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- Start of Business
QUESTIONS WITHOUT NOTICE
(McClelland, Robert, MP, Howard, John, MP)
(Haase, Barry, MP, Howard, John, MP)
(Rudd, Kevin, MP, Howard, John, MP)
(Barresi, Phillip, MP, Costello, Peter, MP)
(Rudd, Kevin, MP, Howard, John, MP)
(Neville, Paul, MP, Vaile, Mark, MP)
(Albanese, Anthony, MP, Vaile, Mark, MP)
(Jensen, Dennis, MP, Costello, Peter, MP)
(Tanner, Lindsay, MP, Howard, John, MP)
(Broadbent, Russell, MP, Truss, Warren, MP)
(Katter, Bob, MP, Turnbull, Malcolm, MP)
(Hartsuyker, Luke, MP, Turnbull, Malcolm, MP)
(Swan, Wayne, MP, Howard, John, MP)
(Johnson, Michael, MP, Hockey, Joe, MP)
(Smith, Stephen, MP, Howard, John, MP)
(Baker, Mark, MP, Abbott, Tony, MP)
(Rudd, Kevin, MP, Howard, John, MP)
Australian Defence Force Personnel
(Gash, Joanna, MP, Nelson, Dr Brendan, MP)
(Rudd, Kevin, MP, Howard, John, MP)
(Bartlett, Kerry, MP, Bishop, Julie, MP)
- QUESTIONS WITHOUT NOTICE: ADDITIONAL ANSWERS
- QUESTIONS TO THE SPEAKER
- PERSONAL EXPLANATIONS
- MATTERS OF PUBLIC IMPORTANCE
TAX LAWS AMENDMENT (SIMPLIFIED SUPERANNUATION) BILL 2006
SUPERANNUATION (EXCESS CONCESSIONAL CONTRIBUTIONS TAX) BILL 2006
SUPERANNUATION (EXCESS NON-CONCESSIONAL CONTRIBUTIONS TAX) BILL 2006
SUPERANNUATION (EXCESS UNTAXED ROLL-OVER AMOUNTS TAX) BILL 2006
SUPERANNUATION (DEPARTING AUSTRALIA SUPERANNUATION PAYMENTS TAX) BILL 2006
SUPERANNUATION (SELF MANAGED SUPERANNUATION FUNDS) SUPERVISORY LEVY AMENDMENT BILL 2006
SUPERANNUATION LEGISLATION AMENDMENT (SIMPLIFICATION) BILL 2007
INCOME TAX AMENDMENT BILL 2007
INCOME TAX (FORMER COMPLYING SUPERANNUATION FUNDS) AMENDMENT BILL 2007
INCOME TAX (FORMER NON-RESIDENT SUPERANNUATION FUNDS) AMENDMENT BILL 2007
INCOME TAX RATES AMENDMENT (SUPERANNUATION) BILL 2007
- SUPERANNUATION (EXCESS CONCESSIONAL CONTRIBUTIONS TAX) BILL 2006
- SUPERANNUATION (EXCESS NON-CONCESSIONAL CONTRIBUTIONS TAX) BILL 2006
- SUPERANNUATION (EXCESS UNTAXED ROLL-OVER AMOUNTS TAX) BILL 2006
- SUPERANNUATION (DEPARTING AUSTRALIA SUPERANNUATION PAYMENTS TAX) BILL 2006
- SUPERANNUATION (SELF MANAGED SUPERANNUATION FUNDS) SUPERVISORY LEVY AMENDMENT BILL 2006
- SUPERANNUATION LEGISLATION AMENDMENT (SIMPLIFICATION) BILL 2007
- INCOME TAX AMENDMENT BILL 2007
- INCOME TAX (FORMER COMPLYING SUPERANNUATION FUNDS) AMENDMENT BILL 2007
- INCOME TAX (FORMER NON-RESIDENT SUPERANNUATION FUNDS) AMENDMENT BILL 2007
- INCOME TAX RATES AMENDMENT (SUPERANNUATION) BILL 2007
- NATIVE TITLE AMENDMENT BILL 2006
- QUESTIONS IN WRITING
Tuesday, 13 February 2007
Mr JOHNSON (5:45 PM) —I am pleased to speak on this very important Tax Laws Amendment (Simplified Superannuation) Bill 2006, which I know the constituents of the Ryan electorate, which I very proudly represent in this parliament, will have a deep and abiding interest in. I am pleased to hear from the shadow Treasurer that his party also supports this government bill. I certainly look forward to hearing more detail from him and his colleagues on superannuation, which is of course part of the overall economic security of Australians. He talked about wealth creation and wealth security for Australians. That was somewhat hypocritical because Australians in this country today under the Howard government have far more economic security and are far more secure in their family lives and in their financial futures than they have ever been under any Labor government. I would certainly prefer to have the current administration running the policies of this country than the opposition.
The important thing that this bill raises is economic security for Australians. As I said, part of that economic security is people’s superannuation, because we are living in a time when people are living longer and they want their future financial security to be assured. This government is very keen to ensure that Australians have financial security into their old age. The changes that this bill brings to our superannuation architecture are very important.
Australia’s superannuation pool is set to hit the $1 trillion mark some time in the next few months. This is very welcome. I think it is important that credit is given where it is due. All members on this side of the chamber acknowledge that the superannuation initiative came from the Labor Party when it was in government. But the disappointing aspect of all this is that the Labor Party does not support the Howard government when it comes up with good policy and good initiatives. That is a reflection of the thinking of the current Labor Party.
We do not want to rest on our laurels about the superannuation pool and structure; we want to improve it and ensure that Australians embrace superannuation as the best way to protect their future. That is why the Howard government is very keen to continue reforms and continue to bring in policies that will really make a difference.
The shadow Treasurer was talking about how his side of politics should claim all the credit. None other than a former Labor minister has praised the Howard government and the Treasurer for the bold initiatives that it is bringing into policy and legislation. I think it is very important that we tell Australians when a former Labor minister responsible for the area of superannuation gives huge points to the Treasurer and the government for bringing in bold superannuation initiatives and not let that go unnoticed. I certainly do not want it to go unnoticed here in the parliament and leave my constituents in Ryan out of the loop on what the two sides of politics think about superannuation policy. In an article in the Australian in May 2006 former federal Labor minister Susan Ryan talks about the differences between the government’s superannuation ideas and policies and those of Labor. It is very instructive and telling. I would like to quote from this article because I think it is very relevant—certainly it is for Ryan taxpayers. I quote:
Where does the plan leave Labor? Not scrabbling around in the stale detail of yesterday’s policies, I hope.
Big challenges remain: helping the low-paid to save enough for the tax-free stage to matter, or finding ways to compensate women for super lost from years out of paid work caring for families. Maybe faced with the Treasurer’s bold gazumping of Labor’s cherished but slightly shabby super property, the Opposition will find the resolve to get another big picture worked out, and the wherewithal to let voters know about it.
They certainly have not done that. They do not have any ideas at all about superannuation in 2007 and about letting the voters know about it. It is important in this country that we encourage a culture of saving. It is important that we inform young Australians in particular that it is important to keep one eye on the future because there will come a time when they will need resources at a latter stage of their lives.
The reforms are the biggest changes to happen to superannuation for two decades. There is absolutely no doubt about that. As I said, the former Labor minister Susan Ryan endorses that view. I know that the opposition do not agree with that, but of course they would not in their current position. It is expected that these reforms will impact over 10 million Australians, 1.3 million employers and more than 310,000 superannuation funds.
The proposed changes were outlined in the working paper ‘A plan to simplify and streamline superannuation’ which was released as part of the budget. Following the release of that working paper, the government received over 1,500 written submissions and more than 3,500 phone calls from the community with comments and suggestions about the reforms and the transitional arrangements. Together, the reforms and the transitional arrangements represent a massive $7.2 billion investment by the federal government to simplify and streamline Australia’s superannuation system.
The complexities of the old superannuation system were staggering. I will give an example of the circumstances in which an Australian, maybe in the latter stages of their life, was meant to digest the complexity of the superannuation architecture as it existed. I will use the words of the Treasurer in his address to the National Press Club in May 2006 because they are helpful in explaining how difficult it is for an older Australian to comprehend the complexity of superannuation:
If you have a pre July ’83 contribution, 5 per cent is taxed at marginal tax rate. If you have a concessional contribution 5 per cent is taxed at marginal tax rate. If it’s an undeducted contribution that part is exempt. For invalidity post June of 1994 that part is exempt. If it’s a capital gains tax roll in that part is exempt. If it’s non-qualifying, that part is taxed at marginal rates. If it’s post June of 1983 you have a threshold and if it’s excessive it’s 38 per cent.
For everyday Australians, facing this sort of scenario in handling their superannuation portfolio really is too much. I am delighted that the government is taking this very bold initiative to redress the complexity in our superannuation architecture. It is that kind of complexity which diminishes Australians’ overall confidence in our superannuation system’s ability to provide for them adequately in their retirement.
Following these reforms, the sort of circumstance I just touched on will be abolished and replaced with one simple rule—that is, if you are over 60, whether you access your superannuation as a pension or as a lump sum, you will pay no tax. Not only will this reduce complexity but the government estimates it will boost an average weekly retirement income of $1,000 by $170. The changes will reduce complexity not only for retirees but also for superannuation funds and employers. I would trust that any drop in administrative costs experienced by the superannuation industry would be transferred to the consumer through a lessening of the administrative fees they charge, because we know that the superannuation industry is swimming in almost $1 trillion of funds.
Where previously a person’s superannuation benefits had to be paid out when that person reached 65 and was no longer gainfully employed, those sections of the legislation will be repealed under this bill and the person will now have the option to leave their benefits in their superannuation fund indefinitely, withdrawing as much or as little as they choose at any time after their preservation age. In order to minimise the risk of people abusing these very generous reforms, restrictions will still apply to the amount someone can place in their superannuation fund as a tax deductible contribution. However, the limits will be simpler and fairer with the old cumbersome age limits scrapped in favour of one single limit of $50,000 per annum in pre-tax contributions and $150,000 per annum in post-tax contributions. Not only will this negate the risk of people abusing the system as a tax haven, it will also enable younger Australians to save more and save earlier by removing the $15,000-plus contribution limit for under 35s.
It really is important that all of us encourage younger Australians in our electorates to consider their financial position and the amount of money they can put into their superannuation funds. Clearly young people have been amongst the biggest winners from these sweeping changes to superannuation unveiled in the budget, with the abolition of the age based limits on deductible super contributions from 1 July 2007. It certainly does make super far more attractive to generations X and Y and, in particular, to those in self-employment who have the capacity to invest in their superannuation schemes.
On this side of the House, the small business constituency is a very high priority. I only wish that those opposite would share our view and our philosophy of giving more attention to and showing more affection for the small businesses of our country.
Mr Hatton interjecting—
Mr JOHNSON —I notice the honourable member for Blaxland is sitting opposite. He is probably one of the very few members on the Labor side who might pay attention to small businesses in his constituency, as perhaps would the shadow minister for immigration at the table, the member for Watson, but I am not sure that they really do have the affection for small business that we do. They probably tolerate small businesses but we are the ones who love small businesses. On this side of the House we have a very deep affection for small business. I doubt very much that anyone in the small business community across the length and breadth of this great country would change their view on that, especially when it comes to economic security and the good policy that keeps the businesses of this country profitable.
We all know that small businesses account for some 95 per cent of businesses in Australia. They employ some 3.3 million people and account for 30 per cent, or over $300 billion, of Australia’s GDP—no small amount. It needs to be said again to those who try to diminish the achievements of the Howard government that 1.9 million new jobs have been created since 1996, when the Howard government came to office, because of the policies we have introduced, which are all about enterprise and all about innovation.
A lot of these Australians are self-employed. Not only are a lot of people in small businesses working in their businesses and investing in them but a lot of them have their entire lives resting in their small businesses. The link to superannuation, therefore, is absolutely vital.
One of the very shameful legacies of the pre-1996 superannuation changes is that self-employed people have often been treated as second-class citizens when it comes to saving for their future. They are a critical section of our Australian community. They are the drivers in so many ways of our prosperity and economic growth. We need to ensure that superannuation is front and centre for them as well as it is for those who are employees in companies across the country.
Under the existing system, self-employed people face a number of additional restrictions: different tax deductibility rules, which means they have to contribute more money to achieve the same tax deduction as someone who is employed; no tax deductible super contributions can be made on their behalf once they reach the age of 69; and they are not eligible for the government’s co-contribution scheme.
Under the new simplified superannuation reforms, the special restrictions on the self-employed are removed, allowing them to get a 100 per cent tax deduction for super contributions up to the new limits. I welcome this very much and I know that the small businesses of the Ryan electorate will be thrilled at this new provision. Also removed is the age limit on tax deductible super contributions. Self-employed people will be treated the same as employees and will be allowed to claim a full tax deduction up to the new limit until the age of 75. Finally, the co-contribution scheme requirements have been streamlined so that as long as a person earns over 10 per cent of their income from carrying on a business or gainful employment, and they are under the age of 71, they will be able to utilise the scheme. This will enable self-employed people to access this already generous federal government initiative.
The reforms contained in these bills will also make changes to the way superannuation companies deal with lost superannuation. As Australia’s workforce becomes more mobile and more flexible under the workplace relations regime—which we will take to the Australian people later this year and which I am sure they will endorse very strongly—there will be more cases of superannuation funds being forgotten about and not rolled over when workers change their employment or their circumstances. We will ensure that this lost superannuation, which really is a staggering amount—some $9.2 billion I understand across more than 13 million accounts—will be addressed. Under current arrangements, when a fund cannot contact a person, once they turn 65, the balance of their account is transferred into the coffers of the state in which the fund is based. This presents a number of problems when people try to reclaim the money. We want as much as possible to make it easier for Australians in these particular circumstances to be able to reclaim the money that they are entitled to.
In conclusion, I support this bill very strongly. It is very welcome in the Ryan electorate and amongst small business owners. I am pleased that the Labor Party will support it. It is about time that they supported something that was in the national interest. I do commend them for supporting it. Of course, it is very disappointing that in June last year they were not able to support us, but they have decided that it is in the interests of the wider community that they do support us. I guess it is better late than never. A month after the budget was delivered last was the time when my firstborn—young Ryan Andrew Johnson—came into this world. It is now February 2007, some 7½ months later, and it is great that the Labor Party are supporting a government bill. It is quite a while, but better late than never. I thank them for supporting a very important government initiative. I know that the good people of Ryan will be very pleased these critical bills are being supported by the federal Labor Party.