Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (10:51 AM) —in reply—Honourable members would want me to thank them for their contributions in the debate on these two cognate bills today, the Taxation Laws Amendment (Superannuation) Bill (No. 1) 2002 and the Income Tax (Superannuation Payments Withholding Tax) Bill 2002. In summing up, I would like to refer to some of the comments made, in particular, by the honourable member for Werriwa. In his speech, the member for Werriwa referred to the change of start date from 1 January 2002 to 1 July 2002 and, in effect, queried why that has occurred. It makes no difference to expected tax revenue. This is a government which is prepared to consult with the industry, and the industry argued that it needed more time to implement changes. The government could have pursued a 1 January start date, but the existing rates of taxes would not have been sufficient to claw back the tax concessions. It was a practical decision that was made after consultation with the industry.

The member for Werriwa, in what was his maiden contribution as a shadow minister upon his return to the frontbench—and I must say that he did enjoy a number of years in Coventry—also accused the government of introducing a new tax. The member for Werriwa knows that is not the case. What we are doing is introducing not a new tax but a new tax rate. As I mentioned a moment ago, the existing tax rates of 20 per cent and 30 per cent would not have clawed back the tax concessions.

The member for Werriwa also claimed that in some cases the tax rate will be too high. In most cases, payments will be taxed at 30 per cent. The aim is to ensure that no person who takes his or her superannuation prior to retirement receives concessional tax treatment. A simple flat rate has significant benefits in making the measure simple, easy to administer and also cost-effective to administer—and that is important. The member for Werriwa also referred to the tightening of release rules in 1998. The member for Werriwa ought to appreciate that we are now in 2002 and that times have indeed changed. This measure will complement current bilateral negotiations with countries to prevent double super guarantee being paid. One could dismiss most of the comments made by the member for Werriwa which were marginally critical of the principles contained in this legislation. The government does however thank the opposition for its support for the legislation.

Before I conclude I want to place on record how fortunate this House is to have the honourable member for Solomon as a member. As we heard during his speech, he is a person with a strong professional background in the superannuation sector, unlike so many members opposite whose only claim to fame is a long and enduring membership of the trade union movement. The member for Solomon has a strong corporate background. He is able to stand up, unlike many members opposite, and refer to his own personal affiliation with the business community. I have to say that the people of Solomon were particularly discerning at the election last year when they chose to send to Canberra a member of the quality of the honourable member for Solomon.

The government announced in its A Better Superannuation System statement last year that temporary residents permanently departing Australia would be able to access their superannuation. We deliver in this legislation on the government's announcement. The taxation arrangements for this measure are set out in this legislation. There are only a very limited number of situations where people are able to access their superannuation funds before preservation age. Temporary residents who have permanently departed Australia will not be retiring in Australia and often wish to take their superannuation benefits with them to the country in which they live. Currently they are unable to do so. The member for Solomon in his speech outlined the situation of a relative of his. The government is proposing amendments to the Superannuation Industry (Supervision) Regulations which will in future allow such persons to access their superannuation on departing Australia.

However, as the payment will be to a temporary resident who will not be using the payment for retirement in Australia, it would not be appropriate for the payment to receive concessional taxation treatment. I am a bit surprised that the member for Werriwa was critical of the government's removal of concessional taxation treatment. Accordingly, the Taxation Laws Amendment (Superannuation) Bill (No. 1) 2002, in conjunction with the Income Tax (Superannuation Payments Withholding Tax) Bill 2002, imposes special rates of taxation on superannuation paid to temporary residents permanently departing Australia and requires funds, quite understandably, to withhold taxation from such payments at those rates.

Earlier in this speech I emphasised that the amendments will claw back the taxation concessions on these payments while still allowing temporary residents permanently departing Australia to take their superannuation, rather than requiring them to leave it in this country until retirement. The explanatory memorandum, which was tabled at the time of the second reading speech, contained the full measures of the legislation. Both of these bills are important measures for Australia's superannuation system and for the community. I thank members for their speeches and their support and I commend the legislation to the chamber.

Question agreed to.

Bill read a second time.