Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 20 March 1997
Page: 2635


Miss JACKIE KELLY(5.10 p.m.) —The people of Lindsay love this measure. They think it is fantastic. It means that $500 million of revenue does not have to come out of their pockets. It does not come out in sales tax, which is the way that Keating raised an extra 40 per cent off the people of Lindsay. When the battlers in Lindsay go to the supermarket and spend their hard earned cash, they are paying sales tax.

This measure means that they do not have to pay it in their income tax, capital gains tax, provisional tax or fringe benefits tax. Finally, the people of Lindsay, whose average income is around $40,000, or probably more likely $35,000, do not get to pay. They think that is pretty good. People living in Lindsay on $85,000 who have to contribute are a bit too red faced to complain about it.

The people of Lindsay are doing it really hard. We can sit here in Canberra and have a really good time in very flash surroundings. The capital of the nation caused the recession, but the people in Lindsay wore the recession. They are pretty pleased that the government is finally spreading the burden evenly.

It is not the unions and the leaders of the ACTU doing deals with big business. As you have seen, numerous members of the opposition have stood up and fought for the funds. I wonder what sort of party contributions they are getting. They are standing up for these big funds managers, saying, `Woe is me. We'll have a terrible time administering this tax, not to mention the 10 people we just replaced with computer technology.' Are you telling me they do not have the technology and the information systems to deal with this tax, that they are going to be so stingy about things that they are not even going to put in a bit extra, quite negligibly, out of their massive profits?

These are funds that you have to contribute to. Wouldn't the people of Lindsay love to have that job. They would say, `You have to come and buy from me. What a great job. What a great industry. You have to pay. They've got a guaranteed source of income.' Those opposite have the gall to whinge and say, `Oh, our costs are going up. We'll have to pass them on.'

I tell you that the people of Lindsay, contrary to the statements of the member for Curtin (Mr Rocher), do not know a whole bunch about the share market. They do not know a whole bunch about negative gearing. They do not know a whole bunch about those complex things. This is the reason they pay a fund to do that for them. They expect certain increases, certain guarantees and a certain percentage increase in income from the funds. That is what funds are paid to do, and they do it very well.

These funds have access to the latest program on the market, Wizard, which is guaranteed to get you gains in the share market between 14 per cent and 15 per cent. Another program came on the market recently. For about $2,000 you can get gains in the share market—guarantee 14 per cent since December 1995. These funds have access to those sort of resources. They are actually, once they get these contributions, making money.

The member for Curtin is exactly right. In contributing to a fund, an 18 per cent tax haven is available, not to mention what the funds are going to earn for you. If the funds are not doing that—if they want to talk down their own product and think that they are so lousy about it—then good. The people of Lindsay will go shopping. We will find another fund. We will find someone who is going to give us that 18 per cent tax haven, and more, on our input.

If you decide not to contribute to super and you pay your 48 per cent to the government and try to find a better return than 18 per cent plus on your money, I do not think you will be able to. Superannuation is still an immensely attractive option. It is still the premier option to take advantage of. A lot has been said about small business owners. To answer the member for Curtin: no, the incentive does not apply to the rollover nor to superannuation of $500,000 by small businesses. That has been made clear.

The only people who really seem to be affected by this are judges and politicians. And, boy, aren't they all terribly cranky on the other side. Politicians are going to be affected. The members on this side of the House are quite prepared to wear that. If the people of Lindsay have to wear it, we will. If the members of the opposition want to get up here and come out with mumbo-jumbo and support the superannuation funds and the judges and then say, `Look at that—we benefit too,' it shows that they have no idea why they lost government on 2 March and the by-election on 19 October. It is quite clear to me.

This is fair. Saving measures were implemented right around Australia in the last budget. Money was taken from all depart ments. That was spread right across the board evenly—child care, aged, R&D, the Public Service, Medicare, you name it. In this instance, all we are asking is that the funds pay their fair share. If they want to use their clout and their lobby group and say, `We are going to make it hideously expensive and pass it on to contributors,' woe betide them. Because, if they want to talk down their own product, no one is going to lose from it except them.

There is a lot mentioned about the constitutional challenge to the act. It is said that you cannot get the funds to pay the fund members' surcharge. The opponents to this bill are relying on section 51, subsection (xxxi) of the constitution to do that. That section basically says that the Commonwealth may acquire:

. . . property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws

They are hanging their hat on that clause, saying that, according to that clause, you are taking money away from the funds without just compensation. It is their money!

It is not the funds' money; it is the employers' contribution on the employees' contribution to a superannuation fund which has a responsibility to make a decent profit on those contributions so that people can rely on a lump sum or pension benefit to take them out of dependence on the government in their twilight years. The people of Lindsay do not want to be dependent on the government. We are as keen to save as the next person. We will do the right thing.

By 2030, we will have five million people over 60 and things will be looking pretty grim for the younger generation who will have to fund these people. Before I came to parliament, I had never been into a nursing home. All my grandparents were dead before I was five and, moving in the circles I did, which were from my own age-group, I had not had a huge amount to do with older people. My first experience of a nursing home was an eye-opener. You are looking at quite an expensive industry in terms of the enormous amount of care and the workers per aged person needed in these homes. Running a nursing home is a big effort and a very expensive task. We are going to have fewer people wanting to work in that industry—because it is very specialised and personality specific—and a greater number of people relying on it. People are going to have to take responsibility now for their aged life and fund that themselves.

All we are doing is encouraging that process and saying, `That is fair.' Thanks to the previous government, it is terribly complex to administer, and we should not be hampered in our wish to make these changes simply because it was already complex. The funds which are crying foul about the complexity now probably should have done so earlier. We should not be worried about making the measures we want to make because what has gone before us makes it so complex. Those complexities were already in the system.

We are asking for a minor adjustment—the collection of tax file numbers. Again there was a big cry from the opponents of this bill, saying, `But 20 per cent of the members are lost and the fund is no longer in contact with them.' It has been estimated that there are billions of dollars swanning around unaccounted for in the slush funds of these superannuation funds. No one is making a claim on them. What happens to those funds and the interest on them? What are these fund managers doing? It is almost a genuine requirement that we say, `Collect tax file numbers. It is better for you if you collect everyone's tax file number because, the next time that tax file number comes through, that person can be found, and you will not have lost 20 per cent of your members.'

There is also a terrific incentive now for people to give their tax file numbers to superannuation funds. If they do not, and they earn over $85,000, their employer contributions are going to be taxed at 15 per cent. They will be anyway, but if they earn less than that and do not give their tax file number over, they are going to be taxed at that rate. So there is a terrific incentive there for people who are forward thinking.

I do not think it is valid to patronise people and say, `They will not be aware of it,' `They do not know about it' and `Things will not happen.' Most people change jobs every six to seven years, and when they do they tend to change superannuation funds. People are aware of their superannuation funds. They are monitoring them. They are getting monthly or yearly statements from them and are keeping track of how much they are going to be worth on retirement. Everyone is aware of savings. I do not see it as being the problem. If it is, then this government will fix it. We are not inflexible on things.

The member for Curtin came up with numerous other avenues, ideas and ways for saving. But who is to say that they would not have similar problems? Who gave them the right to stand up and say absolutely that this is how it should be done? The point is that, whatever change is made, it is going to carry with it certain discomforts. It is going to step outside someone's comfort zone. If it puts someone outside their comfort zones, well, I am terribly sorry, but it is all about progress and the progress of the nation. And go forward we will.

The administrative costs should be able to be kept fairly minimal given the high technology and the software available to the funds. It is the industry that is complaining. It is the fat cats at the top who are complaining. You really do not hear the average person on the streets in Lindsay coming up and saying, `Listen, Jackie, about that superannuation bill—' It does not affect them. Yet we have seen incredible lobby power.

It is wrong that they should misuse their lobbying ability and come to government with such a mealy-mouthed, stingy appeal and say that they should be exempt in some way from contributing to the almost $10 billion hole that has been left by Labor. All of us have put our hands in our pockets. It is about time that the super funds contributed as well.

We have had some advice on the constitutional challenge that is proposed. There are ways to reorganise the act, such as deleting section 34 and making various changes to the regulations of the superannuation supervisory act. That would get us around a lot of the legal technicalities that the super funds use to find a loophole to get out of their obligations. They can try to loop through loopholes as much as they like, but we will make the effort and we have the willpower to carry through with this legislation.

I do not see why the opposition are trying to score brownie points on a bill that they will be supporting. I do not see why they should still be trying to score points in that fashion. They must support it because it is fair. It is as fair as our work for the dole scheme. They came out and opposed that scheme but then realised, `Hang on a minute, the average person on the street likes it. They think it is fair.' All of a sudden we saw a backflip and they said, `We will go back and reconsider that and we will change our position to reflect something that is fair.' Again, they recognise that this is fair. They support it on one side but then flip flop to the other side. `Hang on, let us put up a weather balloon and see which way the public opinion is flowing and we will jump on that bandwagon.'

We on this side of the House have a vision to get Australia out of debt, to have some solid government savings by the year 2000 and to put Australia back in the black. We are well on the way to achieving that vision. This bill will play a substantial part in doing that. I commend the bill to the House.

Debate (on motion by Ms Macklin) adjourned.