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Thursday, 29 November 2012
Page: 13895

Mr SHORTEN (Maribyrnong—Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations) (10:25): I move:

That this bill be now read a second time.

The Income Tax Rates Amendment (Unlawful Payments from Regulated Superannuation Funds) Bill 2012 imposes the superannuation fund non-complying tax rate of 45 per cent on those amounts that are released early from superannuation by illegal means.

The government's Super System Review found individuals who gain illegal early access to their superannuation benefits should not enjoy the same tax treatment as those who legally gain early access to their superannuation benefits. The review recommended that amounts released by illegal means should be subject to the superannuation fund non-complying tax rate of 45 per cent.

For example, if a person illegally accesses $10,000 of their accumulated superannuation savings via an illegal early release scheme, their tax liability will be $4,500 plus the Medicare levy (1.5 per cent). So the total tax payable on the amount accessed would be $4,650.

The review also found that stronger sanctions must exist to deter promoters of illegal early release schemes from undermining the government's retirement policy and harming members in the process. Schedule 1 of the Superannuation Legislation Amendment (Reducing Illegal Early Release and Other Measures) Bill 2012 amends the Superannuation Industry (Supervision) Act 1993 to ensure there are stronger sanctions.

This measure delivers on the government's announcement that it would impose the superannuation non-complying fund rate of 45 per cent on those amounts that are released early from superannuation by illegal means. This, combined with stronger sanctions, will provide an effective deterrent to the illegal early release of superannuation. I commend the bill to the House.

Debate adjourned.