Kate Chaney

Under standing order 143, I move:

That Electoral Legislation Amendment (Electoral Reform) Bill 2024 and the Electoral Legislation Amendment (Electoral Communications) Bill 2024 be referred to the Joint Standing Committee on Electoral Reform for consideration and an advisory report by 3 March 2025.

Karen Andrews

Is the motion seconded?

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Milton Dick

The question before the House is that the amendment moved by the honourable member for Farrer be agreed to.

Rebekha Sharkie

by leave—I move amendments (1) and (2) on the sheet revised 4 November 2024, as circulated in my name together:

(1) Clause 600, page 540 (line 25), omit "31 January 2029", substitute "the third anniversary of the commencement of this Act".

(2) Clause 600, page 540 (line 29), omit "no later than 31 March 2030", substitute "within 15 sitting days of that House after the report is given to the Minister".

Providers will newly be able to charge a maximum refundable deposit for residential aged care of $750,000 indexed over time, up from $550,000, without seeking separate regulatory approval. Depending on when each person enters aged care, a couple could be required to pay deposits of up to $1.5 million between them, as well as significant ongoing fees for each person.

I won't detain the House for too long, but I would just like it to make it clear that this will have profound impacts on people's lives. My constituent, Betty, whose husband is living with dementia has written to me. She said: 'Many people have mentioned that my husband should be in a nursing home, and I realise that this will be necessary, but I cope as long as I can. My concern is that the ridiculously high entrance cost proposed will force carers, many women like me, to struggle on as a carer at home, largely invisible. To me, this is a feminist argument—a carer role for children and then for aged relatives, with a token reward. I've been saving hard to have the nursing home upfront fee, but there's no way I could save $750,000. This is a ridiculously high amount. I don't have to pay, apart from private insurance, when he is in hospital, as he is ill. I can't see a difference, to be honest. It is not a universal service that we will all use when we are deemed old. It is for those who need specialist care. It's not a hotel. Comparisons of that with being the normal cost of living is highly offensive. I also wonder if I should place him in a nursing home earlier rather than later, before July next year, which is very soon, as soon as he comes under the new rules—a cruel decision to have to make.'

I note that if Betty and her husband were able to save the $750,000, which is what it potentially could be—this will no doubt, I think, become the default minimum refundable deposit—it will be expended on her husband's refundable deposit. This will likely leave Betty with few savings should she later require high-level care, and I suspect, as Betty has said to my office, that this burden will be borne predominantly by women. I think this is very true.

Over a five-year period, at a conservative six per cent rate, a provider of residential aged care will earn $253,669 in compound interest on the refundable deposit of $750,000, and providers will newly be permitted to retain two per cent of that refundable deposit. That's up to $75,000. So, as well as the compound interest, we're looking at a contribution of potentially $328,000. The parliament is being asked to provide a huge windfall for operators on an understanding that the additional capital will be spent and maintained on improving facilities, but it's not exactly clarified exactly how the government intends to monitor that. What we need to make sure is that it's not spent on Lamborghinis or Birkin bags—and we have seen media reports of that—and that it's actually spent on improving facilities. That is why I am moving these amendments. I commend these amendments to the House.

Anika Wells

I thank the member for Mayo for her genuine and ongoing advocacy for older Australians, particularly in the electorate of Mayo. I confirm that the government supports the amendment with respect to the act review. This bill will deliver once-in-a-generation reform that will have a profound impact on the lives of older Australians and their families and carers, aged-care workers and providers. We agree it's important that the review into the operation of the act is brought forward to ensure that it is delivering on its intended purpose, to create a forward-looking aged-care system that upholds the rights of older Australians receiving aged-care services.

Aside from the member for Mayo, who has worked tirelessly in this space for many, many years, I also recognise the stakeholders who have advocated for this amendment in particular, including National Seniors Australia, the Older Persons Advocacy Network, Council on the Ageing, Dementia Australia, Carers Australia, Catholic Health Australia, Australian College of Nursing and Wongaburra, an aged-care provider in Beaudesert in the electorate of Wright. I note this was also a recommendation put by the opposition in the community affairs committee report on the bill.

Question negatived.

Rebekha Sharkie

by leave—I move amendments (3) and (4) on the sheet revised 4 November 2024, as circulated in my name, together:

(3) Clause 601, page 541 (line 3), omit "fifth", substitute "third".

(4) Clause 601, page 541 (after line 4), after subclause (1), insert:

(1A) Without limiting subsection the matters to be covered by the review, the review must:

(a) have regard to the objects of the Act; and

(b) consider the following matters:

(i) the operation of the Statement of Rights and the Statement of Principles;

(ii) the effectiveness of the Act in delivering the objects, including enabling individuals to exercise choice and control;

(iii) the effectiveness of the Act in embedding the role of supporters in the aged care system;

(iv) the extent of unmet demand for funded aged care services in a home or community setting;

(v) the duration of waiting periods from application to service commencement for funded aged care services in a home or community setting;

(vi) the effectiveness of the governance (under Chapter 5) and regulatory mechanisms (under Chapter 6) of the aged care system in overseeing and ensuring the quality of funded aged care services;

(vii) the effectiveness of the Act in ensuring equitable access to funded aged care services for individuals, regardless of their location, background and life experience;

(viii) the effect of Part 3 of Chapter 4 (about individual fees and contributions) on the sustainability of the aged care system, service usage and outcomes for individuals accessing funded aged care services;

(ix) the use of refundable accommodation deposits and daily accommodation payments;

(x) the proportion of aged care accommodation payments being charged at the maximum accommodation payment amounts;

(xi) the proportion of registered providers who charge an accommodation payment approved under section 290 (that is, an approved accommodation payment that is higher than the maximum accommodation payment amount);

(xii) the quality and timeliness of data published about the performance of the aged care system.

This relates to clause 601, the statutory review. I have heard from key stakeholders, including National Seniors and Council of the Ageing, that the planned mechanisms for statutory review of the act after five years of operation are insufficient and too distant into the future. I've therefore moved amendments (3) and (4) in my name to require review of the operation of the act within six months after the third anniversary of the commencement of the act, with a report to the parliament to be tabled within 15 sitting days of the report being given to the minister.

I've also consulted with Council of the Ageing, COTA, regarding the inclusion of proposed terms of reference for the act's statutory review being an inclusive rather than exclusive list of matters required to be considered on review based on stakeholder feedback. They include the effectiveness of the act in delivering objects, including choice and control, for individuals; receiving funding for aged-care services; whether the act has been successful in embedding rights, principles and supported decision-making as the foundations of aged care delivered in Australia; whether the level of support and greater investment in support at home has improved access and reduced waiting times for individuals to receive care; the effectiveness of arrangements for regulation and governance of aged care; and the impact on ensuring the quality of funded aged-care services.

In the context of once-in-a-generation reform in the aged-care system coming out of a once-in-a-generation—we hope—royal commission, with huge impacts on older Australians' rights and the quality and cost of care, the importance cannot be overemphasised of building a meaningful statutory review to ensure that the effectiveness of the scheme is rigorously assessed so that improvements can be identified and promptly implemented when needed. I commend these amendments to the House.

Anika Wells

I thank the member for Mayo for her ongoing advocacy. I note, with respect to RAD reviews, we have committed to a phase-out of refundable accommodation deposits by 2035, following a review of sector readiness for this transition, which will be in 2029-30. The Aged Care Taskforce, which brought together aged-care stakeholders, experts and providers, found that time is needed to manage the transition away from refundable accommodation deposits and that a review should be undertaken in 2030. A change in the timeframe as recommended by the taskforce was not a key issue identified in the Senate Community Affairs Legislation Committee report on the Aged Care Bill.

With respect to the act review, we do agree it's important. We think the member for Mayo is correct on this. We think the review into the operation of the act can be brought forward to ensure it is delivering on its intended purpose to create a forward-looking aged-care system that will uphold the rights of older Australians receiving aged-care services. It was also a recommendation put forward by the opposition in the community affairs committee report on the bill. I thank the member for Mayo.

Question agreed to.

Sophie Scamps

by leave—I move amendments (1) and (2) as circulated in my name together:

(1) Clause 5, page 3 (line 3), after "Cultural Rights", insert ", the International Covenant on Civil and Political Rights".

(2) Clause 7, page 14 (after line 2), after the definition of cost, insert:

Covenant on Civil and Political Rights means the International Covenant on Civil and Political Rights done at New York on 16 December 1966.

Note: The Covenant is in Australian Treaty Series 1980 No. 23 ([1980] ATS 23) and could in 2024 be viewed in the Australian Treaties Library on 7 the AustLII website (http://www.austlii.edu.au).

The amendments I am introducing today go to the objects of the Aged Care Bill 2024. Section 15AA of the Acts Interpretation Act provides that statutes should be interpreted in accordance with their objects and that all other provisions of the bill are to be read as far as is possible as being designed to carry out these objects.

There can be no understating, therefore, of the importance of getting the objects provisions in the legislation right. Currently the bill's objects clause states, among other things, the objects are to:

give effect to Australia's obligations under the International Covenant on Economic, Social and Cultural Rights—

the ICESCR—

and the Convention on the Rights of Persons with Disabilities—

the CRPD. However, there is no reference in the objects to the International Covenant on Civil and Political Rights. The explanatory memorandum to the bill states:

This is because the objects specify only those conventions that the Bill upholds in reference to the External Affairs power, but it does not mean that the Bill does not endeavour to uphold these other international conventions.

Basically, the bill only includes those international human rights treaties that the minister considers relevant to the constitutional authority of the Aged Care Bill.

The Law Council takes a different view. In its submission on the bill's exposure draft, the Law Council queried the department's assessment that only the ICESCR and the CRPD are relevant to provide the constitutional foundation for the Aged Care Bill and to manage associated legal risk. The Law Council went on to say that various provisions in the bill may carry the risk that they do not have a proper constitutional foundation because there may not be a proper foundation for them in the Convention on the Rights of Persons with Disabilities. These include the right to be free from all forms of violence, neglect or abuse and the right to be treated with dignity. Only half of Australians over the age of 65 are living with a disability. To rely only on a treaty relating to disability to give the bill its constitutional foundation is a risk.

The International Covenant on Civil and Political Rights, on the other hand, applies to all persons and will eliminate this risk if incorporated into the bill. After all, the report of the aged care royal commission described aged care in Australia as 'a sad and shocking system that diminishes Australia as a nation' and said it tells a 'shocking tale of neglect'. It was the royal commission report that shocked the nation. The ICCPR is a foundational international human rights treaty, and it needs to be incorporated into what is, after all, a bill which seeks to establish a rights based framework for the older Australian.

Since publishing this amendment yesterday I've been contacted by Australia's Council on the Ageing, COTA Australia, expressing their appreciation for it. In their view, it will bolster the scope of powers the act sits upon. If we do truly want a bill that is based firmly on the rights of all older Australians, I ask for all my colleagues in this House to support this simple yet commonsense amendment.

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Milton Dick

The question is that the amendments moved by the honourable member for Wannon be agreed to.

Milton Dick

The question before the House is that the amendment moved by the honourable member for Petrie be agreed to.

Milton Dick

The question is that the amendment moved by the honourable member for Fairfax be agreed to.

Milton Dick

In accordance with standing order 133, I shall now proceed to put the question on amendments moved by the honourable member for Kooyong to the Universities Accord (Student Support and Other Measures) Bill 2024, on which a division was called for and deferred in accordance with the standing order. No further debate is allowed. The question is that amendments (1) to (6) be agreed to.

Milton Dick

The question before the House is: the amendment moved by the honourable member for Bradfield be agreed to.

Allegra Spender

by leave—I move amendments (1) to (4) on the sheet revised 28 May 2024, as circulated in my name, together:

(1) Page 3 (after line 8), after clause 3, insert:

4 Review of Schedule 1

(1) The Minister must cause an independent review of Schedule 1 to be conducted as soon as practicable after this Act receives the Royal Assent.

(2) The review must include a review of the impact, or potential impact, of Schedule 1 on the startup and high-growth sector.

(3) The persons who conduct the review must:

(a) consult with the public in conducting the review; and

(b) give the Minister a written report of the review in sufficient time to enable the Minister to comply with subsection (4).

(4) The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament before 1 July 2025.

(2) Schedule 1, item 15, page 7 (line 11), before "The object", insert "(1)".

(3) Schedule 1, item 15, page 7 (after line 14), at the end of section 296-5, add:

(2) The Parliament intends that the approach in this Division of taxing unrealised gains is not to be used in the design or policy considerations of future amendments of this Act.

(4) Schedule 1, item 15, page 21 (after line 10), at the end of section 296-205, add:

Deferring when tax is payable

(3) Despite subsection (1), your *assessed Division 296 tax for the income year is due and payable at the end of the later day applying under the scheme mentioned in subsection (4) if, under the scheme:

(a) you choose for the scheme to apply for the income year; and

(b) you satisfy the conditions for the scheme to apply for the income year.

(4) The regulations must prescribe a scheme that allows entities to defer their *assessed Division 296 tax for an income year if the conditions provided for in the scheme are met.

(5) Without limiting subsection (4), the scheme must provide for:

(a) the length of the deferral, which must be for at least 5 years; and

(b) how an entity may choose for the scheme to apply for an income year; and

(c) any conditions that must be met for the scheme to so apply; and

(d) whether tax payable under the scheme can be paid in instalments; and

(e) whether a separate choice needs to be made, and conditions need to be met again, for each income year that an entity wishes the scheme to apply.

I am sympathetic to the government's objective of considering the taxation treatment of super and particularly about balancing the taxation of younger and older Australians more equitably. I note with real concern the increasing burden that the taxation system in its current form is placing on younger Australians. For example, I note that the share of income tax paid by older Australians has gone from 27 per cent to 17 per cent in one generation. I note that young Australians are not getting ahead in the way that previous generations did. I note that from 2004 to 2016 the average wealth of households of Australians over the age of 65 grew by 50 per cent while the average wealth of households under the age of 35 did not move. This change in the distribution of wealth and opportunity between generations does not bode well for our country and does not bode well for the opportunities that every single one of us wants to offer our children.

So I do think we need to consider the tax system more broadly, and, as I think many in this House know, I have long advocated for tax reform, including considering the tax system within the superannuation system. However, I am deeply opposed to the taxation of unrealised gains, which is why I'm putting forward a number of amendments. While I'm open to considering taxing large balances of super, I think the taxation of unrealised gains is extremely problematic. I'm also concerned that this increase in tax that the government is proposing is not being used to actually reduce tax burden, which is what it should be doing—reducing tax burden on young workers, because that is where that rebalancing should be.

Let me explain some of the concerns I have in relation to the taxation of unrealised gains. The first is on principle, which is that this is not money that anybody has. So, why the government should tax it is beyond me. As a principle of taxation, it is extremely problematic. I'm also concerned about how this plays out in practice, and I'm going to focus particularly on the venture and technology sector, which is a big part of my community and a sector that I'm really concerned about. Australia has lower investment in venture than other countries. We have about a third of the rate of investment in young, growing firms—venture capital—than the US, and about half that of the UK. We have a productivity hole. We know we need to grow it, and we know that young, growing firms drive productivity in this country.

So, we should be doing everything we can to support these companies. My biggest concern with this bill is that, according to the Tech Council, around 25 per cent of money that goes into venture comes out of self-managed super funds. Now, venture is volatile, and it is illiquid. Therefore, if we are going to be taxing unrealised gains on venture firms, which are both volatile and illiquid, there is a real danger that people in self-managed super funds are just going to move that money out of venture and into other areas—maybe the listed index. They are going to miss out from a returns point of view, and we as a country will also miss out, from the point of view of not having that investment in venture firms that is critical to future growth and productivity. That is my major concern with this issue and, frankly, I have not seen evidence that the government has engaged properly with the venture sector and with the technology sector to understand the impact of this legislation on those young and growing firms.

My amendments cover three elements of this. Firstly, I'm recognising that if you make an investment there's a very short period in which you're meant to pay this tax on unrealised gains. I've already noted that for venture, but it is also the case for land and for farms and businesses. You can't sell them on a dime. Therefore, one of my amendments is to ensure that a longer period is allowed for payment of this tax—over five years. That is a minimum requirement and I think a reasonable one.

Kylea Tink

I rise to speak in support of the amendments moved by the member for Wentworth, and I want to thank her and her team for doing the work to try to find a way through what is a truly concerning, unprecedented move by this government. To be clear, I believe that the intent of the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 warrants investigation. But to see the taxation of unrealised gains included in this legislation should send a shiver down the spine of not only every Australian but potentially every global citizen, because this is globally unprecedented. Nowhere else in the world do they tax unrealised gains.

What are the implications of this? It means, particularly for people in the rural sector and the small-business sector, that if they own assets that are fluctuating within their superannuation balance and one year the value of those assets goes up then, even though that will not will be in true cash terms, this government will have the right to approach those people and have them pay cash to the ATO, and the ATO doesn't take an IOU note.

In the subsequent year—let's say it's a farm, and you hit drought and your land price drops, and you fall back under the $3 million mark—you don't get a rebate from the government for the money you paid the previous year. But you have lost cash somewhere. So, from the minute this legislation was tabled, this really egregious change in taxation policy in this country was flagged with alarm by many key stakeholders. I have had lots of conversations with the member for Wentworth, the assistant minister, and other members of the crossbench who have tried to appeal to the government to please drop this unprecedented reform. Yet—it's extraordinary—the government hasn't been prepared to negotiate in this space and to recognise not only the potentially immediate damage to our superannuation system but also the potential damage to Australians' confidence, when they hold assets, that the government isn't going to adopt this as a standard practice across everything we hold.

People have asked me, 'If this is now included in super, what does that mean for my home in the future?' So, I would say to the minister, I think the member for Wentworth and her team have done an excellent job in providing you with a way to frame this and to give Australians greater certainty. While I would prefer to see this measure completely removed, this is what's being offered, in the interest of compromise, and I commend it to the minister and his team. I'll be interested to see why the minister says the government won't take it up.

Allegra Spender

In continuation of my previous remarks, I'd like to thank the member for North Sydney for her support of these amendments. As I described earlier, the amendments that I have put forward are, firstly, around allowing a greater time period in which to pay, given that people are being taxed on unrealised gains. Because these gains are unrealised, they relate to assets that have not been sold, or realised, and people may not have the cash to pay this. We should not be forcing people, or pushing people, to be paying tax on income that they haven't earned in a time period that is unreasonable—currently at 84 days.

My second amendment speaks to my concern about the impact on the venture sector and whether the government has adequately assessed that. I have put in my amendment that a review should be done on the impact of this sort of change on the venture and technology sector in particular.

Finally, I'm also calling for this legislation to acknowledge, and to try and give some confidence to, the people the member for North Sydney identified, by saying that this is not going to set a precedent for taxing unrealised gains in other parts of the economy. Frankly, these aren't the amendments I would like to pass. There are other amendments I would have loved to pass. Unfortunately, because this is an appropriation bill, I am unable to put forward the amendments that I would have put forward, but I do believe they should be considered.

Frankly, all this talk on unrealised gains is for superannuants who can calculate their actual earnings to pay their taxation on actual earnings. From my understanding, that would capture 80 per cent of the people that this bill is meant to address. So 80 per cent of the 80,000 people who would initially be affected by this would be able to pay tax on their actual earnings, and the 20 per cent who are in major funds would have to pay tax on unrealised gains. Then, it would be up to the funds to provide the right tax information so that, in the future, people perhaps would not have to pay tax on unrealised gains. I think that is an appropriate opportunity for the government to look at. From my understanding, just because APRA funds can't calculate gains that are realised funds versus unrealised funds, why should self-managed super funds be penalised for the technical incapacity of the other funds? I don't think that's a fair challenge. This change would make a huge difference to the self-managed super funds who are, by and large, the larger holders of these sorts of assets and the larger investors, particularly in the venture sector.

Failing that opportunity, there should've at least been a clawback mechanism to acknowledge that this is a proxy measure and that people may be overpaying their tax liability, because, as we all know, the value of assets goes up and down, particularly if you're in venture assets, where, for instance, the asset might be worth $50,000 one year and have a valuation of $2 million the next year. By the third year, it might be worth zero. A clawback mechanism would ensure that if you did have to pay tax at a valuation that you would never be able to realise then you could get the tax back. Again, that is a precedent we have in many other parts of our tax system, and it should be in this part of the tax system as well. I think these are some of the things that should have been in the legislation. These were alternative options for the government had it wanted to pursue what is a reasonable goal and do it in a way that is not so detrimental and not so distorting of our tax system.

I would like to ask the government a couple of key questions, via the minister. The first question to the minister is really around why the government chose to exclude people who can calculate their actual earnings—their realised gains versus their unrealised gains. Why did you choose to tax everybody on unrealised gains, when some people can actually calculate their realised gains?

The second question I really want to get an answer to is: what has the government done to understand the impact on the technology and venture sector, which is such an important part of our productivity and the economy. Those are two questions I would appreciate the minister's advice on.

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