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Thursday, 26 June 2014
Page: 7525


Mr BOWEN (McMahon) (12:43): This is the second time this bill has been before the House and will be the second time it has been before the other place, where it was rejected. The reasons for rejecting this bill have not changed, they have only increased. They have increased in the light of this government's deceitful and unfair budget. Last time this bill was before the House I went through the scare campaign run by the then Liberal and National party opposition in relation to the Minerals Resource Rent Tax. I pointed out that the Liberal Party and National Party, whether they be in opposition or government, have a great deal of difficulty in working out whether the Minerals Resource Rent Tax is a problem because it raises too much revenue from the mining sector or too little. They say it is a disaster because it does not raise enough revenue. They say it is a disaster because it has cruelled the mining industry in Australia. I put it to you, Mr Deputy Speaker, that both those propositions cannot be correct.

The now government says that we need to get rid of this because it does not raise enough money. If it does not raise enough money then how is it damaging the mining industry? We have heard all this before. It is a tired, old scare campaign which the Liberal Party conducts in opposition from time to time. We saw it when the then Hawke government introduced the petroleum resource rent tax. We were told that it would see the end of offshore exploration in Australia. The then shadow Treasurer, one member for Bennelong, John Howard, who used to hold the position of shadow Treasurer, argued that the petroleum resource rent tax would stop ventures proceeding and should not be proceeded with. The then member for Mayo, who went on to become the Foreign Minister of Australia, said:

The legislation is yet another example of this government introducing new taxes on the few productive industries we have left in Australia thereby inhibiting their development.

What a narrow, pessimistic point of view. What went on to happen was that that was implemented, enacted. The Howard government eventually came to office. The former shadow Treasurer became Prime Minister. Did they change the policy? No. It has raised for the Australian government since that time the equivalent in today's dollars of $39 billion. Does anybody suggest there is no offshore exploration going on in Australia because of the PRRT or there is no production going on in Australia because of the PRRT? Of course not, because it is a nonsense argument. Anybody who goes to the north-west of Australia or who knows anything about the resources sector in Australia would know that that is just complete nonsense.

This bill needs to be opposed for a whole range of other reasons as well because the government has chosen to continue their attack on working Australians through this bill. I want to first focus on the issue of retirement incomes, something which is quite topical in Australia. The Treasurer tells us we all need to work longer. The Treasurer tells us we need to have the longest working life in the world. He says we all need to work until 70 before we become—in his words—'leaners' on the Australian taxpayer by becoming age pensioners. He tells the manual labourers of Australia, the nurses, the policeman, the soldiers—people doing tough jobs—that they have to work longer, that they do not deserve the age pension until they turn 70 because it is not sustainable.

What is the Treasurer doing and what is this government doing to retirement incomes of Australians in this piece of legislation? They are making it harder, particularly for low- and middle-income earners to save for their own retirement. They are making retrograde steps to Australia's retirement income system, the most retrograde steps we have seen to superannuation in a long long time. When they were in opposition they promised no adverse changes to superannuation. What they have done is adverse change after adverse change.

The original MRRT repeal bill, which came before the House last year, proposed a delay in the increase in the superannuation guarantee. But it has got worse since then because the budget contained yet a further delay in the increase in the superannuation guarantee, which, in keeping with this government's typically chaotic approach, is not reflected in this legislation. But the government is going to come in, we are told, later today and move amendments to their own legislation to reflect their own budget.

Under the previous government and under the current law of the land, the superannuation guarantee was due to reach 10 per cent on 1 July next year. Now the government amendments will see the superannuation guarantee get to 10 per cent by 1 July 2018 when the original repeal bill had them getting to 10 per cent by 1 July 2017, so there is this constant delay to ensuring and helping Australian workers fund their own retirement. How does that make Australia's retirement income system more sustainable? How does that take pressure off Australia's age pension system? Of course it does not. It makes it worse and it is terribly unfair to Australian workers. It is also a particularly irresponsible measure. The increase in the superannuation guarantee and the establishment of the low-income superannuation contribution, which I will come back to later in my remarks, would have swollen Australia's national pool of savings and superannuation by $500 billion by 2037—a third of Australia's total output. So this is not a small amount of money we are talking about.

In relation to the age pension, Treasury analysis shows that a continuation of the previous government's policy settings would have resulted in a halving of the proportion of older Australians on the full rate age pension by 2050, moving Australians from the full age pension to the part age pension, which does two things: it makes our age pension more sustainable and is actually a positive way of dealing with the demographic changes in the Australian economy; and it gives people more opportunity to live their retirement without being entirely dependent on the welfare system, which is a win-win situation. But of course that is all far too sensible for this Treasurer, who says: what we are going to do is we are going to make it harder for people to save for their own retirement and we are going to make them work longer to boot. We are going to give them the longest working age in the world.

There is not one country in the world with a pension age of 70. And there is not one projected to have a pension age of 70 in the OECD by 2035, which is when this government is proposing to make Australians work to 70. And there is not even one with the projected age of 70 by 2050, which is what the Commission of Audit in effect recommended—with the possible exception, to be fair, of the Czech Republic, which has a formula to determine these things. So we have a Treasurer who says: you must work longer than anybody else in the world and I am going to make it harder for you to save for your retirement—and this particularly goes to low-income earners.

We hear a lot about superannuation tax concessions and how they should be protected. We hear a lot of rhetoric about that from those opposite. As they engage in the rhetoric, what they also do is launch an attack on low-income earners. When the Labor Party came to office in 2007, low-income earners received a tax concession on their superannuation savings of exactly 0 per cent. We looked at that and said that is not fair. High-income earners receive substantial tax concessions for their superannuation because they are saving for their retirement and that is fine. Why should high-income earners receive substantial tax concessions and low-income earners receive exactly 0 per cent tax concessions? That is just not fair. It is also bad policy for the nation to force low-income earners to rely on the age pension in their retirement. If you look at the combination of the low-income superannuation contribution and the rephasing of the increase in the superannuation guarantee proposed by the government, its abolition and the rephasing, we will see $75 billion less in retirement incomes by 2023, not that far away.

And this government has the hide to lecture Australians about how long they should work when it is undermining important advances in ensuring Australians of any income, be it low, middle or high, receive tax concessions for their superannuation. How can this government live with itself saying to low-income earners, to cleaners, to factory workers, to manual labourers, to clerical workers around the country: 'We are not giving you any support to save for your retirement. We are not going to give you any tax concessions, but high-income earners can get big tax concessions.' And it is worse, because the previous, Labor government said: 'We're going to make a few changes here. We're going to make the superannuation system a bit fairer. We're going to not only give low-income earners some tax concessions but pull the tax concessions for high-income earners back just a little bit in a fairly modest measure.' But what does this Treasurer do? He says: 'Oh, no, no. We're going to give those tax concessions back to high-income earners. We have a budget emergency apparently, but we can give high-income earners tax concessions on superannuation. But low-income earners, if they earn the princely sum of $37,000, we are giving nothing.' I say shame on this Treasurer and shame on this Prime Minister for treating the low-income workers of Australia with such contempt and such arrogance. That is an adverse change to superannuation if ever I have seen one. This is a government which treats hardworking Australians with contempt.

This bill does two things to retirement incomes. It delays the increase from nine to 12 even further than the original—although the member for Moncrieff is going to come in here a little bit later and move an amendment to his own bill in a typically chaotic fashion. Then we are going to abolish the low-income superannuation contribution. In the second reading speech, the Parliamentary Secretary to the Treasurer, the member for Moncrieff, said:

The government will revisit concessional contribution caps and incentives for lower income earners …

I thought, 'Okay, maybe they are rethinking—

… once the budget is back in a strong surplus.

So his message to low-income earners in Australia is, 'Just wait till we're back in surplus,' but for high-income earners it is, 'We're going to give it to you right away.'

Mr Thistlethwaite: Says everything.

Mr BOWEN: It says everything about this government, as the member for Kingsford-Smith rightly interjects. It shows their arrogance and contempt for Australian workers.

I want to particularly focus in these remarks on the impact of this regressive change on low- and middle-income earners in rural and regional Australia. There was recently a report which I found very interesting. Twenty-four of the 25 electorates hardest hit by the abolition of the low-income earners superannuation contribution are in rural or regional Australia. That makes sense when you think about the people doing the work in rural and regional areas, many of whom are working in agriculture or other sectors, many of whom would be Indigenous people, who are trying to save for their retirement. And this government says, 'Bad luck.' Twenty-four out of 25 electorates are in rural and regional Australia, and who are the parties standing up against this regressive change which hits rural and regional Australia? The Labor Party; the Greens, to give them their credit; the Democratic Labor Party, to give them their credit. The National Party? Nope. Perfectly happy with this. Any opposition from the National Party? Not a word.

This is the typical National Party behaviour. They are lions in the bush and mice in Canberra. They beat their chests in their electorates and say, 'We're going to stand up for rural and regional Australia,' and they come here and are as silent as church mice. We have 48 per cent of all employees in the seat of Cowper, held by the Assistant Minister for Employment, impacted by this change. We have 48 per cent in the electorate of Page, which was won by the National Party at the last election. The seat of Mallee has a very vocal member who is very strong in Mallee and very quiet in Canberra. Forty-seven per cent of workers in his electorate will be hit by the abolition of the low-income earners superannuation contributions. The National Party's leader, the Deputy Prime Minister, has 46 per cent of workers set to lose the payment. Have we heard a word from the National Party? Not a word. It just goes to show you that, when it comes to standing up for the interests of rural and regional Australia, the National Party is a wholly owned subsidiary of the Liberal Party. They are wholly owned and controlled by the Liberal Party. They were played like a fiddle and deceived over the petrol tax. Just as the Liberal Party deceived the Australian people, they deceived the National Party. On this change, which affects rural and regional Australia, not a word of opposition from those courageous members of the National Party.

The Labor Party will stand up for the workers in rural and regional Australia. The member for Hunter recently had rural Australia added to his portfolio as shadow minister for agriculture. He has been very active. As shadow Treasurer I say we will also be very strong in supporting the interests of those hardworking Australians in rural and regional Australia who are asking for nothing more than a small tax concession as they set their own income aside for retirement. This is what we see from the modern-day National Party. There is no Black Jack McEwen sitting over there. We do not see those days anymore. The National Party of Australia is now a wholly owned subsidiary of the Liberal Party.

The other constituency very adversely affected by the changes in this bill is the small business community. Again we hear rhetoric from the Liberal Party about how they are apparently the party of small business. This so-called party of small business, having won an election, is now increasing tax on small business in this very piece of legislation. They are increasing the tax rates on small business. How are they doing that? By changing the threshold for the instant asset write-off. I readily concede the instant asset write-off, if you have not studied these measures, does not necessarily sound like something which would be important to many small businesses, but I tell you it is. The change in the threshold increases the effective tax rate of a small business and increases their red tape burden. We are not going to cop any lectures from any government minister about red tape on small business while they are increasing the red tape burden on small business by reducing the threshold for the instant asset write-off.

What is the instant asset write-off? It says to small business that, if you make an investment in a range of things you might need for your small business, you can write it off quickly, with a minimum of paperwork and to improve your cash flow. When we came to office, the threshold was $1,000. We increased it to $6,500 in a measure which as welcomed by small business around the country. We went to the next election thinking: 'We could do better than that. We'll increase the threshold to $10,000.' What does the government do when coming to office? Reduces it back down to $1,000. What a slap in the face to Australia's small business people.

So, this is a government that is full of rhetoric on small business, and full of action, but it is adverse action, indeed. How can this government look small business in the eye and say to small business, 'We're on your side,' when they are increasing, in effect, the small business tax rate for Australians? The Nationals are quiet on the issue of the impact of this legislation on rural and regional Australia and the Liberal Party is quiet on the issue of defending small business.

It gets worse. We have also had the change to the depreciation of motor vehicles. Many a small business needs a car to get around the business. We allowed an immediate $5,000 deduction for a vehicle costing $6,500 or more. That is gone under this piece of legislation. So how can this government be seen as being pro small business when they are radically changing the instant asset write-off to the disadvantage of small business and increasing the red tape threshold?

The member for Kooyong, the Parliamentary Secretary to the Prime Minister, has been going around talking about how he is reducing the red-tape burden on Australian business. There is a lot of questionable things in that statement. I wonder if he is talking on this piece of legislation. I am sure that, even with the gag that this government has applied, he could get himself on the speaking list if he wanted. Let him justify to this parliament and to the small business community why they are increasing the red-tape burden. Let's have the small business minister speaking on this bill, explaining to Australian small businesses why he thinks Australian small businesses should pay a higher tax rate and with more red-tape burden. Again, the Labor Party will stand up for the small businesses of Australia.

The final matter that we will deal with in this particular piece of legislation is the attack on the cost-of-living support for Australians contained in this legislation. We see the abolition of the Schoolkids Bonus in this piece of legislation—$410 a year for primary school students and $820 a year for high school students. This adds up, if a family has two children, over the course of their schooling lives, to $15,000 of support. That is gone under this government. The Prime Minister comes in here on a daily basis and beats his chest about what he claims is a $550 reduction in the cost-of-living pressure on Australians—a figure which is questionable, in itself—but does he acknowledge that $820 a year, which is the rate for high school students, is more than the $550 a year that he claims in the relation to the abolition of the carbon price? And $410 a year for primary school students is in the same ballpark. So he gives with one hand—if you accept the premise of this proposition, which I do not necessarily do—but takes away with the other hand.

And that is before the assault on cost-of-living support for Australian families which is contained in the deceitful and unfair budget which the Treasurer delivered at that dispatch box about a month-and-a-half ago. We saw the impact of the changes to family tax benefit. If your child goes from six to seven years old, according to the Treasurer they become so much cheaper that the government can abolish the support through the family tax benefit. In my experience, children do not get particularly cheaper when they turn seven. Far from it.

That just shows again how arrogant and out of touch this government is. They campaigned on cost-of-living support and about how they were going to 'ride to the rescue'—the Prime Minister's words, not mine—of the Australian people and provide cost-of-living support for Australians across the board. They then came to office and they concocted a budget emergency to justify an assault—an attack—on the cost-of-living support for Australian pensioners.

They had the hide—the arrogance—to claim that this is not a cut to the age pension. The misleading nature of that statement is apparent to all. If your age pension is not being indexed fairly—if the budget is benefiting as a result—then that is a cut. The Prime Minister can deny it all he likes—he can argue it until he is black and blue in the face—but the pensioners of Australia know that this is a cut. The families of Australia know that the changes to family tax benefit are a cut, pure and simple. If you are receiving a family tax benefit now and your child is over six and you are not receiving it after this budget because your child is over six, you have suffered a cut.

That is what I mean when I say that the reasons for opposing this legislation have not reduced since it was last rejected in the other place. They have increased. They have increased because of the arrogant approach of this government. So the attacks have been on the retirement incomes of Australians and on the low- and middle-income Australians, making it hard for Australians to save for their own retirement. Australians are doing the right thing. They have been putting some money aside for their future. This government says, 'You're getting nothing; you are getting absolutely no support from this government.' That is the policy of the Liberal Party and the Nationals but they say, 'Don't worry; we'll revisit it sometime in the next decade. Don't worry; we'll remember you sometime in the next decade when we get back to surplus.'

They have not even made a commitment to do anything about it; they say that the issue will be revisited. That is simply not good enough and we will resist it in this House. We will resist it in the other house and we will resist it in the community. We will fight it. We will fight this government's attack on low-income earners. We will fight this government's attack on low-income earners because that is what we do; we defend low- and middle-income earners against the arrogant attack of this government.

This government was so deceitful in its election campaign. It was elected on a web of deceit, and that has been exposed in the budget, which we are still debating in this House a month and a half later. There are still many issues that we have not yet fully addressed in relation to the budget because it contains so many attacks on ordinary hardworking Australians, including to the retirement incomes of Australians, the delay in the superannuation guarantee charge increase, and the abolition of the lower income earners' superannuation contribution. It shows just how arrogant this Treasurer is when he says, 'You must work until you're 70 but I'm going to make it harder for you to save for your own retirement. I'm going to make it harder for you not to need the age pension. I'm going to make you work longer than anyone else in the world.'

The member for Moncrieff, in introducing this bill, had the temerity to say that these changes—the further delay in the superannuation guarantee—would not have been required if the bill had not been blocked by the opposition in March. I have no idea what he is referring to. That is a statement whose sophistry and lack of clarity is abundant, because there is no policy grounds for further delaying the increase in the superannuation guarantee, which is a clear breach of an election commitment. That is an adverse change to superannuation, which this government said they would not do.

Members opposite campaigned in their seats and said, 'There will be no adverse changes to superannuation if we are elected.' Well, further delaying the increase in the superannuation guarantee is an adverse change. This is a Prime Minister who can stand there without falling over in laughter and say that there are no broken promises in this budget; who can stand there and say this is not an adverse change to superannuation. The Australian people are smarter than that. They are smart enough to know that this is a Prime Minister who has completely gone back on many election commitments, including that one.

But, of course, that is the form of the Liberal Party, because the Liberal Party does not like superannuation. This Prime Minister, when he was a backbencher, said that superannuation was a complete con job. He said that in this House. This Prime Minister said in this House that superannuation was a complete con job. He wrote things about it in his book, showing his true views on superannuation, and now that he has the chance as Prime Minister of Australia he is attacking superannuation—superannuation which gives ordinary, hardworking Australians the chance of a more comfortable retirement income, not reliant on the age pension but reliant on the investment through their superannuation funds. This Prime Minister thinks that is a con job and he attacks it in his budget.

We will defend superannuation for low- and middle-income earners, because that is in the national interest. It is in the national interest because we want Australians saving more for their retirement through the superannuation guarantee. We want them getting fair tax concessions—not tax concessions greater than high-income earners, not tax concessions which are unaffordable, but fair, well-calibrated tax concessions for low-income earners that say, 'If you are a low-income earner and you are saving for your own retirement, you will get some support from the government just as high-income earners do.' That measure, as much as anything else this government has done, shows the arrogance and contempt with which they treat hardworking Australians.

Then there is the attack on small business, as I said, through the change to the instant asset write-off and the change to the motor vehicle depreciation rate. This government is strong on rhetoric on small business. It talks the talk, but it never walks the walk when it comes to small business. We will fight that. We will oppose it in this House and we will oppose it in the other house. We will fight this bill. It is based on a fundamental false premise.

As I said in my opening remarks, the Liberal and National parties cannot decide whether the MRRT raises too much money or too little. They try to walk both sides of the street and have it both ways, but they use it as an excuse for a fundamental attack on the retirement incomes of hardworking Australians and an attack on cost-of-living support through the abolition of the schoolkids bonus—which was never funded by the MRRT. It should not even be in this bill. If the government wanted to abolish the schoolkids bonus, they should have the courage to put it in a stand-alone bill, because it was never funded by the MRRT. How dare they include it in this bill. How dare they mislead the Australian people by saying that it is funded by the MRRT when the budget papers clearly show it is not. They had the hide to include it in this legislation—yet more reason to oppose this bill, and that is exactly what we will do. We will oppose this bill. We will oppose it because of fundamental values—values which tell us that the measures contained in it are unfair, are not in the national interest and should be resisted.