Mr PRICE(9.00 p.m.) —We are tonight having a cognate debate on seven superannuation bills that impose a superannuation surcharge. It is really disappointing that in the area of superannuation we seem to have history repeating itself. I say that because it was the Menzies government in 1950 that destroyed the National Welfare Fund. I know, Mr Deputy Speaker Hollis, that you go to a lot of senior citizens' functions. People will often raise with members the fact that they contributed to their own pensions because when Australia had a fully funded national superannuation scheme called the National Welfare Fund, they were in it. Every pound of earnings required a contribution into that fund towards your old age. That fund was emasculated by the conservatives.

When Labor came to government in 1983 only 40 per cent of the work force was covered by superannuation. When the highest marginal rate was 60 cents in the dollar, the rate of taxation on superannuation was three cents, because only five per cent of it was taxable. We get lectured by this government that they are introducing equity reforms into superannuation. I think you need to put it in the context of what we did. As I said, in 1983 only 40 per cent were covered. Now 90 per cent are covered. In 1983 only 24 per cent of women in the work force had superannuation. Now I think that figure is 85 per cent. So one thing that we did over 13 years was try to give superannuation coverage to the majority of the population, so that they would not be totally dependent on an old age pension.

Much has been said by the Treasurer, the honourable member for Higgins (Mr Costello), particularly during question time, about the 1993 election promises relating to taxation. The first thing that needs to be said is that we did introduce the reduction in the taxation scales, as we promised. In other words, the first part of it was delivered. For example, the 38 per cent rate went to 34 per cent and the 46 per cent rate went to 43 per cent. It is true that we undertook in 1996 to introduce the second phase. But we did not do that. What we said we would do, and in fact undertook to do was, rather than giving people a further tax cut, to match dollar for dollar the contribution of those earning up to $46,000 by paying up to $1,000 per annum each and every year into their superannuation accounts. That payment phased out when earnings reached $65,000.

I am staggered that the Treasurer and government members can get up in this parliament and say that they are quite comfortable with the idea that the Prime Minister, John Howard, is going to renege on that. What he is going to do is rip it out of their superannuation accounts and not give it back as tax cuts but put it in the government coffers.

Looking at the legislation they have been bringing in, we see that they have paid off the banks. One election promise—core or non-core—which has not been deviated from one millimetre is to establish retirement savings accounts. This means windfall profits to the banks and minimum returns for workers. They have made that electoral payment. We now learn that they are going to confiscate the second phase of Labor's proposed $4.5 billion worth of superannuation benefits; they are going to renege on that.

Tonight we are considering a further proposal that sounds really good in theory; that is, we are going to put a surcharge on those high income earners—everyone earning more than $70,000. Regrettably, a number of people who are not earning $70,000 a year are going to be caught up in that. That includes people who get redundancy packages and termination packages. These people are going to be affected, as are those whom the superannuation funds cannot contact. Assuming that 10 per cent of people cannot be contacted by their super funds, the industry estimates that over ome million people will be affected.

The mechanism for dealing with the 355,000 people who earn more than $70,000 is that superannuation funds have to provide the Taxation Office with details of 16 million separate accounts that they hold. Today in this parliament we heard the Prime Minister announce all these marvellous improvements designed to cut red tape. I cannot understand how you are possibly cutting red tape when, to be able to find accurate information on 355,000 people paying superannuation, you have to access 16 million accounts.

In its first year, for people who are contributing superannuation, it doesn't matter whether you are at $70,000, $20,000 or $30,000, the impact is $100 million. All contributors are going to be required to pay that. The ongoing cost of that is estimated at $30 million each year. Over a period of time, a significant amount of money that would have been going to benefit people in their old age is not going to benefit them. It is going to be eaten up in administrative charges.

There is a decent and honest way to deal with the government's shortfall of revenue. That is not to adopt this chicanery of saying, `This surcharge is a surcharge; it is not a tax.' Of course, it is a tax. The cleaner, more effective and efficient way would have been to increase marginal rates of taxation to collect that measure. But the government is not going to do it. It is taking seven bills just to implement this bit of government legislation. It has claimed that it is equitable, but a whole raft of people are going to be affected by that, not just those on $70,000. It is going to be people on termination payments, redundancy packages and golden handshakes. They will all be caught up with it, as well as those who have notified merely their employer about their tax file number and not their superannuation fund.

I regret that conservative history is that they destroyed the National Welfare Fund, a fully funded superannuation scheme, in the 1950s. And they are doing the very same thing now with the superannuation system that we have left in place that was going to add significantly to peoples' retirements. It was going to add $500 billion in national savings in the year 2000 and much more in the years to come. It is being strangled by this government by each and every successive measure.