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

My question is to the Minister representing the Treasurer, Minister Gallagher. Minister, why is it that the government is seeking, in the tax reform legislation before the parliament, to remove people's access to grandfathering if there's a change in ownership of a jointly-held asset transfer that is simply due to death or divorce? Why does that count as a transfer in ownership?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) | Link to this | Hansard source

I thank Senator Pocock for the question. As Senator Pocock knows, we are making these changes to make the system overall fairer and simpler and to better align the tax paid on assets with the tax paid on income, to make it fairer. That is the overarching aim of that element of the—

Michaelia Cash (WA, Liberal Party, Leader of the Opposition in the Senate) | Link to this | Hansard source

Death and divorce—

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) | Link to this | Hansard source

Yes. I'll get to it, Senator Cash. Thank you, I don't need your help. I have one minute. The grandfathering arrangements in relation to shared ownership are consistent with the existing arrangements in the tax system around the acquisition of assets. Wherever possible, we've aligned the arrangements in the core legislation with the existing system so that new laws operate effectively and consistently with established administration of the tax system. The grandfathering rules we have put in place are reasonable arrangements that mean what you owned at budget night can continue to be negatively geared in the future, but anything bought, sold or acquired after that date is treated under the new rules. There are often, as we all know—when we get through the committee—complex interactions and details which, as we've said, we will work through in the usual way.

Sue Lines (President) | Link to this | Hansard source

Senator Pocock, first supplementary?

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

But, Minister, surely if the parliament is going to grandfather these arrangements, we should just grandfather them properly. I don't see how it's fairer and simpler, when just because your spouse dies or you get divorced you lose those benefits. Isn't it a bit disingenuous to say that it is consistent when, under the current arrangements, you continue to get the 50 per cent CGT discount but going forward you won't, should your spouse die?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) | Link to this | Hansard source

I'll see if there's anything further I can add to my earlier answer. I accept that there are complex interactions in any changes to tax arrangements. What we have tried to do with the drafting of this legislation is to make it as consistent as we can with the existing system and all of the different ways that various tax laws interact with each other. But I'm not sure there's anything else I can add. We have sought to protect the grandfathering arrangements to make sure that people are not penalised for the arrangements and the investments they made under the earlier system, and there are extensive grandfathering arrangements that have been put in place—that some have criticised us for for being too generous—to make sure that people aren't disadvantaged by the reforms going forward.

Sue Lines (President) | Link to this | Hansard source

Senator Pocock, second supplementary?

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

Minister, does the government concede that, if this isn't amended, it will be women who are disadvantaged the most, given women have 20 per cent less super on retirement and outlive us men?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) | Link to this | Hansard source

What I would say about the issues that women raise with me around concerns about getting older and retiring is that they don't have enough super, they haven't earned enough income during their working life and they weren't compensated for the periods of time that they were in and out of the workforce. These are the issues that are raised with me, overwhelmingly, and violence against women and health provision for women and housing provision for women. They are the overwhelming issues that are raised with me. When we look at tax reform, the Women's Budget Statement provides commentary on the entire package of our tax reform measures and their impact on women and, overall, we have sought to address issues of gender through the tax arrangements and the reforms that we've put in place.