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Wednesday, 17 September 2003
Page: 20371

Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (7:18 PM) —in reply—It was with some considerable surprise I noticed the earlier speakers finish their contributions so quickly that this bill is able to be summed up tonight. It is an important bill. I am particularly pleased to be able to, on behalf of the government, summarise the situation concerning the Taxation Laws Amendment (Superannuation Contributions Splitting) Bill 2003. I thank the member for Lowe for his support of this bill and for his positive comments about this bill in relation to the situation of families. It is very reassuring to find on the opposition side of the parliament someone who is prepared to give credit where credit is due. On a number of occasions, the member for Lowe has not hesitated to do that. I hope by giving him this compliment that he well deserves I am not putting his endorsement at risk.

The government is pleased to have the support of the member for Lowe and other members opposite with respect to this particular bill, which provides the consequential tax amendments to implement the election commitment of the government to allow members to split their superannuation contributions with their spouses. It is unfortunate that the opposition does not always recognise that, when the government goes to the people with an election policy and wins the election, it has a mandate from the Australian people to implement that policy—and we have had many debates in this place where the ALP has sought to force the government to break its pledge to the Australian people. At least it is reassuring to see the member for Lowe and his colleagues offering support for the Taxation Laws Amendment (Superannuation Contributions Splitting) Bill 2003. Of course, that does not mean that all members of the opposition have, in every utterance during this debate, expressed laudatory comments concerning every element of the bill.

When I sum up bills on behalf of the government—and I must say that I have done a considerable number of them today—I always try to treat honourable members with respect, even those on the other side. When they do make thoughtful but misguided contributions—even if most of what they say is arrant nonsense—I think they deserve a response from the government as to why they are misguided. Sometimes they are simply making statements seeking information. But I do think that everyone is entitled to the respect, where possible, of a response. Unfortunately, in a debate I handled yesterday a couple of quorums were called on me. That meant that I had to truncate the courtesies which I usually express in the direction of members of the opposition, because I did not have quite enough time to expand as much as I normally would have on the remarks that they had made during the debate on the particular bill then before the House.

The member for Kingston expressed concern about the increase in numbers of new fund accounts for spouses who have not previously had an account. I am pleased to be able to advise the member for Kingston that the government believes that all Australians should have an interest in their own retirement income. This includes low-income and non-working spouses. Naturally spouses require their own superannuation account to access this measure. However, many spouses already have a superannuation account, either from previous employment or from part-time work, and thus the government does not consider that contributions splitting will lead to a proliferation of accounts.

The member for Gellibrand referred to the fact that the splitting decision remains with the member, usually the male, and does not provide for immediate splitting of accounts for all women. The government does recognise that the decision to split remains with the member. However, the government wishes to provide couples with the opportunity to split their contributions if they wish. This option is not available to families now, and the member for Gellibrand will be interested to know that this measure will greatly benefit women in our society. The member for Kingston and the member for Gellibrand both posed the question as to whether superannuation splitting does benefit the rich. Here we find the tired old socialist approaches emerging, even from people like the member for Kingston who, on face value, on many occasions appears to be quite reasonable.

I point out to those honourable members that the government has eased eligibility to contribute to superannuation to accommodate a growing appreciation of the need for all Australians to save for retirement. This is particularly important given the fact that we have a declining birth rate and an ageing population. Contributions splitting furthers the commitment of the government to broaden the accessibility of superannuation. In particular, splitting of super contributions will assist low-income or non-working spouses to accumulate their own super, even couples who cannot afford to make voluntary contributions. Super contributions splitting also fulfils an equity objective by allowing single-income families to access the same tax treatment as dual-income families—that is, access to two RBLs and low-rate thresholds. As I said before, this measure particularly benefits women.

The member for Riverina referred to the fact that the annual split model keeps additional administration costs to a minimum. The member for Riverina is absolutely correct. It is an important point that she makes, and all of us should carefully take note of it. While super funds will shoulder some administrative burden, the government's annual split model keeps this burden to a minimum. It also limits the administrative burden on fund members. The member for Kingston expressed a concern about lack of detail. The bill was introduced before the regulations to enable timely consideration of the issues. This is a normal legislative practice as processing the bill clearly takes time and much longer than regulations. It also ought to be recognised that regulations are disallowable instruments and that the parliament can always consider them.

The member for Kingston also claimed that high fees and charges will be incurred by those who split. Excessive fees and charges are a concern to the government, and the government has introduced two measures that will increase competition and reduce fees and charges—namely, choice and portability. The splitting measure will also allow the receiving spouse to choose a fund and an account that suits their respective needs. The government believes competition, not regulation, is the best way to reduce fees. Superannuation has traditionally been seen as a savings vehicle for those in employment. However, to accommodate a growing appreciation of the need for all Australians to prepare financially for their retirement, eligibility to make superannuation contributions has been eased. While the general link between paid employment and the ability to contribute to superannuation will be maintained, the government wishes to encourage more people to contribute to superannuation and provide for higher incomes in retirement.

The government has introduced a number of measures that have broadened the accessibility of superannuation to individuals outside of the work force. Contributions splitting furthers the government's commitment to broaden the accessibility of superannuation. The splitting of superannuation contributions will assist many families. In particular it will allow low-income or non-working spouses to have superannuation assets under their own control and to have their own income in retirement. This measure is expected to particularly benefit women. In particular, the ability to split employer superannuation contributions will assist couples that cannot afford to make voluntary contributions. It will also provide single-income couples, including those not able to make voluntary contributions, with access to two ETP low-rate thresholds and two RBL limits in the same way as dual-income families. Superannuation contributions splitting will therefore fulfil an equity objective by providing single-income couples with an equivalent tax treatment to dual-income families.

The government has consulted widely on this measure. As a result of those consultations, the government is proposing an annual split model for the splitting of contributions—that is, after the end of the financial year the member could request that contributions made in the previous year be split with their spouse. The details of the mechanics of contributions splitting will be specified in regulations. The government expects to release an exposure draft of the regulations shortly. I thank honourable members for their contributions and their support and I commend this bill to the House.

The DEPUTY SPEAKER (Hon. I.R. Causley)—I call the honourable member for Lowe.

Mr Murphy —Just briefly, Mr Deputy Speaker—

The DEPUTY SPEAKER —You cannot speak, I am sorry. The parliamentary secretary has just summed up so I have to put the question.

Mr Murphy —I emphasise that I gave qualified support for the bill.

The DEPUTY SPEAKER (Hon. I.R. Causley)—I think we all heard it.

Question agreed to.

Bill read a second time.