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Thursday, 25 November 1999
Page: 12695

Mr ROSS CAMERON —My question is to the Minister for Community Services. Could the minister outline to the House the benefits to self-funded retirees flowing from reforms to capital gains tax being introduced by this government's new, innovative business tax system?

Mr ANTHONY (Community Services) —I would like to thank the member for Parramatta because I know that not only is he a fine member but he is very concerned about his self-funded retirees and the elderly people in his electorate. He knows, like all Australians know, that this business tax reform package, which has been put through, is great news for self-funded retirees and is great news for elderly Australians.

One of the major benefits that the Treasurer has negotiated in the business tax package is that there will be increasing levels of savings and contributions towards superannuation funds and also towards private savings. I think all of us would agree that, if we can encourage private savings, then we can start to encourage greater self-reliance in people for their own retirement. If we can have greater self-reliance and a greater incentive for people to plan for their own retirement, then it means a lesser burden on the social security system.

The other measure which the Treasurer clearly articulated is the enormous benefits, particularly for older Australians, with the capital gains tax changes. If you have been holding a business asset for longer than 15 years, you sell it and you are over the age of 55, then all that now will be subject to capital gains tax relief. I think that is a tremendous benefit to people in regional Australia and also in urban Australian areas such as the seat of Parramatta.

One of the great benefits with the new business package is the effective rate on capital gains towards superannuation funds which will now only be 10 per cent, as opposed to 15 per cent, which of course was introduced by the Australian Labor Party. This will mean superannuation contributions will have a greater return to members. Likewise, self-funded retirees will have a further benefit because of the self-refundable imputation credits. This is very good news and it is also good news for the 1.5 million pensioners, in light of the many investments that they have in mutual funds, because their returns will be higher and they will get greater remuneration. So without question the coalition's business tax reform package is a huge leap forward for all Australians.