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Tuesday, 2 September 2014
Page: 9449

Mr CIOBO (MoncrieffParliamentary Secretary to the Treasurer) (18:02): I move:

That the amendments be agreed to.

The government has delivered on our commitment to both the 2010 and 2013 elections to scrap Labor's failed mining tax. The government moved amendments to the Minerals Resource Rent Tax (Repeal) and Other Measures Bill 2014 in the Senate in order to secure passage of this important reform.

Application dates for rephasing the superannuation guarantee and the abolition date for the repeal of the low-income superannuation contribution, the income support bonus and the schoolkids bonus measures were amended. In the interim a means test will apply to the payment of the schoolkids bonus. By doing so, we will forgo around $6.5 billion in savings. The government will look to ensure that the cost of these changes are recovered in the medium term through the rephasing of the scheduled increase of the superannuation guarantee.

This package of amendments would be budget neutral by the end of 2022-23 financial year. Given the paltry revenue raised by the mining tax to date, these changes to the mining tax package would still deliver around $10 billion in savings to the budget over the forward estimates. In fact Treasury modelling confirms that abolition of the complete mining tax package of measures would save the budget around $50 billion over the medium term.

The amendments to schedule 6 of this bill further extend the pause in the superannuation guarantee rate for an additional three years. The superannuation guarantee charge percentage will remain at 9.5 per cent up to and including the 2020-21 financial year. It will then increase by 0.5 percentage points each year until it reaches 12 per cent on 1 July 2025.

The government is making responsible changes to the phasing of the superannuation guarantee increase to ensure the sustainability of the budget in the current circumstances. Given that increases in the superannuation guarantee are funded from reductions in take-home wages and business profits, rephasing the superannuation guarantee will mean more money in the pockets of working Australians and will boost economic activity and job growth.

The amendments move the abolition date for the low-income superannuation contribution to 1 July 2017—that is, the low-income superannuation contributions will continue to be paid for contributions made until 30 June 2017.

A cut-off date for payments, two years after the end of the 2016-17 financial year, is being set to enable the commissioner to streamline administrative systems, reducing the administrative compliance burden. It should have minimal impact on the proportion of low-income superannuation contribution payments made. This goes further than the government's 2013 federal election commitment and provides certainty and stability while the government examines superannuation as part of a tax white paper and financial system inquiry.

The amendments in relation to schedule 8 move the abolition date of the income support bonus to 31 December 2016. The coalition made very clear in the lead-up to the last election that, if elected, we were committed to getting rid of the mining tax and all of the unfunded spending promises, including the income support bonus.

In relation to schedule 9, the schoolkids bonus, the amendments move the abolition date of the schoolkids bonus to 31 December 2016. In the interim, the amendments better target the schoolkids bonus by introducing an income test, to ensure that only families with an adjusted taxable income of $100,00 or less will receive the payment.

The government has ensured that the cost of the amendments to the low-income superannuation contribution, the income support bonus and the schoolkids bonus will be offset over the medium term by rephasing the superannuation guarantee increase. While the government's negotiated package will be budget neutral in the medium term, abolishing the complete mining tax package will save the budget around $50 billion over the next decade. The government agrees to the Senate amendments.