannuation tax, and, while the Albanese government has now modified its original proposal, that change demonstrates how flawed the original design was. Initially, Labor proposed taxing unrealised capital gains within superannuation. That would have broken a fundamental principle of the Australian tax system—which is that tax is paid when income is realised, when a gain is crystallised and when there is actual cash available to pay the liability. It was a structural shift that would have set a dangerous precedent across the entire tax base.

At the same time, the government proposed not indexing the $3 million threshold. In an inflationary environment, the effect of this would have been to quietly drag more Australians into the tax over time through bracket creep. These were critical and obvious flaws. But the policy backtrack we've witnessed in relation to this bill is not an acknowledgement by Labor of these flaws. It is the result of the sustained and justified external pressure placed on it by stakeholders. The reality is that the Albanese government only retreated on the taxation of unrealised gains and the indexation freeze following strong and ongoing scrutiny from the coalition, the superannuation sector, small-business owners and everyday Australians.

We highlighted that these were not minor tweaks. We highlighted that the original design to tax unrealised gains represented a fundamental break with longstanding principles of the Australian tax system. We highlighted, as I've already noted, that failing to index the threshold was a silent tax hike, especially given the inflationary pressures that flow from the Albanese government's mismanagement of the economy. An increasing number of Australians would have been captured over time, not because they were wealthier in real terms, but because these inflationary pressures would have eroded the value of the threshold. We highlighted the unique negative impact that that would have on future generations of hardworking Australians and not just on the very few wealthy Australians that they said it would impact.

It must be noted that ours were not the only dissenting voices when it came to these flawed policy proposals. Even individuals closely associated with the labour movement went on the record against the Albanese Labor government's tax plan. Former ACTU secretary Bill Kelty said:

… taxing unrealised capital gains is bad policy. It distorts the effective tax. Changes your income flows, and if it was on superannuation generally, there would be a revolution about it. It would destroy super.

If that wasn't bad enough for Jim Chalmers, former prime minister Paul Keating, an early and central figure in Australia's superannuation policy—it has to be said—came out against taxing unrealised gains, flagging concerns that workers would eventually be impacted by the changes. If Paul Keating and Bill Kelty weren't enough, in the same vein, the current ACTU secretary, Sally McManus, said:

I do think it's got to be indexed because you've got to make sure eventually people don't end up there.

How remarkable that a Labor Prime Minister in Anthony Albanese and a Labor Treasurer in the form of Jim Chalmers would find their tax plan, their clever tax thinking, attacked by former ACTU secretary Bill Kelty, former Labor prime minister Paul Keating and a current leading figure of the ACTU. Given this opposition, including from its own people, why did the Albanese government think these measures should become law? The answer is that, rather than considered policy based on sound principles, it has fundamentally always been part of a revenue grab by a government that cannot exercise discipline in its own spending.

Not simplification of the superannuation system, not improvement on current or future retirement outcomes for Australians, but quite the opposite—the intent was to fund higher government spending. Government spending has risen to around 26 per cent of GDP, well above long-run averages outside crisis periods. When spending grows faster than the economy, governments start looking for new tax bases, and, increasingly, Labor sees superannuation as one of them. That approach risks undermining confidence in the entire retirement system, because, once the principle is accepted that super balances can be taxed more heavily whenever fiscal pressure emerges, the stability of the whole system is weakened.

Today, it may apply above one threshold. Tomorrow, the threshold may change. Confidence in retirement savings depends on stability, predictability and transparency. Importantly, it also depends on trust. This Labor government has demonstrated that it can't be trusted with peoples' superannuation. It is damaged when governments like this one are not up-front with the Australian people and when the Australian people feel they cannot trust their government. Australians were not presented, at the time of the last federal election, with a policy to tax unrealised gains in superannuation, nor were they told that longstanding superannuation settings would be altered, nor were they warned that indexation would be part of the plan.

In my experience, that waning confidence is particularly strong in regional Western Australia, where I so frequently travel. Many small business owners and family enterprises hold assets through superannuation as part of a long-term retirement plan. These are not theoretical high-balance accounts; they often represent decades of working and building farms, small businesses and regional enterprises. Those Australians most certainly need more certainty from the government, not less. They need stable rules. They need to be able to trust the government with their superannuation. That brings me to some further concerns regarding the bill.

The revised legislation removes the earlier effective death exemption and raises questions about how inherited super balances and total and permanent disability payments interact with these new thresholds. These are structural risks but also very human problems. Surviving spouses rely on superannuation balances to maintain stability after the loss of their partner. There is the potential for additional tax complexity and reduced security at a time when they are least positioned to cope with it. Then there are those Australians who, through no fault of their own, are no longer able to work. Superannuation is a lifeline more so for many of this cohort than for anybody else in our community.

Policy in this area must be approached with care, and any legislative change resulting in greater volatility and complication and less predictability will have meaningful consequences. It's important that we view this bill as the beginning of Labor's approach to superannuation rather than the end to it—that is to say, very warily—because it is unlikely, now it has begun, that the Albanese government will ever stop taxing super. It is high spending and high taxing, and superannuation is too tempting a source of revenue for this government. Whether it be new boundaries, new tax bases, thresholds left unindexed, creative interpretations of income—whatever Labor proposes, it can be certain we will scrutinise it to the greatest extent possible.

Superannuation is Australians' money. It is not the government's money. The system surrounding it should promote transparency and confidence and trust. Governments should address spending pressures through fiscal discipline, not by treating retirement savings as a convenient source of revenue. That's the reform the Albanese government should now be pursuing as we approach the next budget.

Tammy Tyrrell (Tasmania, Independent) Share this | Link to this | Hansard source

I'll be supporting this bill because it makes our super system fairer and helps reduce inequality. Superannuation is one of the best things Australia has ever done. It means ordinary workers can retire with dignity after a lifetime of hard work. But, like any system, it has to keep evolving to stay fair. This bill makes a simple and sensible change. It means that super balances above $3 million will have earnings taxed at 30 per cent instead of 15 per cent, and balances above $10 million will have earnings taxed at 40 per cent. I reckon that's fair. Most Australians will never come close to those balances, but, when someone has many millions sitting in a tax advantaged account, it's reasonable that the tax treatment reflects that.

More importantly, this bill helps low-income earners from July next year. The low-income superannuation tax offset, known as LISTO, will increase from $500 to a maximum of $810 and will lift the income threshold up to $45,000. According to the Super Members Council, that change will benefit more than 28,000 low-income Tasmanians, putting about $400 extra into their super accounts. For people doing it tough, that extra boost will make a real difference over time.

But, let's be honest, the earlier version of this bill had some shocking components. It would have taxed unrealised gains, which would have hurt Tasmanian farmers badly. It also had the $3 million threshold locked in without indexation, which is incredibly short sighted. I fought hard to have those parts removed. I'm pleased the government listened. The revised bill is more equitable and doesn't hurt farmers, and the threshold is now indexed so it keeps place with inflation.

This reform will also help the budget bottom line. It's forecast that, by 2028-29, the new tax arrangements will raise around $2 billion. But here's the thing. Two billion dollars is still less than what we raise from the tax on beer, which brings in $2.7 billion, and it's more than half a billion dollars more than we collect from the tax on gas companies, which is expected to bring in just $1.5 billion this year. So, while this bill is good, we need to have a serious conversation about why Australia earns more from beer and from taxing wealthy super balances than we do from overseas gas giants. To me, that just isn't fair.

Finally, while we're talking about fairness in super, there's another reform we should tackle. Right now, workers under 18 are only guaranteed super if they work more than 30 hours a week for one employer. That rule is outdated. It was created to protect small balances from fees, but those protections already exist today. The reality is that most teenage workers, especially young women working part-time, don't get super on their wages because of this rule. Some employers do the right thing and pay it anyway, which is great, but fairness shouldn't depend on how generous your boss is. Women already retire with about 25 per cent less super than men, and that gap can start from their very first job. Scrapping the 30-hour threshold would help close that gap.

The Super Members Council says a typical teenage girl could have nearly $2½ thousand more in super by the age of 18, growing to about $11,000 more before retirement. A typical teenage boy could have about $2,000 more by 18 and around $9,000 more by retirement. That might not sound huge to some people, but it's real money. It's groceries for a year. It's the difference between a full fridge and worrying about how you'll get by.

It's time to scrap the under-18 carve-out and make sure every worker earns super from their first hour of work. I welcome this bill, but let's look at the broader tax and super system and make it fairer across the board. Let's be bold and think of our future generations.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

I'm delighted to have the opportunity to speak in relation to this bill, the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026. The first point I want to make is in relation to some egregious components of this legislation as it was originally presented to the parliament. There were two in particular.

The first was the proposal to apply capital gains tax to unrealised capital gains. The Labor government proposed to impose a tax on unrealised capital gains—that is, a tax on paper profits. It's absolutely extraordinary that the Treasurer would even contemplate proposing such a tax, because it has long been part of Australian taxation law that paper profits aren't subject to taxation—that capital gains on paper are not subject to taxation and that capital losses on paper can't be used to offset other capital gains. The abandonment of that fundamental principle of the Australian taxation system was of deep concern right across this country—to businesses, to superannuants, to those running self-managed superannuation funds and to the general public—so it is very pleasing to see that the concept of taxing unrealised capital gains, taxing paper profits, has been dropped from this legislation. The coalition fought long and hard to get that tax on unrealised capital gains dropped. I am very pleased that the coalition, with support from some members of the crossbench, has been successful in that regard, and I commend all of my colleagues who've been fighting against the imposition of capital gains tax on paper profits.

The other point I want to talk about in relation to the bill as it was originally presented is that the government wasn't originally going to index the threshold at which the greater rates of taxation were applied. This was absolutely nonsensical, and it would, in effect, have punished younger Australians. Again, this is something which the coalition fought tooth and nail against—the failure by the government to propose threshold indexation in the initial legislation —and, again, it is pleasing to see that the nonindexation of the thresholds has been abandoned.

So those were the two issues. First, the taxation of unrealised capital gains has now been dropped from the bill, largely as a result of the coalition standing firm on that point of principle, and, second, the nonindexation of thresholds has also been dropped, again as a result of the coalition's steadfast opposition. This raises a point as to whether or not these concepts were ever taken to the Australian people during the election campaign.

I have a pretty fundamental principle as to how one should conduct oneself in public life: one should take to an election the platform which one will implement after the election. The Labor Party never took to the election taxation on unrealised capital gains, and the Labor Party never took to the election the nonindexation of different rates of tax on superannuation balances. Those two elements of the bill they presented to this parliament were never mentioned when they went to the Australian people to seek a mandate.

It's absolutely appropriate that the Labor Party has been forced—kicking and screaming—to withdraw those two elements from this bill; however, there is still another issue with respect to the legislation before us, and that is that it introduces serious structural risks. My colleague Senator Smith spoke to some of these structural risks, in his erudite contribution in this chamber. One of these is the removal of the effective death tax exemption, which creates uncertainties for families at precisely the moment that they are most vulnerable—when losing a loved one. Surviving spouses who rely on superannuation balances to maintain stability after the loss of a partner could face additional tax complexity and reduced security at exactly the time when they don't need that additional complexity and lack of security. Total and permanent disability benefit recipients are another cohort that must be considered carefully. These are Australians who, through no fault of their own, are no longer able to work. Their superannuation is not an abstract investment vehicle; it's a lifeline. Any change that increases volatility, reduces predictability or complicates access to those funds carries real human consequences.

The other point I would make in conclusion is that this proposal should not be viewed in isolation. It's about Labor being able to spend more and pour more debt petrol on the inflation fire. When spending accelerates without corresponding structural form, governments eventually reach the limits of conventional revenue sources and then test new boundaries. We saw the testing of new boundaries in the legislation as it was originally proposed, in the initial bill. Taxing unrealised capital gains would have created a new boundary, and thankfully, kicking and screaming, the government has had to retreat from that position.

Australians deserve clarity with respect to their retirement funds and superannuation, and the coalition will be watching very, very carefully to see what the government proposes in the lead-up to the May budget. I reinforce the point: be honest with the Australian people. Don't introduce something in the budget, in terms of taxation measures, that you did not take to the last election, because that's unfair to the Australian people. Be upfront with the Australian people.

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 and add my support to the bill. I do want to start, though, by raising my concern that senators have been prevented from having an inquiry into this bill. There's a worrying trend in this place whereby legislation that is perhaps seen as controversial is not referred to an inquiry. I don't understand why senators on my left feel the need to exempt bills like this from inquiry and not back themselves to make their case through the inquiry process—to actually grapple with the complexity and the varying views in the community and amongst experts—and ultimately land with a bill that they think is the right direction to be heading in.

There's a positive story to tell with this bill, and, again, I think that would have come out in the Senate committee process. But, because of the lack of that process, we have missed out on being able to genuinely scrutinise the finer details of this bill. There have been concerns raised about some of the transitional provisions in the bill, and I don't think it's unwarranted for the Senate to examine those concerns and either dispute them or try and fix them if that's appropriate. We are the house of review, and our committees play an important role not just in that review function but in opening up our democracy to the Australian people. We see that in Senate committees, where people have the opportunity to actually come before the Senate and talk about their area of expertise or simply give us their lived experience—their view on something the Senate is dealing with.

Before I get to the bill, I also want to put on record that it's incredibly disappointing that this bill is being guillotined. The government has spent weeks throwing sand in the gears with pointless amendments, reading out full amendments and motions, going through government business time, slowing the Senate down and preventing us from actually debating legislation. When you do actually bring a bill, which I think is very important, you then do a deal with the Greens to guillotine it, despite having the support for this bill to pass. I think this is a real low point in terms of accountability—to have a bill that didn't go to inquiry then get guillotined—and I think the Australian people deserve better from our Senate.

To the substantive parts of the bill, I think most Australians would agree that, when you break it down and look at the figures, our superannuation concessions are, undoubtedly, very generous. As I heard the Assistant Treasurer, Dr Mulino, say in the House:

… super tax concessions cost the budget more than $60 billion per year and will exceed the cost of the age pension in the 2040s.

I don't see any issue in helping people build their super balances. That's great public policy. We want less reliance on the age pension—which, if you speak to anyone on the age pension, is incredibly hard to get by on. We want fewer people struggling to keep their heads above water in their senior years. But the reality is that the distribution of those concessions is not even. As our colleague Senator McKim has noted publicly, the 10 richest super accounts in Australia hold an average of $423 million, more money than the vast majority of Australians would ever see in their lifetimes.

The simple reality is that super tax concessions are not helping people to build a nest egg for their retirement. They are not even really helping to encourage additional savings, according to the Retirement income review. At present, they're largely offering a tax break for people seeking to amass incredible wealth. According to an analysis by the Australia Institute, the richest 10 per cent receive $22 billion in tax breaks. If we can be more prudent with these concessions so that we can achieve more for retirees, then I think we should be doing that.

Since this bill was first introduced in the last parliament, there have been significant changes. Really, I think there are some good changes, and I really commend the Treasurer, the Assistant Treasurer and their teams for the work that they've done on this bill. The first is the indexing of the high-balance threshold. This was not a fringe concern. It was painted by some as a fringe concern, but it was a very real concern raised—that, if we don't get the settings right now, we will entrench yet another system that will fall unequally on young workers. Today, $3 million is a lot of money, but it won't be in the decades to come. To quote Sally McManus from the ACTU:

I do think it's got to be indexed because you've got to make sure eventually people don't end up there—

meaning, of course, those everyday Australians on ordinary wages who would have fallen victim to a $3 million threshold had that not been indexed.

There's also the change to remove the policy of taxing unrealised capital gains, considering the impacts that would have had on small businesses, farmers and people holding volatile assets in areas of public interest. On the latter, I was particularly concerned about the impact this could have had on R&D and things like medical research at a time where public investment in R&D is at a record low. Early-stage drug discovery and medical research are inherently volatile, and changes that disincentivise interest and investment in this line of work are something we really need to take seriously. As the former secretary of the ACTU Bill Kelty said recently:

I think taxing unrealised capital gains is bad policy. It distorts the effective tax. Changes your income flows, and if it was on superannuation generally, there would be a revolution about it.

I also want to commend the government and celebrate the changes that are being made to the low-income super tax offset, the LISTO. The LISTO is a fairness measure that is supposed to ensure that low-income Australians aren't paying more tax on their super than their take-home pay. But, since it was first introduced, tax bracket and super guarantee rate changes mean that it's now out of date, and more than a million of the nation's lowest income earners are paying more super tax than they should. In the ACT, that's 17,000 Canberrans, around 60 per cent of whom are women. Fixing this is good policy, ensuring that people aren't paying more in super tax than they are in income tax. The government and this parliament have a clear role in building a tax system that helps everyone to thrive in our society and, in this case, to build some savings for retirement. Making sure that we're using and spending tax concessions prudently is part of that so that we can make investments where they're needed to help people maintain a basic standard of living when they're older.

On a final note, I wanted to talk about defined benefits. I represent many people here in the ACT, many Canberrans, who receive a defined benefit, and I want to acknowledge their concerns. The government says this policy will fairly apply to people on defined benefits, but I just don't believe that that case has been made. Again, in the absence of a Senate committee and or even a committee of the whole to ask these questions, I do have some concerns in this area.

People who receive a pension through a defined benefit scheme often pay the full marginal tax rate on that pension. It's essentially already treated as income. I'm concerned that there will be cases where people on defined benefits may pay a higher effective tax rate than anyone else in Australia—a higher effective tax rate than billionaires in Australia pay. There are clear differences between accumulation funds and defined benefit schemes that are relevant here—for example, the inability to split super with a spouse in the accumulation phase. As a constituent has advised me, with a defined benefit scheme, you can't roll funds back to an accumulation phase so they can fund entry into aged care. You can't draw down funds to pay for essential medical procedures. The most pressing issue is the uncertainty over the method that is going to be used to calculate the value of someone's super interest in a defined benefits scheme.

I recognise that this issue will be a disallowable instrument, and we can look at the issues associated with that method when it's tabled, but I want to make very clear that I really agree with what bill is doing, but I really regret that we haven't had the time to actually look into this in more detail to be able to assure people that the disallowable instrument will actually do what the government is telling us that it will do.

Clearly, with reform, we will never have the perfect result in everyone's eyes, but I think this is a genuine improvement for intergenerational equity and a step in making our tax system fairer. Again, maybe in contrast to what we've heard from coalition senators, I would urge the government to actually have more courage when it comes to tax reform. We are living in a country with a growing wealth inequality, a growing intergenerational inequality, and we must hold firm to the egalitarian ideal that, in Australia, you don't have to have wealthy parents to make your way in this great country. If we are committed to that, then we require tax reform and to look at housing and how we treat that more as a human right than an investment vehicle. How do we stop talking about housing as an asset class and start referring to it as being people's homes, and we want to ensure that everyone has a house to live in.

There is clearly much to do this area, including, of course, getting a fair return for our resources. Again, I find it outrageous that we live in a country that is one of the biggest fossil fuel exporters in the world, but, when it comes to gas, we're happy to give away so much of it for free and then turn around at budget time and say to older Australians and to Australians who desperately need support: 'I'm sorry. The budget is tight. We simply cannot afford to help you.' We need to reframe. These are Australia's resources. They belong to all of us, and, if we want to look at the Norwegian model, they actually belong to future generations of Australians. We could be saying: 'Yes, you can take our gas. You can export it, but you're going to pay us a 25 per cent export tax, and that's actually going to go into services for Australians, and we're potentially put some of that into our Future Fund for future generations.' That is, surely, the kind of thinking that we can and should have in this country.

I'm hearing from so many Canberrans and not just Canberrans but people across the country who are saying, 'We need a fairer deal on our natural resources; we need to be getting a cut; stop giving them away for free.' So, as part of the broader discussion on tax, I urge the government to have courage in this area. When it comes to a 25 per cent tax on gas exports, clearly, the Australian people want that and they want that soon.

Maria Kovacic (NSW, Liberal Party, Shadow Assistant Minister for Women) Share this | Link to this | Hansard source

The coalition stands for lower taxes, lower inflation and lower interest rates. It was coalition and community pressure that forced this Albanese Labor government to abandon taxation of unrealised gains and their indexation freeze. When this was first brought out, we immediately came out and opposed it on the basis of the taxation of unrealised capital gains and on the basis of the fact that it wasn't indexed. Now, as the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 comes before the parliament, we find that there are no unrealised capital gains and it is in fact indexed.

This is a government that has been found out and is retreating under the pressure of not being able to properly form legislation. We spoke about this in the chamber when it first came before it—about the fact that it was put together in a shoddy manner, that it didn't consider unintended consequences, that it didn't think about who it would impact. I note that Senator David Pocock was speaking about the intergenerational challenges that we have. The reality is that this legislation, in its previous form, was most likely going to adversely impact young people—young Australians. Those that are starting out today are the ones that were most likely to have reached that $3 million threshold and those most likely to never own their own home. So they would have been hit twice by the actions of this government.

But thanks to the sustained scrutiny from the coalition, from the superannuation sector and from small-business owners and everyday Australians we forced Labor to step back from the most outrageous elements of this proposal. Those elements were around taxing money that you hadn't earnt yet, money that hadn't been realised yet—taxing hypothetical gains, not real gains. That's what this government is about—spending, spending, spending and then taxing, taxing, taxing in order to make up for their spending, spending, spending. This was not just a proposal that was aimed at hurting retirees. As I've just stated, this was something that would hurt future generations, stealing from the future of younger generations and taking away from them now without having indexed into the future.

We exposed a clear breakdown in the working relationship between the Prime Minister and his treasurer. The original design to tax unrealised gains represented a fundamental break with longstanding principles of the Australian tax system. This wasn't just a change to tax on superannuation; this was a change to the way the Australian taxation system works. Australians have always understood that tax is paid when income is realised—when you get the money, when a gain is crystallised, when the cash is actually in your hand. But this government had proposed to tax those paper gains, the hypothetical gains that I mentioned earlier, particularly in volatile asset classes. That's not a minor tweak; that is a deliberate, strategic, structural shift that this government was trying to introduce. That would have set a dangerous precedent across the entire tax base, and that's why we fought against it so hard. We had the support of the superannuation sector in the way that we did because this was fundamentally wrong.

Equally concerning was the government's refusal to index the $3 million threshold. In the same way that we have impacts today with bracket creep, the initial intent of not indexing meant that young Australians of today would more easily reach that $3 million threshold once they got closer to their own retirement age. Most likely they would have been grappling with how to manage their housing into retirement, because they probably wouldn't have had a home of their own at that point either.

We are in a very sticky inflationary environment, and we have seen that inflation go up in recent times. That has been made worse by this Treasurer and his willingness to pour debt petrol onto the inflation fire, and failure to index thresholds was a silent tax hike. We have heard people from the other side and in the other place talk about the fact that it's not government spending and that those on this side are making up the fact that government spending is increasing inflation. We've had independent economists and the Governor of the Reserve Bank all say that government spending is a contributory factor to that inflation—and yet they don't want to admit it, they don't want to acknowledge it and they don't want to rein in that spending.

I think it goes to the transparency that Senator Pocock spoke about. I didn't agree with everything he said, but there were a few things that I thought were really important. He talked about transparency, scrutiny and the inquiry process. But they aren't the only issues that this government has in this chamber, in particular. I point to the guillotining of this bill, where the debate will end this evening. We need to think about the fact that we spent, I think, between seven and 10 hours last week in this chamber crossing the floor, backwards and forwards, on nuisance amendments from this government on orders for production of documents. We didn't spend it debating bills such as this one. We didn't spend it debating other legislation. We wasted the time and the resources of Australian taxpayers at the behest of this government because it wanted to play games in this chamber instead of us doing our work.

So, today, the debate on this will be guillotined. We won't get to talk about it as we should. We won't get to scrutinise it. We won't get to challenge it. Not everybody will have their opportunity to have a say. That's because we wasted time last week doing things that brought no benefit to the Australian public instead of doing our work on matters like this one.

When I think about the government's backdown on this policy, I think it demonstrates one thing very, very clearly and that's that this was never really a properly settled policy and principle, because if it were properly considered and settled it would never have come here in the form that it did. It was a blatant revenue grab that was exposed, and it collapsed entirely under the scrutiny of this chamber. What does that tell us? That this government is pretty much willing to do anything that it can to earn more or to get more tax revenue to cover up their spending black hole.

At the last election, Australians were not presented with a tax policy that would tax unrealised gains in superannuation. The Prime Minister didn't come out and say that that was the plan. The Treasurer, Jim Chalmers, didn't come out and say that that was the plan. There was not a single MP or senator from the other side that stood up and said, 'We have a plan to tax unrealised capital gains.' They didn't have the guts to do that. They didn't want to be upfront with Australians. But, once they got in, they decided that that was the plan. Australians were never told that this government planned to change longstanding superannuation settings or that they would remove indexation. Why does that matter? Because promises matter in democracy. Transparency matters in democracy. Scrutiny matters in democracy. There is a point in time when we have to say: 'Enough is enough of these games. Tell us what you're going to do, and do what you say you're going to do.' That is what Australians expect from us. They do not expect the games that they have seen in this chamber over the past week.

Major structural tax changes should be put clearly and transparently to the Australian people so they can make a decision on that when they vote; they shouldn't be surprised by them in the middle of a parliamentary term. But this proposal, like much of the government's work, appeared out of nowhere with limited consultation and a rushed and flawed legislative timetable. I think they probably have to be the key hallmarks of legislation from this government—no transparency, limited consultation and poor legislative work. I think that pretty much sums up most of what we've seen. I think this debate, around unrealised capital gains and indexation, resonated so strongly with Australians because they aren't stupid. They realise when someone's trying to pull the wool over their eyes and trying to slip something through without it being noticed.

When it came to retirement savings—which those on the other side usually, very loudly, jump to protect, in case there are any questions around choice or the use of those savings for other things—the government became silent about taxing those unrealised gains and how that could affect people, particularly when there was no indexation. They were silent on how it would impact those generations of young people who are just entering the workforce now. What it highlights is that we have a government that really cannot be trusted. We were promised by this government and by this treasurer that they had beaten inflation and that they had beaten high interest rates. We all know that that's not true; we all know that that's not the case. Every time interest rates go up, or inflation goes up, it's not the Treasurer's fault or the government's fault; it's somebody else's fault.

The reality is that we are very vulnerable at the moment with what is occurring in the Middle East because we have much higher inflation than most of our contemporaries. The increase in fuel prices—if the conflict continues and we do end up seeing settled-in shortages of fuel—will actually impact us more than others. Then those on the other side will say, 'It's not our fault that there was a war in the Middle East.' That is true, but it is your fault that inflation remains where it is today. It is your fault that it hasn't come down as it has for our contemporaries globally. It is your fault that you have spent too much, and it is your fault that you have chosen to tax Australians more in order to compensate for that spending.

Before the last election we were told by this government that they were going to make life easier for families. Yet now Australian families are finding it harder to pay for the things that they need to pay for. They are finding it harder to buy the things that they need to buy for their children and to do the things that they need to do to maintain their standard of living. They have less flexibility, and they have less choice. It has been harder for hardworking Australians to pay their rent, to pay the mortgage and to pay their energy bills—which, as we all know, didn't go down by $275 but have gone up by so much more; that number is now comical.

The fact remains that the matters of inflation and high interest rates have beaten this treasurer and this government. They don't know what to do. They don't know how to handle it or to address it because they don't know how to curtail their own spending. They are unable to manage our economy, so they are looking for everyday Australians and for Australian small businesses—particularly those small businesses that hold their assets in super—to actually pay more. What they have proposed here reinforces that broader pattern of higher spending first and then new taxes that Australians will pay for. That's not reform; that's fiscal mismanagement. As I said at the outset, we believe in lower taxes, lower inflation and lower interest rates, and we are totally focused on restoring the standard of living for Australians.

Ellie Whiteaker (WA, Australian Labor Party) Share this | Link to this | Hansard source

Labor believes that Australians should earn more and keep more of what they earn. These bills—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—strengthen the fairness and the long-term sustainability of Australia's superannuation system, and I would say that is core Labor business. They ensure that generous tax concessions built into superannuation are properly targeted at their original purpose, which is to help Australians save for retirement.

Superannuation was never intended to operate as a tax shelter for large fortunes; it was designed to provide working Australians, ordinary Australians, with security and dignity in retirement, and those are principles that Labor is committed to. These reforms recognise that principle. They maintain concessional treatment for the vast majority of Australians while modestly reducing tax breaks for those with the very largest of super balances. Importantly, the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 also strengthens support for low-income workers by increasing the low-income superannuation tax offset.

Taken together, these changes make the super system fairer. They make it stronger. They will protect retirement savings for ordinary workers, build super balances for those who need them the most in retirement and ensure the system is sustainable for decades to come. There's no doubt that Australia's superannuation system is one of the most successful public policy reforms in our nation's history. It has transformed retirement in our country, giving working people the chance to retire with independence and security, and it must evolve to keep pace with changing economic realities. Superannuation receives tax concessions because we want Australians to save for their retirement, but these concessions are funded by the public and should therefore be targeted at their intended purpose.

Over time, what we've seen is that a small number of accounts have accumulated balances worth many millions of dollars. These are not your average Australians; these are wealthy Australians with high superannuation balances. The tax concessions go well beyond what is required to support a dignified retirement, and they can instead become a vehicle for large tax advantages that were not the original intent of the system. When that happens, it undermines the fairness of the system and places unnecessary pressure on the federal budget. This reform ensures that superannuation continues to serve the people it was designed for: ordinary, hardworking Australians saving for retirement.

It's about restoring balance to that system. It recognises that superannuation should remain a concessional environment for saving but that those concessions should not be unlimited. The truth is that the overwhelming majority of Australians will have absolutely no change under these concessional changes. Workers contributing to their super throughout their careers will continue to benefit from the same concessional tax treatment that has supported retirement savings since super was introduced. What this legislation does is modestly scale back tax advantages for the people with the very largest balances. It will ensure that superannuation continues to reward saving while avoiding excessive contributions that benefit a very small number of people at the top. That work is extremely important.

But what I am most proud of is the support that this provides to working Australians who earn the least and often do some of the toughest work in our nation. We know that low-income Australians often face the greatest barriers to building adequate retirement savings, and those workers still pay tax on their super contributions even though their incomes may fall below the income tax threshold. That has long been recognised as an inequity in the system. The low-income superannuation tax offset was designed to correct that problem, ensuring these workers are not disadvantaged by the way super contributions are taxed, and these bills strengthen that protection.

The maximum LISTO payment will increase to $810, and the eligibility threshold will rise to $45,000. This will mean tens of thousands of dollars extra in the bank balances of many Australians when they retire. More than a million Australians will be better off in retirement because of these bills. That's more than a million ordinary, hardworking Australians who will be better off thanks to Labor's enduring commitment to superannuation and these bills.

We know that, mostly, it is women and part-time workers who have historically been left behind in retirement savings. In retirement, women retire with significantly less than men—around 25 per cent. That's tens of thousands of dollars. The day women retire, they have tens of thousands of dollars less in their superannuation accounts than men. There are lots of reasons for that—like the gender pay gap, to which our government has been absolutely committed to closing. We can see that happening, with the release of WGEA's gender pay gap reporting last week.

Career interruptions, unpaid caring work and part-time employment all contribute to the super gap. Over time these factors compound and lead to substantially lower retirement balances for women across this country. Labor says that is simply unacceptable. That is why we are committed to making sure that Australian women retire with more money in their super balances. Increasing the low-income superannuation tax offset is an important part of doing that work. It means women and workers in low-paid sectors who are more likely to retire with less will receive the full benefit of the super contributions made on their behalf. It is an important step in ensuring that every Australian can retire with dignity.

These reforms sit alongside a whole series of changes that Labor is undertaking to strengthen Australia's superannuation system. The superannuation guarantee has now reached 12 per cent, ensuring Australians can build larger balances over the course of their working lives. Payday superannuation reforms ensure workers are paid their super contributions when they're paid their wages, closing the doors on unpaid super and making it much easier for workers to track when they're paid their super or not. Super will be paid on government funded paid parental leave, which will go a long way to closing the gender retirement gap. Performance testing has been expanded across hundreds of superannuation products, ensuring Australians are protected from underperforming funds. Together, these reforms represent the most significant strengthening of the superannuation system since it began.

For most Australians, superannuation is the most important financial asset they will hold. It is the foundation of their retirement security. The power of super lies in its long-term investment and compounding returns, so every day matters. Contributions made today grow over decades, turning small regular payments into meaningful retirement savings for Australian workers. That is why trust in our superannuation system is so important. Australians deserve to know that the system is fair and working in their interests, and reforms that protect that fairness help maintain that trust.

We must never forget that it was unions and union members right across this country who fought for superannuation in the seventies and eighties. Before unions won their historic campaign for compulsory super, super was deeply unfair. Less than one in four women and blue-collar workers had a superannuation account, and now every Australian worker has the right to super. This is generational, life-changing stuff. Unions continue to campaign to protect super and have campaigned to increase the super guarantee over many years. To the hardworking members and delegates of unions right across this country who have campaigned on keeping super fair: thank you for that really important work.

Labor will always protect Australian workers and their retirement savings through our super system, and that is why we are committed to making our superannuation system stronger and fairer. We made superannuation compulsory because we wanted to make sure that every Australian who works hard throughout their lives has the security of knowing that they can retire with dignity. The superannuation system works best when it is fair, balanced and sustainable, and this legislation protects that integrity. It is in the spirit of what our superannuation system was created for back in the nineties. It maintains concessional treatment for ordinary Australian workers to make sure that they are able to save and see the benefit of the many years of compounding interest on their retirement balances while ensuring that the very, very wealthiest do not receive unlimited tax advantages through our super system.

These are modest reforms. They are responsible and they are necessary, but what is most powerful about this bill is the impact it will have on women and low-paid workers in this country—workers who do the toughest of work, whether that is in our aged-care homes, taking care of our grandparents, parents and friends; whether it's in our childcare centres, taking care of our children, grandchildren, nieces and nephews; whether it's retail workers, who are often at the forefront of some of the toughest work; or whether it's blue-collar workers on the shop floor. It makes sure that, no matter what it is that you're doing, you are able to benefit from a stronger and fairer retirement system.

Labor will always protect your super. Labor made super compulsory, and we will always ensure that the Australian superannuation system continues to deliver dignity to Australians in retirement and security for every working Australian.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise this evening to speak in support of the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 and the associated Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026.

Superannuation has become a cornerstone of Australia's retirement income system and is designed to ensure that all working Australians can retire with dignity and financial security. Since its introduction, superannuation has been shaped and fortified by successive Labor governments. In recent years the Albanese Labor government has continued this legacy, strengthening the system through meaningful reforms and with a renewed focus on fairness and long-term sustainability. These bills continue that tradition, a tradition that we on this side of the chamber are very proud of—strengthening our world-class superannuation system.

The Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 will increase tax concessions for workers on low incomes by boosting the low-income superannuation tax offset. The bill will also ensure that concessions for individuals with large balances above $3 million are better targeted and more equitable. Tax concessions for very large superannuation balances are increasing in cost and becoming less sustainable. At present super tax concessions cost the budget more than $60 billion per year and will exceed the cost of the age pension in the 2040s. That's the reality of the current situation. Right now, around 38 per cent of the benefit from super tax concessions goes to the top 10 per cent of income earners and 55 per cent goes to the top 20 per cent. These concessions were intended to support Australians in retirement, not provide tax concessions for wealth accumulation or estate planning.

It's worth remembering that Australia's compulsory superannuation system was introduced by the Keating Labor government in 1992. As the former speaker said, it was after a long and hard-fought campaign by unions across the country to ensure that there was more fairness and that Australian workers could retire with dignity. Superannuation is in Labor's DNA; we believe in it. The superannuation guarantee mandated that employers contribute a percentage of an employee's earnings into a super fund, ensuring workers would accumulate savings for their retirement. This was a visionary policy, shifting the nation away from sole reliance on the age pension and towards a three-pillar retirement system: the age pension, compulsory superannuation and voluntary savings. Superannuation has since become a defining feature of Australia's economic and social landscape. It has helped millions of Australians build wealth for their retirement. It has reduced pressure on government finances and contributed to the nation's financial markets through the investment of superannuation assets.

The bill before us today will better target super concessions. It reflects practical changes to the design and implementation of the original policy, taking into account more than two years of consultation. From 1 July 2026, the concessional tax rate applied to earnings on balances between $3 million and $10 million will be 30 per cent and earnings on balances above $10 million will be taxed at a concessional rate of 40 per cent. I actually think that if you've got $10 million in your superannuation account you can afford that 40 per cent concessional tax rate. Balances below $3 million remain unchanged, which covers the majority of Australians, and will continue to be taxed at 15 per cent. Both thresholds—the $3 million and $10 million caps—will be indexed to maintain alignment with the transfer balance cap. The earnings will be calculated based on established income tax concepts and realised gains.

There has been some criticism of this policy, but the reality is that these reforms will affect less than 0.5 per cent of Australians with superannuation accounts in 2026-27, and the higher rate, for balances above $10 million, will affect less than 0.1 per cent. Those opposite may want to rail against superannuation reform because it doesn't affect them or their shrinking base. They even opposed superannuation when it was first introduced. They don't believe in it, unlike Labor, who believe that all Australians should get a fair go and have the opportunity to be able to retire with dignity, not like the generations before the nineties. I worked in the short-term money market for a company in Melbourne. As a woman, you had to work for the company for 10 years, and then you may have been invited to join their superannuation scheme. How many young women will stay in a company, before having a family or moving on, for 10 years? And then it didn't mean you were going to be invited.

Labor senators on this side of the chamber firmly believe that there needs to be fairness in the system. The Labor government have been the architects and the defenders of superannuation since 1992 and before that. Labor's policies have consistently aimed to expand coverage, increase adequacy and ensure fairness in the system. Notable milestones include the expansion of the superannuation guarantee rate over time, improvements to the protection of low-income earners and reforms to address gender and income inequities. Labor's commitment is underpinned by a belief in universal access to a secure retirement and the principle that all Australians, not just the wealthy, deserve to benefit from the nation's prosperity in their later years. This ethos has driven Labor's efforts to strengthen superannuation even when faced with political opposition or calls for deregulation.

Those on the other side wanted young people to raid their superannuation to buy a home, and their former leader suggested you needed to have rich parents and needed to get them to help you. Since coming to power in May 2022, the Albanese Labor government has taken significant steps to further strengthen Australia's superannuation system. Central to their agenda is the commitment to ensure superannuation delivers on its core purpose to provide a dignified and, as I said, secure retirement for all Australians. One of the Albanese Labor government's early and defined reforms was to move to legislate the objective of superannuation by formally recognising that superannuation is to provide income in retirement to be able to substitute or supplement the age pension.

The government has set a clear benchmark for future policy decisions. This legislative clarity is designed to protect the system from short-term political interference and ensure that future reforms are consistent with the system's core purpose. The Albanese Labor government has strongly supported the scheduled increases to the superannuation guarantee rate, which is set to reach 12 per cent by July 2025. This increase will mean higher retirement savings for millions of Australians and, in particular, those in the low- and middle-income brackets. By backing these increases, Labor is ensuring that workers are receiving a fair share of the nation's economic growth in their super accounts.

Additionally, the government has moved to close loopholes that had previously allowed some employers to avoid paying superannuation on certain wages, such as overtime for some workers. These reforms are expected to ensure more consistent and fair contributions for all employees. Our government has also focused on making superannuation fairer and more equitable. A significant incentive was the move to pay superannuation on government funded paid parental leave from 1 July 2025. This measure is especially important for women, who typically retire with less super due to carer breaks and part-time work. By recognising parental leave as a vital period that is deserving of super contributions, Labor is taking a concrete step to narrow the gender retirement gap.

The government has also announced plans to reform tax concessions for high-balance super accounts, which ensures the system remains sustainable and serves its intended purpose as a retirement-saving vehicle, not a tax shelter for the wealthy. Today, this bill again continues this tradition. In fact, let us look at the numbers this reform will create. Workers will receive up to $810 per year in additional contributions to their superannuation accounts, with the average payment increasing substantially. Over a working life, this could mean up to $15,000 more at retirement, depending on an individual's income over their career. That is a significant amount of money that will make a real difference for, particularly, low-income Australians.

In 2027-28, because of these changes, 770,000 additional Australians will be eligible for this increased payment, 490,000 people will receive a higher payment and a total of 3.1 million Australians will be eligible. I can proudly report that 60 per cent of those benefactors will in fact be women. We know the fastest-growing cohort of homeless people in this country is women. This will go some way towards ensuring that women have a better retirement nest egg and hopefully prevent them from finding themselves in those difficult circumstances. But, further, those 1.3 million Australians who will benefit directly from these changes include 750,000 women and 550,000 young people under the age of 30.

I am proud to be part of this government because we actually stick to what we believe in, and we believe all Australians deserve respect and deserve to have a secure retirement when they leave the workforce. We have also taken many steps since we have been in government to ensure that Australian women have a better life. Superannuation in Australia remains one of the world's most successful retirement savings systems, and its ongoing strength and fairness can be largely attributed to the vision and stewardship of Labor governments. The Albanese Labor government's reforms enshrining the purpose of super, supporting higher contributions, closing loopholes and promoting equity are the latest chapter in this proud legacy. These measures ensure that superannuation will continue to deliver for generations of Australians, providing financial security and, most importantly, dignity in retirement. The workers that work in retail, look after our elderly, look after our children and are on the shop floors right across this country should be treated with equity. This is going to assist them and ensure that we have a much better retirement for all Australians. It will also reduce the burden on Australian taxpayers of the age pension. I commend this bill to the House.

Lisa Darmanin (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

It gives me real pleasure to rise in support of these bills, 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. I would like to talk about a lot of things, but I'll keep it as short as I can. I would really like to pay tribute to those who have pushed for these improvements to the LISTO, in particular, over an extended period of time. We have had some tireless advocates, predominantly from my old union, the ASU, Women in Super, the ACTU and some funds, such as Hesta, who have lots of women amongst their membership, who have been pushing to bring the LISTO in line with delivering what we all want to see—and that is improved retirement outcomes for low-income workers and women in particular.

As we know, at the time of the introduction of the LISTO many years ago, it was seen as a fairness fix. This legislation seeks to keep in line with that objective, continuing for it to be fair. The LISTO was frozen for 13 years and had fallen behind because of changes to the tax brackets. What these changes will do is make up for those gaps. When the tax bracket changed on 1 July 2020 from $37,000 to 45,000, the LISTO did not. That meant that people earning between those amounts did not get the super tax refund. Missing out on tax concessions adds up, as we know, over a working life. A woman in the bottom 20 per cent of wage earners could lose up to $60,000 from their superannuation balance by retirement. This is a significant reform, and boosting the LISTO will benefit 1.3 million Australians—of which around 60 per cent are women. That will help to narrow the gender pay gap in retirement. Workers could receive a potential benefit at retirement of around $15,000. For that alone, it is worth supporting this legislation.