Luke Howarth
by leave—I move amendments (1) to (4) as circulated in my name together:
(1) Clause 2, page 2 (table items 2 and 3), omit the table items.
(2) Schedule 1, page 4 (line 1) to page 51 (line 25), omit the Schedule.
(3) Schedule 2, page 52 (line 1) to page 55 (line 24), omit the Schedule.
(4) Schedule 3, page 56 (line 1) to page 57 (line 6), omit the Schedule.
These amendments omit schedules 1 to 3 from the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023. These schedules would impose the new divisional 296 tax on superannuation accounts. We are moving these amendments to hold the government to account. To everyone who's going to be affected by these changes throughout Australia: we are moving these amendments for you because this is a broken promise, pure and simple. The Albanese Labor government said they would not be changing super. They promised there would be no changes. This is a major change, particularly for people who have higher balances, because the tax is doubling. That is a major change if you are doubling the tax and you said before the election that there wouldn't be major changes. Now they're doubling the tax. That is a major change. This new super tax sends the message that the Albanese Labor government wants some Australians to pay more. This is at a time when Australians are struggling under persistent inflation, a GDP per capita recession, a record increase in interest rates and soaring energy prices.
Government proposals 1 to 3 have some key flaws. One, as I said before, is that it is a broken promise, and it comes off the back of not just no changes to super but also no changes at all to the stage 3 income tax cuts, which also affected this group of people considerably. Another flaw is that it isn't indexed.
Kylea Tink
Hang on!
Luke Howarth
I heard the member for North Sydney—I don't control the tactics here, but I was giving you a few 'hear, hears'. This means that young Australians will pay more. Analysis from the Treasury has shown that a 20-year-old today earning the average wage over their lifetime will pay higher taxes under this scheme, meaning that up to two million Australians could be captured by the time they retire. The minister opposite said it's only on high balances, but the reality is that this will impact a lot of Australians. The minister opposite was saying that the average balance is $150,000 to $200,000 at the moment, but in the future, of course, we know that $3 million, when someone retires in 45 years time, is going to be worth a lot less than what it is today.
It shouldn't be up to future governments to make all these changes. The government and the minister, whether it's this minister or any other minister in the Albanese government, deserve to get this legislation right. It shouldn't be up to future governments. I accept that not every government puts in policy that we always agree with. I mean, the minister opposite mentioned divisional 293 before—once again, not indexed; it probably should have been. It's wrong because, at the end of the day, he'll be getting less in his super account than a backbencher will right now, because he's taxed at 30 per cent rather than 15 per cent.
The other thing is that this taxes unrealised capital gains. I know the member for Wentworth mentioned this, and it's true. It means that retirees, superannuants, farmers, and small and family business owners will be hit the hardest and may have to sell assets all because there has been a capital gain. I could go to anyone in Australia, people in the gallery or anyone else, regardless of what they earn, and ask, 'Do you think that there should be a tax on unrealised capital gains?' I could say to people in the gallery: 'You bought a house for $500,000. It's now worth $800,000. You haven't sold it yet, but the government wants tax on $300,000 because that's your capital gain.' That is what this Albanese government is doing to Australians right now with this bill, and we in the coalition oppose it. I'd ask people who are listening around the place, is that a major change to super? I think it is.
We oppose the whole bill—the Leader of the Opposition has said that—based on what the government said. But I can tell you two things, even when I talk to people who are affected by this: a tax on unrealised capital gains is wrong and it needs to be indexed. Of course, the doubling of the taxation is a big issue. The minister said before that people have the pension. The reality is that we want people to save in their retirement so that they are self-funded. (Time expired)
Stephen Jones
I feel wry amusement listening to the shadow minister argue in favour of a proposition that he just voted against a few moments earlier. The shadow minister calls into question the government's contribution and commitment to superannuation. It was Labor that established the system of universal superannuation in this country, and it is a roaring success. Every day we work to strengthen it, deepen it and improve it. Over the term of our government we've increased the contribution from 10 per cent, and it will go to 12 per cent by July next year. That means that people entering the workplace today will have thousands and thousands of dollars more in their superannuation account than they would have had the coalition had its way and axed those increases in the superannuation guarantee levy.
We've introduced superannuation on paid parental leave, which means that, from next year, women who are leaving the workforce temporarily to look after their child will gain contribution of superannuation on that government funded paid parental leave. It should have happened decades ago, and it's happening as a result of the contribution of this government. It means that that person in retirement will be up to $4,000 better off because of this change. We're introducing payday super, and this is meaningful because too many workers are not getting the superannuation that they are owed. It means that the estimated $4 billion in unpaid superannuation that is occurring every year will be paid on payday, and there will be more money in a worker's superannuation account. Nobody can doubt the commitment of the Albanese Labor government to ensuring that we strengthen and protect our superannuation system.
The change is modest. It will affect less than 0.5 per cent of taxpayers—around 80,000 superannuation fund members with balances of in excess of $3 million. We've heard a lot of noise from the coalition about budget discipline and the need for budget discipline, but the simple fact of the matter is this: we inherited a budget in tatters. It was the biggest debt and the biggest deficit that this country has ever seen. Over the first two years, we turned those big Liberal Party debts and deficits into Labor government surpluses. Over $80 billion worth of savings have been found to pay down their debt and to get the budget back into a sustainable position. They promised it for nine years and didn't deliver it. We've delivered it in our first two budgets.
But you can't do that by just saying it; you can only do that by making the tough decisions. We want to be able to spend more on defence. We want to ensure that our health system is sustainable. We want to ensure that our aged-care system is sustainable. We want to ensure that the National Disability Insurance Scheme is still here in decades to come. To guarantee those things, you've got to ensure you are taking the tough, disciplined and difficult decisions. This modest change to our taxation arrangements will still mean that those 0.5 per cent of taxpayers will have an incredibly concessional taxation arrangement on that proportion of their superannuation fund over $3 million. It will still be concessionally taxed, but not at the same concessional taxation rate. This is a modest change, making our system more sustainable and adding to our efforts to ensure that we can get some fiscal discipline our budget back into shape. For these reasons, we will be opposing the coalition's amendments.
Luke Howarth
I hear the minister opposite. There was a whole lot of information there that probably wasn't relevant to the bill. I'll keep in mind in relation to debt that, when I was elected in 2013, the country was $300 billion in debt thanks to the Rudd-Gillard-Rudd years. There's this line about it being coalition debt, but that's a fact. I wish you were investing in defence, because defence industry around the country tell me that you're not. We support super. The coalition always supports super. We supported the Paid Parental Leave scheme as well.
The minister opposite says that this strengthens super. How does this strengthen super when you're taxing more? Whether it's 0.5 per cent or not, this is a doubling of taxation. It's not indexed, and it's unrealised capital gains, as I explained before. So how does doubling the rate support super, and shouldn't we be celebrating people that have actually put money away for retirement, because it takes people off welfare? The aged-care pension is there for people that need it. For people who have a small amount of super and are on a part pension, that's good, but why would we attack anyone that is completely self-funded or has put money away? The reality is that, for people on high incomes, particularly in the electorates of some of the independents that have spoken—there are not so many in my electorate, but there are some, I must say—that money won't be going into the system like it was previously. Most people with very, very high incomes in super were at a time when the Howard government was around, and the Keating government was around, and pretty well unlimited amounts of super could be put in.
As I mentioned before, you're now capped at $25,000 last year, and I think this year it's is $27,500. You're capped at what you can put in. Once you've got I think over $500,000, you can't catch up on previous years anyway, so $27,500 thousand a year is not a lot. That's particularly if people are wanting to buy a home and pay off their home, which is harder for young people now, with people studying longer. Now people don't finish studying until they're 25 or 24. They're getting married later, so they're probably enjoying life a little bit, then they're buying a home. By the time they think about salary sacrificing and putting into super, they might be 40 years of age, and by then they might have $500,000, but, under the changes that this parliament has made in the time that I've been here, you can only put in $27,500 a year if you have over 500 grand. If you do get up there and have managed to save, they're doubling the rate.
Let's say you get lucky and actually buy property or something, particularly if you have a self-managed super fund, like you are saying, and that property's value triples. It's not like you have any more cash flow, but this government will make you sell the property to pay the tax because of their unrealised capital gains. That is wrong. The minister can hardly stand up here with a straight face and say that the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill is strengthening super, because it's not. It's not strengthening super, and it's not better targeted. It's targeted at people that they think won't vote for them and will vote teal, Liberal or National. That's the reality. What we should be doing as parliamentarians is looking after all Australians, being honest and keeping our word. If the Prime Minister says before the election there will be no changes to super, how can they come in here with a straight face and make all these changes, particularly around unrealised capital gains, that have never been done before in this country? Even the Greens might support this one. I don't know. Maybe they won't; maybe I'm going a bit too far. It might be a long bow. But the reality is that this is wrong, and it doesn't matter how much the minister gets up. It's not the right thing to do. You weren't honest with the Australian people before the last election, and we're going to put it on record.
Milton Dick
The question before the House is that the opposition amendments moved by the honourable member for Petrie be agreed to.
Summary
Date and time: 3:29 PM on 2024-10-09
Allegra Spender's vote: Aye
Total number of "aye" votes: 59
Total number of "no" votes: 76
Total number of abstentions: 16
Related bill: Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023
Adapted from information made available by theyvoteforyou.org.au