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- Start of Business
- Military Justice (Interim Measures) Amendment Bill 2013
- Sex Discrimination Amendment (Sexual Orientation, Gender Identity and Intersex Status) Bill 2013
- Public Interest Disclosure Bill 2013
- Aboriginal Land Rights and Other Legislation Amendment Bill 2013
- National Disability Insurance Scheme Bill 2013
- Broadcasting Legislation Amendment (Convergence Review and Other Measures) Bill 2013, Television Licence Fees Amendment Bill 2013
- Fair Work Amendment Bill 2013
- Public Works Committee
- Publications Committee
- REGISTER OF MEMBERS' INTERESTS
- STATEMENTS ON INDULGENCE
STATEMENTS BY MEMBERS
- Flynn Electorate: Calliope Bulls and Bands Flood Appeal
- Bass Electorate: Northern Cancer Support Centre
- Gillard Government
- National Apology for Forced Adoptions
- Victorian Junior Lifesaving Championships
- Esmore, Professor Donald, AO
- Bass Electorate: Bridport Surf Life Saving Club
- Labor Party Policy
- New South Wales Government
- MINISTERIAL ARRANGEMENTS
- QUESTIONS WITHOUT NOTICE
- DISTINGUISHED VISITORS
- STATEMENTS ON INDULGENCE
- Start of Business
- Zulfiqar, Mr Minhas
- Fraser Electorate: Volunteers
- Canning Electorate: Haynes Post Office
- Holt Electorate: Community Awards
- National Apology for Forced Adoptions
- Parliamentary Zone: Parking
- Dairy Industry
- Men's Sheds
- University of Queensland Research
- Aged Care
- Hayes, Chris, MP
- Freedom of Speech
- National Gallery of Australia
- Hinkler Electorate: Fishing
- Vietnam War
- Gillard Government
- Rare Voices Australia
- Kids in Dangerous Situations Foundation
- Canberra Centenary: 100 Years, 100 Great Women
- Solomon Electorate: Health Services
- Layland, Professor Brian, OAM
- Pensions and Benefits
Thursday, 21 March 2013
Mr BILLSON (Dunkley) (10:00): The Superannuation Legislation Amendment (Reform of Self-Managed Superannuation Funds Supervisory Levy Arrangements) Bill 2013—doesn't that just roll off the tongue?—is before the House as a MYEFO, Mid-year Economic and Fiscal Outlook, budget measure that the government announced in October last year.
The bill seeks to provide for an increase in the levy payable by a trustee of a self-managed superannuation fund from $191 to $259 commencing from the 2013-14 financial year. It also brings forward the liability to pay the levy during the income year instead of the current requirement to pay a number of months after the end of the year, when the self-managed superannuation fund lodges its return. So the bill is about both a fee increase and a fee bring-forward. The government argued that this measure was required to ensure that the Australian Taxation Office's cost of regulating the sector was fully recovered.
The bill was referred to the Parliamentary Joint Committee on Corporations and Financial Services in order to understand the justification for this increase to the levy. The committee found that it was in fact Treasury, not the ATO, which initiated the increases and bring-forward provisions within this bill. Whilst the committee is yet to finalise and publish its report, and answers to questions taken on notice are yet to be received, current evidence suggests that the initial timing of the government's plan was driven more by its own desperate need for revenue to bolster the budget bottom line, which is fast deteriorating before our very eyes. The bill is more about a dash for cash than a considered and compelling policy measure, as was revealed by the committee's deliberations.
This government has guaranteed the Australian people on over 500 occasions that it would deliver a budget surplus in 2012-13. The Treasurer has promised a surplus on over 350 occasions since 2 May 2010. That promise was 'iron clad'. Failure was 'not an option'. The surplus would be delivered 'come hell or high water'. The finance minister has promised a surplus on 142 occasions since September 2010, saying it was 'not negotiable'. The Prime Minister has promised a surplus more than 150 times since 24 June 2010. She even got ahead of herself, claiming the surplus had already been achieved. In her address to the McKell Institute on 4 July 2012 she said: 'We saved jobs, stayed out of recession and got back to surplus.' Those statements suggested the government peaked early, but it certainly has not delivered a surplus.
On the eve of Christmas last year, the Treasurer finally admitted that it was unlikely that this government's promise of a surplus in the current financial year would be delivered. He said, 'Dramatically lower tax revenue now makes it unlikely that there will be a surplus in 2012-13.' It is an interesting observation, as the latest forecasts suggest the Commonwealth's revenue is set to grow by 7.7 per cent this financial year. The small business community, which I travel through in the area of the member for Ryan and all around the country, would just love to have revenue growth of 7.7 per cent. Alas, that is not their experience; but it is this government's experience. So the revenue growth is substantial; it is significant; but clearly it is not of the herculean proportions needed to cope with the spending binge of this government.
Even when the Treasurer will not tell the Australian people what the bottom line will be, he persists in batting back concerns about escalating debt, the trajectory of our indebtedness, the scale and size of the budget surplus and when, if ever, a Labor government will bring us back to surplus. I think it was 1989 when Labor last delivered a surplus and Mick Hucknall and Simply Red had the hit that year If you don't know me by now. How topical is that? We do know this Treasurer, we do know Labor governments and we do know that a budget surplus is probably further into the future than that hit single was in the past.
The government pays lip-service to balanced budgets but Labor has not delivered a surplus in its last 10 budgets. And with the election to be in September this year it is becoming clearer by the day that this Treasurer will never actually deliver a surplus, as we hear new announcement after new announcement, putting further pressure on the expenditure side of the Commonwealth's finances, with little sign that there are revenue measures or reductions in other areas of expenditure to cover them. I give Labor credit for one thing, and that is a perfect record—five whopping huge budget deficits out of five budgets—a record which I hope no future government will seek to emulate.
This budget measure from the government is simply a desperate act to try to plug holes in a fast deteriorating budget position. All superannuation funds are subject to a supervisory levy to fund the regulatory costs of ensuring funds comply with superannuation legislation. Separate levy arrangements apply to SMSFs and to registrable superannuation entities to recover the costs of their regulation by the ATO and Australian Prudential Regulation Authority respectively. The government claims, and the industry does not disagree, that the current SMSF supervisory levy does not fully recover the ATO's costs of regulating the sector. However, the industry would like the government to justify the quantum of this increase and also the issue relating to bringing forward the timing of its payment.
According to the government, the bill ensures that the ATO's costs of regulating the sector are fully recovered, but we are yet to receive any sufficient detail as to the basis of this cost recovery and the calibration of the fees represented by this bill. The explanatory memorandum merely asserts that the current levy does not fully recover the ATO's cost of supervision and does not provide any basis for the size of the increase. The bill also changes the law so that the levy is collected from SMSFs within the same income year for which the levy applies, with a date to be set by regulation. Currently a fee is payable a number of months after the year-end position following lodgement of the annual return.
While the government in MYEFO announced that it would increase the SMSF levy from $191 to $259, this further change impacts the timing of the payment, which results in funds having to pay a total levy of $321 in the 2013-14 year—as you have two payments because of the bring-forward to be paid in that year—and a total levy of $388 in the 2014-15 year. This is a blatant revenue grab. It reminds me that some state governments offer a 10-year motor vehicle licence, so that they suck in 10 years' worth of revenue in one year and then where is the revenue in the years that follow? This is all part of the fiscal fiction that there will somehow be a surplus this financial year. It is a blatant revenue grab and the bring-forward component simply plugs a worsening budget position.
The bill before the House amends the Superannuation (Self-Managed Superannuation Funds) Supervisory Levy Imposition Regulations 1991 to increase the threshold of the maximum levy payable by trustees of self-managed superannuation funds. This amendment will provide flexibility to increase the levy. We wonder where it will go to next. I feel the concern of the many who have self-managed superannuation funds as they express it to me: are they the next cash cow? Out of the various funds under management in the superannuation retirement income sector, the self-managed superannuation funds is the largest pool and for many in small business it is their pool where they seek to provide a retirement nest egg after years of toil—at the moment a lot of difficult toil in difficult economic circumstances. I cannot help but think that this Labor government sees that resource pool as a tantalising opportunity for a further cash grab. We watch with interest as the budget is being formulated. There has been lots of discussion about superannuation being the next cash cow to be milked to paper over this enormous budget difficulty that the government has got itself into. We wait to see. We watch with interest whether the government will seek to gouge this levy further by either escalating it with a higher ceiling or putting some other cost-recovery fee in place as it desperately looks for new taxes to pay for its worsening budget position.
This government is yet again hitting up the superannuation system to try and fix its own problems. Many remember former Prime Minister Rudd's assurance that there would be no messing with superannuation—'not a jot, not a tittle'. You can look at the references as to where that phrase comes from, but these are big fiddles that have happened in the superannuation industry. They show that that assurance provided by a Labor leader was completely empty, vacuous, and stood no chance of surviving when there is a dash for cash motivating so much of the government's decision making and policy development processes.
This levy is yet another impost in a long line of cost increases which have been incurred by our nation's superannuation system. Over $8 billion has been ripped out of super since Labor came to power in November 2007. These measures are the temporary reduction, the co-contribution matching rate, the reduction in concessional contribution tax limits, the changes to income definition for co-contribution purposes, the extending of the pause for indexation for the co-contribution threshold, and the further reductions in the co-contribution matching rate. They are haphazard changes and fee gouging. That is no way to run a superannuation system and build confidence in what is a long-term investment and commitment by those contributors and those that rely on their superannuation for their income today.
The coalition will not be opposing this bill, but we remain concerned at the government's justification for this support of this supposedly cost-recovery measure, given that there is no calibration to validate that in any of the material that has been provided to date. We are particularly vigilant in keeping a very close eye on the government as they size up the superannuation cash cow just to see how much they can milk out of it in the upcoming budget.