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.

Long debate text truncated.

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.

Kylea Tink

by leave—I move amendments (1) to (3) as circulated in my name together:

(1) Schedule 1, item 15, page 10 (after line 17), after section 296-40, insert:

296-42 Large superannuation balance threshold

The large superannuation balance threshold is:

(a) for the 2025-26 financial year—$3 million; or

(b) for a later financial year—the amount worked out by indexing annually the amount mentioned in paragraph (a).

Note 1: Subdivision 960-M shows how to index amounts. However, annual indexation does not necessarily increase the amount of the cap (see section 960-285).

Note 2: The rounding amount for indexation is $100,000 (see subsection 960-285(7)).

(2) Schedule 1, page 28 (after line 10), after item 17, insert:

17A Section 960-265 (after table item 10A)

Insert:

17B Paragraph 960-285(3)(a)

After "paragraph (b)", insert "or (c)".

17C At the end of subsection 960-285(3)

Add:

; or (c) if the amount is mentioned in item 10B in section 960-265—the amount for the 2025-2026 financial year.

17D Subsection 960-285(5) (paragraph (a) of the definition of base quarter )

After "paragraph (b)", insert "or (c)".

17E Subsection 960-285(5) (at the end of the definition of base quarter )

Add:

; or (c) if the amount is mentioned in item 10B in section 960-265—the quarter ending on 31 December 2024.

17F Subsection 960-285(7) (cell at table item 3, column 1)

Repeal the cell, substitute:

(3) Schedule 1, item 18, page 29 (line 27), omit "means $3 million", substitute "has the meaning given by section 296-42".

The amendments I'm moving today would ensure that the large superannuation balance threshold is indexed annually, in line with the consumer price index. As it stands, the $3 million large superannuation balance threshold, established in the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill of 2023, is not indexed, leaving the decision of when and if to lift the threshold to a future government at some unknown time. This is simply not consistent with sound long-term superannuation taxation policy. It does not provide sufficient certainty to those with money in super or the super industry, and, if left unaddressed, it will create intergenerational inequities.

From the outset, experts and commentators have been almost universally critical of this lack of indexation. Indeed, during the consultation process on this legislation, AustralianSuper wrote:

Indexation of the threshold at which the measure applies would lead to greater certainty and promote stability and confidence in the system.

The National Farmers Federation said:

Given the long-term nature of superannuation and rising inflation, the $3 million value will increasingly capture a greater share of Australian farming assets. As such, the NFF recommends indexing the cap to inflation or the Consumer Price Index.

The Tax Institute, the Business Council of Australia and the Institute of Financial Professionals Australia, just to name a few, also all recommended that the proposed $3 million threshold be indexed.

Closer to home, when I talk to people in my community about this bill, even those who wholeheartedly support the intent of it, they see the lack of indexation on large super balances as absurd. Without indexation, the threshold does not currently account for inflation, and, therefore, reform most certainly will impact more and more ordinary Australians over time.

The Treasurer has said that from 2025, the concessional tax rate applied to future earnings for balances above $3 million is expected to apply to around 80,000 people. However, alternate modelling by the Financial Services Council puts that figure closer to half a million Australians if the cap remains unindexed. The number of people impacted in their lifetime would include more than 200,000 Australians under the age of 30.

The lack of indexation is out of step with current accepted tax principles, with most other elements of our super system being indexed, from contribution limits to the transfer balance cap and lump-sum benefits. Leaving the cap at $3 million without indexing it will mean people in my generation will have an entirely different and relatively higher threshold to that of my children, with the real value of the threshold likely falling to $2 million, due to inflation, by around 2040. Take the example of a current 30-year-old. By the time they retire at the age of 65, the real value of the cap will have fallen to $1.3 million, assuming inflation of just 2½ per cent. If inflation is higher, say four per cent, the real value would actually be $760,000—quite the departure from a $3 million cap.

Ultimately, my electorate of North Sydney and many individuals and stakeholders across this country broadly support the intent and principle of this bill—that is, to rein back generous tax breaks for super balances that are beyond what is currently deemed necessary to fund a comfortable retirement. However, in its current form, and without indexation, this legislation leaves many deeply concerned. The large superannuation balance threshold should be indexed to keep pace with inflation, to avoid bracket creep and to ensure greater intergenerational fairness. This amendment does just that. It is sensible, it is simple, it is practical and it is in line with current taxation law. I commend the amendment to the government.

Stephen Jones

I thank the member for North Sydney for her ongoing and good-faith engagement on this issue and on a range of other issues around the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023. I know that she's bringing the propositions that she's bringing in good faith and that they reflect representations that have been made to her by members of her community. We won't be supporting the amendments, and I'd just like to point out, in very brief terms, why.

Firstly, a matter of context: the average balance on retirement today is somewhere between $150,000 and $200,000. That's a long way south of the $3 million threshold that has been set in the bill before the House. It's for that reason that we're confident that less than 0.5 per cent of all fund members will be caught by the new provision—about 80,000 people, on introduction—and we don't see any significant shift in that in the near term.

It is of course the norm within the taxation system that we do not index tax thresholds. For example, we don't index personal income tax thresholds. Indeed, the previous government didn't index the division 293 tax threshold when it introduced those changes about a decade ago. It is of course open to a future government to decide to lift the threshold, and a future government would make that decision in the context of all the other fiscal pressures that are bearing upon a government at that point in time.

It's a modest change. It's a change that won't impact more than 99.5 per cent of all taxpayers. And let us not forget the objective of this. It's about ensuring that the taxation arrangements in relation to superannuation—which are generous—are sustainable over time. Even at the higher threshold of 30 per cent, for that portion of a fund over $3 million, that is still an incredibly concessional rate of taxation. So, we think the bill strikes the right balance in ensuring that people are encouraged to save for their retirement. It puts no cap on the amount of money people can have within their superannuation account. If they want to have more than $3 million in their superannuation they can do so, but there will be a higher rate of taxation on that part of the balance over $3 million—still a very generous tax concession for that portion of the fund balance over $3 million. I fully expect that the very small number of Australians who are caught by this will continue to decide to invest their money through the superannuation system because of those generous taxation concessions.

For these reasons, while I accept that the arguments are put in good faith by the member for North Sydney, the government won't be accepting the amendments.

Kylea Tink

Thank you for your commentary, Minister. I would like to put to you that this has broadly been advocated for across a number of organisations. I take what you're saying—that it's not standard practice for taxation brackets to be indexed—but it is certainly true that in most other elements of the super law they are indexed, whether it's what you can take out or what you can put in.

I think the thing that is very concerning to many people is that the potential impact here is for those who have self-managed super funds, particularly farmers and small-business owners who may have assets other than cash in their self-managed super fund. What assurances can you give to people who have taken the initiative and set up a self-managed super fund that this reform is not directly targeted at them, trying to force them back into commercial superannuation systems?

Stephen Jones

I thank the member for her question and I stand by the comments I've made in relation to the norms within the taxation system at large. The rules are sector neutral. They give no preference to whether a fund is a regulated superannuation entity or is regulated by the tax office, being a self-managed superannuation fund. I fully expect that following the passage of these laws people will make decisions on whether they control their own superannuation investments through a self-managed superannuation fund or they go through a regulated superannuation entity based on their own time, need, expertise and personal circumstances. From the government's point of view, this is sector neutral and it is absolutely driven by ensuring that we have a sustainable set of taxation concession arrangements in the superannuation systems. And I repeat: even if somebody has more than $3 million within their superannuation fund, the high rate of taxation on that proportion of their superannuation savings over $3 million will still be incredibly concessionally taxed.

Long debate text truncated.

Clare O'Neil

I ask leave of the House to present a bill for an act to provide for Housing Australia to enter into shared equity arrangements on behalf of the Commonwealth to improve housing outcomes for Australians and for other purposes.

Leave not granted.

I move:

That so much of the standing and sessional orders be suspended as would prevent a Minister introducing a bill without notice.

Milton Dick

The question before the House is that the motion be agreed to.

Anthony Albanese

I move:

That the House of Representatives:

(1) reiterates its unequivocal condemnation of Hamas' terror attacks on Israel which took place on 7 October 2023, in which more than 1,200 innocent Israelis were killed, the largest loss of Jewish life on any single day since the Holocaust;

(2) recognises that hundreds more innocent people were subjected to brutality and violence on that day;

(3) calls for the immediate and unconditional release of all the remaining hostages;

(4) condemns the murder of hostages and the inhumane conditions and violence, including sexual violence, that hostages have experienced;

(5) mourns with all impacted by these heinous acts;

(6) condemns antisemitism in all its forms and stands with Jewish Australians who have felt the cold shadows of antisemitism reaching into the present day;

(7) reiterates Australia's consistent positions to call for the protection of civilian lives and adherence to international law;

(8) mourns the death of all innocent civilians, recognising the number of Palestinian civilians killed in Gaza and the catastrophic humanitarian situation;

(9) supports ongoing international efforts to provide humanitarian assistance in Gaza and Lebanon;

(10) calls for Iran to cease its destabilising actions including through terrorist organisations, the Houthis, Hezbollah and Hamas, condemns Iran's attacks on Israel and recognises Israel's right to defend itself against these attacks;

(11) stresses the need to break the cycle of violence and supports international efforts to deescalate for a ceasefire in Gaza and in Lebanon and for lasting peace and security for Israeli, Palestinian, Lebanese and all people in the region;

(12) affirms its support for a two-state solution, a Palestinian State alongside Israel, so that Israelis and Palestinians can live securely within internationally recognised borders, as the only option to ensuring a just and enduring peace;

(13) recognises the conflict is deeply distressing for many in the Australian community;

(14) condemns all acts of hatred, division or violence, affirming that they have no place in Australia; and

(15) reaffirms:

(a) that symbols of terror and discord are unwelcome in Australia and undermine our nation's peace and security;

(b) the undermining social cohesion and unity by stoking fear and division risks Australia's domestic security; and

(c) the responsibility of each Australian to safeguard the harmony and unity that define our diverse society, especially in times of adversity.

Yesterday, on the first anniversary of the October 7 attacks in Israel, we paused to reflect on the horrific terrorist atrocities that reverberated across the world. As we did last October, this parliament comes together again to unequivocally condemn Hamas's actions on that day. On October 7 Hamas sought only to kill and to terrify. They perpetrated their crimes without mercy and without discrimination. Men, women and children were subjected to acts of degradation and humiliation that, a year on, remain beyond comprehension, yet Hamas made this waking nightmare a reality. They chose a holy day on the Jewish calendar to target young Israelis at a music festival, to hunt down men, women and children in their homes and to prey on families—on children and on parents trying to protect their children in what often proved to be their desperate final act.

A year on from that day, when death emerged out of the sunshine, we reflect on all that happened and all the devastation that has followed. We think of the brutality and the cruelty that was inflicted on so many, with such cold calculation. We think of all whose lives and futures were stolen from them that day, as they tried to save themselves and their loved ones, and of all who have had them stolen since. We think of those whose lives remain suspended in the fear and isolation of captivity. And we think of those whose own lives and hearts are so intimately connected with the hostages who were kidnapped that day through the bonds of either blood or the embrace of friendship and community. This has been a year of pain, of loss and of grief.

Last night, I attended the vigil in Moorabbin, Melbourne, where I had the sombre privilege of meeting with a relative of Galit Carbone, the Australian woman who was among those killed on that fateful day. I expressed my condolences and those of our nation. We also heard firsthand the experience of those with relatives and friends who were killed by Hamas on that day, who were killed after being taken hostage or who remain hostages. For so many, this past year must have felt like a cruel eternity. For the friends and families I spoke to prior to the event last night, in their torment of not knowing the fate of a loved one who's been taken hostage or, indeed, having the terrible truth confirmed, October 7 will always be a day of pain.

As we mourn and reflect we also reaffirm a fundamental principle of our shared humanity: that every innocent life matters—every Israeli, every Palestinian, every Lebanese—every single innocent life. It is the terrorists who close their eyes to that powerful, simple truth. It is the terrorists of Hamas who are not only enemies of Israel; they are an enemy of the Palestinian people as well. The number of civilians who have lost their lives over the past year is a tragedy of horrific proportions. An estimated 40,000 Palestinians have been killed. The humanitarian situation in Gaza is devastating.

Our government has consistently and repeatedly called for a ceasefire, for the release of all hostages and for the protection of all civilians. We remain committed to a two-state solution as the path to an enduring peace: two states, Israel and Palestine, living peacefully side by side with prosperity and security for their people—a position that has been bipartisan in this parliament for a long period of time. There can be no possibility of a just future without that. Let's be very clear. Australia's position is consistent with that of other democratic countries. I've issued multiple statements with the Prime Ministers of Canada and New Zealand. We know that it is only through diplomatic efforts that this cycle of conflict and bloodshed can be broken. Escalation denies diplomacy any chance of working. On 26 September Australia joined with 11 other nations, including the US, Canada, France, Germany, the UK and Japan, to call for de-escalation. We agree with every word in the G7 statement of this week:

A dangerous cycle of attacks and retaliation risks fuelling uncontrollable escalation in the Middle East, which is in no one's interest. Therefore, we call on all regional players to act responsibly and with restraint. We encourage all parties to engage constructively to de-escalate the current tensions. International humanitarian law must be respected.

…   …   …

We also reiterate our call for an immediate ceasefire in Gaza, the unconditional release of all hostages, a significant and sustained increase in the flow of humanitarian assistance, and an end to the conflict. We fully endorse the efforts by the US, Qatar and Egypt to reach such a comprehensive deal, in line with United Nations Security Council resolution 2735. The situation in Gaza is catastrophic, and tens of thousands of innocent lives have been lost. We reiterate the absolute need for the civilian population to be protected and that there must be full, rapid, safe and unhindered humanitarian access, as a matter of absolute priority.

In his statement, marking the first anniversary of October 7, President Joe Biden said this:

We will not stop working to achieve a ceasefire deal in Gaza that brings the hostages home, allows for a surge in humanitarian aid to ease the suffering on the ground, assures Israel's security, and ends this war. Israelis and Palestinians alike deserve to live in security, dignity and peace. We also continue to believe that a diplomatic solution across the Israel-Lebanon border region is the only path to restore lasting calm and allow residents on both sides to return safely to their homes.

A year on from October 7, Israelis and people across the world are mourning those who were robbed of their lives and futures and waiting anxiously for news of the hostages who remain in captivity. Palestinians are mourning the lives taken from them in the continuing aftermath. So much has been lost; so many loved ones buried. We join all of them in their grief. Tragically, we are seeing the situation worsening. Since late last year, we and others have been expressing this concern about the real risk of the conflict spreading. We are now seeing that come to pass. We unequivocally condemn the actions of Iran and Hezbollah. Iran must cease its destabilising actions, including through its terrorist proxies. Amid their attacks on Israel, Australia steadfastly maintains support for Israel's right to defend itself. We always have, and we always will. We repeat our call for all sides to observe international law.

It is important to recognise that the loss and grief of this past year have been deeply felt here in Australia. Sorrow knows no boundaries. It recognises no differences. Since the atrocities of October 7, Jewish Australians have felt the shadows of the past creeping into the present. We condemn the poison of antisemitism in whatever form it takes. This is a pain the Jewish people should never have had to endure again. The Holocaust is not softened by the passing of time. It doesn't recede into history. It does not offer one the slender comfort of distance.

Our Jewish-Australian community is made up of Holocaust survivors and their children and grandchildren, including, of course, our Attorney-General here in this parliament. The branches of their family trees are heavy with loss and suffering and with acts of survival in the face of overwhelming odds. It is shocking and wrong that in 2024 Jewish people are having to draw on their courage and their resilience again. I want to repeat the message that I have given to all Jewish Australians since the outset: You are not alone; your fellow Australians stand with you. Our social cohesion has been built over the course of generations by people of all backgrounds and from every faith and tradition. All of us take pride in it and all of us must work together to protect it.

This parliament gives all of us a national platform and a national duty to send a message to every Australian: You have the right to be proud of you are; the right to feel safe in your community, whether you wear a yarmulke or a hijab; the right to feel free to live the truth of your faith; and the mere act of your children walking freely to school should just be a regular part of daily life, unremarkable in its happiness. Every time parliament rises and we return to our electorates across this great continent of ours, we can travel along the streets and see synagogues. We can see mosques. We can see churches and temples. As a country and as a people, we're big enough to contain them all, and we're enriched by them all.

Each and every one of us has a responsibility to prevent conflict in the Middle East from being used as a platform for prejudice at home. I want to be clear to anyone who thinks about taking a Hamas or Hezbollah flag to a protest: these symbols are not acceptable. They are symbols of terror. They are illegal, and they will not be tolerated here. Hamas and Hezbollah serve no cause but terror. They have shown themselves to be the enemy of the very people they purport to represent, and we unequivocally condemn any indication of support for such organisations.

Today, as we remember those who were lost, we stand with all those who wait. We stand with all those who endure loss. We stand with all those who endure hope. Let us stand together as a nation and as a parliament in our shared determination to preserve the harmony that makes this the greatest country in the world, knowing in our shared commitment to a just and lasting peace that the truest act of strength is to protect the innocent. That is the truth we must hold on to—the truth of a shared humanity, the hope that peace is possible and the belief that it belongs to all people. To quote the great Dr Martin Luther King:

Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.

I commend the resolution to the House.

Honourable members: Hear, hear.

And I table this statement from President Joe Biden marking one year since the 7 October attack and the statement from the G7 leaders on recent developments in the Middle East.

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Milton Dick

The question before the House is that the bill be agreed to.

Milton Dick

The question before the House is that the bill be read a second time.

Andrew Wilkie

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

(1) Schedule 1, item 41, page 57 (after line 6), after subsection 24EA(1), insert:

(1A) Without limiting subsection (1), the statement must include recommendations for any sanctions (including parliamentary sanctions) to be imposed on the respondent.

(2) Schedule 1, item 41, page 58 (after line 6), after subsection 24EB(1), insert:

(1A) If the Privileges Committee's decision is not consistent with any recommendations made by the decision-maker or review panel (see subsection 24EA(1A)), the report mentioned in paragraph (1)(b) must:

(a) be made in writing; and

(b) set out the reasons for not following those recommendations; and

(c) be tabled in the House at the time the Committee reports it decision.

I support the Parliamentary Workplace Support Service Amendment (Independent Parliamentary Standards Commission) Bill 2024. It is long overdue and sorely needed. The bill of course responds in part to the recommendations of the Set the standard report, which in turn was the product of the 2021 Independent Review into Commonwealth Parliamentary Workplaces conducted by the Australian Human Rights Commission and headed by former Sex Discrimination Commissioner Kate Jenkins.

As many in the community would remember, the Jenkins review was established with the support of both major parties and the crossbench in March 2021 following a litany of reports about the toxic, unsafe workplace culture in Parliament House, including most notably the allegation by former Liberal staffer Brittany Higgins that she was raped in a ministerial office in 2019. As Commissioner Jenkins noted:

The Commonwealth Parliament sits at the heart of Australia's representative democracy. As one of the country's most prominent workplaces, it should serve as a model for others and be something Australians look to with pride.

In other words, it's imperative that the people who work in this building are safe and respected and feel they can speak up against bad behaviour. Regrettably, however, this has not been the case, which is why the review found that too often this workplace didn't provide a safe environment for many, largely driven by power imbalances, gender inequality and a lack of accountability. Indeed, the actions of some people in this building over many years has made a mockery of this institution and left the community with little trust in what goes on in here. This bill can help address the dreadful situation, because the Independent Parliamentary Standards Commission, the IPSC, promises to operate as a fair, independent, confidential and transparent system to handle complaints and make findings about misconduct and to make recommendations on sanctions for parliamentarians, staff and others who breach codes of conduct.

I obviously welcome this reform. But, frankly, there is one glaring omission, which is what I aim to address with my amendments. Yes, the bill as currently drafted empowers the IPSC to receive complaints, conduct investigations and make findings about whether a breach of the code of conduct has occurred. In less serious cases, the commission can determine and impose a non-parliamentary sanction, such as a written reprimand, a requirement to undertake training or a small fine. This all sounds good. The problem arises in more serious cases where a matter involves a serious offence and the power to impose sanctions is taken from the IPSC and given to the privileges committee. A 'serious offence' is defined as an offence involving assault or sexual assault or any other offence prescribed by the PWSS rules. In these cases, the IPSC would provide its findings to the privileges committee, but it would be up to the privileges committee to impose any sanction, which might include a fine, a suspension or even removal from the committee. This situation flies in the face of the Set the standard recommendation for a fair, independent, confidential and transparent complaints processing mechanism which holds parliamentarians to account for their poor behaviour.

I am on the Standing Committee of Privileges and Members' Interests and I have great respect for my colleagues there. I'm the first to acknowledge that it's a highly respected committee with a reputation for being multipartisan, collegiate and collaborative. However, it's not a given that this collegiality will always exist, nor that the public will always have confidence that it exists, and if trust breaks down, especially between the committee and the community, and the idea takes hold that poor behaviour is not being dealt with by an independent expert body then at best we've failed the so-called pub test and at worst allowed this place to drift into lawless mediocrity.

That's why my amendments would enable the IPSC to include recommendations for any sanctions in its report to the privileges committee. Moreover, should the privileges committee deviate from the recommendations of the IPSC, it must table its reasons for doing so when reporting its decision. Only then could everyone, including the community, be confident that complaints investigation and processing within this workplace are fair, independent, confidential and transparent, as recommended by the Set the standard report.

Importantly, my amendments respond to concerns which have been raised by a number of organisations focused on women's safety, on transparency and on good governance, including Fair Agenda, Transparency International Australia and the Australian Democracy Network. On that note, I thank Fair Agenda in particular for their engagement on this issue and I commend the amendments to the House.

Kylea Tink

I rise in support of the amendments moved by the member for Clark, because I want to take a moment to stop and reflect on where we have gotten to and where we could go further. In the course of the last 24 hours, I've heard a number of people speak about the revolutionary nature of this legislation. I want to echo that, in that this is an incredibly important piece of reform. It's also a piece of reform that has been a long time coming. I would like to preface that by saying I also believe that, if this reform weren't delivered in this 47th parliament, there would be mass outrage across the Australian community. If the 2022 election told us nothing else, it told us that Australians are tired of seeing politicians throw abuse at each other across this chamber and treat each other with little to no respect.

I want to thank the member for moving this consideration in detail amendment because ultimately I think it is infinitely sensible and it finds a very nice middle ground between what the Set the standard report actually recommended, what the joint parliamentary committee that looked into this recommended and where we've actually ended up with this legislation. At the heart of the recommendations from both the Set the standard report and the committee inquiry was the fact that whatever we establish from here and now must be transparent and must hold us to a higher level of accountability then we have had in this place to date.

Unfortunately, what we see in this legislation at the moment—and I can only assume it's a political compromise—is that, in the case where the breach of behaviour is most egregious in its nature, where Australians arguably will have the most interest in what happens in the face of that incident, that decision is going to be taken out of the hands of the independent committee and handed over to the privileges committee, and at the moment there is no responsibility for the privileges committee to then articulate how they came to their decision. Quite frankly, the privileges committee will not have to take on board what the independent authority offers to them, and, in fact, in a worst-case scenario we may see quite an egregious event be referred from the IPSC to the privileges committee and the privileges committee may choose to take no action whatsoever.

You don't have to be a rocket scientist, and, while I don't support gambling, this is a bet I would take any day: when it hits the public that that's what this place has done, people will see that as politicians looking out for themselves. As the member so eloquently just said, it fails the pub test. Australians told us they want politics done differently. They want it done with transparency, they want it done with integrity and they want it done with accountability. If we cannot have the courage to say that we are prepared to meet them in that space, then I think our parliament still has a lot of maturing to go.

Before I sit down, I want to acknowledge—and I'm going to thank the minister for responding—there's also been a lot of talk about the fact that this legislation would not even have eventuated 11 years ago. I accept that; I get that. But, just because it wouldn't have happened 11 years ago, it doesn't mean we shouldn't bring it in today as strong as it can be. We are not the first parliament to make a move in this direction. The UK parliament went this way in 2015, and they have done it far more bravely than we have in this legislation, and they are the home of the Westminster system, which we were born from. I thank the member for moving this amendment. I commend it to the House. I really do appeal to the government today, who I know believe in this and have fought hard to get us to this point with this legislation: take us all the way, not just to the threshold.

Helen Haines

I rise today in support of the member for Clark and his most excellent amendment to this very important, critical legislation. We are at a moment in our democracy that the people of Australia have been waiting a long time for—that is, to take responsibility for our actions. We come to this place with the hopes of so many people on our shoulders. We come to this place as potential—not actual but potential—role models for young people who may wish to aspire to public life, and we have let them down on so many occasions. That has been going on for a very long time.

In my second reading speech yesterday I spoke to the long history of getting to this point in this parliament to implement this most important recommendation of the Jenkins report. What I'm seeing now, though, is that we are falling not at the first hurdle but at the last hurdle. I really commend the member for Clark for bringing forward an elegant, simple remedy to this last problem. This last issue is about ensuring that the commission that we're about to legislate for can actually have the repercussions of serious misconduct acted upon. What the member for Clark has done for us is lay out how we can do this and still maintain the primacy of the parliament. The member for Clark has highlighted that the privileges committee is a most respected committee—well, to be frank, if a committee is not respected in this place, that's a problem. The fact that we have to call out that some committees are more respected than others is actually a problem and speaks to the issue that we're trying to remedy. Notwithstanding, the member for Clark is a member of that committee and can speak with authority on this. But what we could achieve here through this amendment is to ensure that that most respected committee still has all its agency but also has the accountability that is missing right now in this legislation—that is, accountability to the transparency of a decision.

The people of Australia are so tired of us making up our own rules and then hiding away when the rules are broken and making sure that nobody sees anything here. This amendment does not take away any power from the privileges committee. In fact, it embeds its power. What it adds is its responsibility to the parliament and the people of Australia. Should serious findings be made by the commission and sanctions put forward, those recommendations need to come to the privileges committee. What is the point of having an independent expert committee if their recommendations hold no water? It really does beggar belief for what it is we're trying to do here. I really commend the member for Clark for putting forward a way we can manage this.

Sure, the privileges committee may take a different view to the commission. Fine: explain the reasoning, table the reasoning in the parliament and make it public. Because, if you are a respected member of any committee you should have no shame in what it is that you discuss and decide on your committee—no shame whatsoever. In fact, you should be proud of your reasoning and you should be able to lay that out in a way that explains to Australia why you have arrived at that decision. Where is the problem with that?

I heard a very respected journalist give the Speaker's Lecture in this place only a couple of days ago. The take-home message for me was that Australia wants to have parliamentarians with a ticker. I say to every member of this House—whether you sit on the opposition, with the government or, indeed, on the crossbench: have a ticker, support this amendment, and restore transparency and accountability to this House.

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