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Tuesday, 30 November 2004
Page: 30

Senator McGAURAN (2:18 PM) —My question is to Senator Coonan, the Minister representing the Minister for Revenue and Assistant Treasurer. Will the minister advise the Senate how the government's superannuation co-contribution scheme is benefiting hard-working, low- and middle-income earners? Is the minister aware of any alternative policies detrimental to these benefits?

Senator COONAN (Minister for Communications, Information Technology and the Arts) —I thank Senator McGauran for the question. As senators will remember, the superannuation co-contribution was introduced by the government in the face of determined opposition by Labor senators. The policy was designed to help low-income people save for their retirement, and it is with a great deal of pleasure that I am able to inform the Senate that the Australian Taxation Office is about to roll out the first round of payments from the government's superannuation co-contribution scheme. I am advised by the minister that the ATO can already confirm that some 215,000 middle- and low-income earners are eligible for a co-contribution payment and will be receiving a direct contribution from the government to their retirement savings. As a result of these payments, a total of $110 million will be injected into Australia's retirement income system, an average of $510 a person. To put this into context, for a person on $28,000 a year making these contributions over a 30-year working life, the government's contribution will increase their superannuation balance at retirement by $54,000. This is a very powerful incentive and is of great assistance to Australians on low incomes who want to do the responsible thing and save for their future.

Introducing and then significantly enhancing the co-contribution scheme were policy achievements of which we can be truly proud. The enhanced co-contribution scheme meant that from 1 July 2004 low-income earners earning up to $28,000 who contributed to their super became eligible for an extended government co-contribution of $1.50 for every dollar contributed, up to a maximum government contribution of $1,500. For a person earning $25,000, receiving the maximum co-contribution over 30 years will boost super by 86 per cent, or $106,000 in today's dollars. For a person earning $36,000, the improvement is 28 per cent, or $51,000 in today's dollars. These policies are in very stark contrast to those of the ALP, which sought to plunder Australia's retirement system to the tune of about $4 billion to pay for its unfunded promises during the last election campaign. Labor proposed that the co-contribution be completely scrapped, effective from 11 October 2004—just wiped out. They were too ashamed to be honest about it and hid it up the back of their tax policy as a savings measure, robbing the future to fund their election promises.

Senator COONAN —Senator Sherry, who was of course credited as the author of Labor's superannuation policy—if indeed he was—should be ashamed of the superannuation policies that the ALP took to the last election. Labor simply wanted to remove the incentives which the government had put in place for low- and middle-income earners, and they also wanted to discourage higher income earners by increasing the superannuation surcharge.

These policies were a prime example of just how badly out of touch the Labor Party have become. They are particularly out of touch with those on low incomes, who of course have a right to save for their retirement, who should have an incentive to do so and who have every right to expect the government to provide that sort of assistance. This week we heard an apology from Senator Conroy. I wonder whether Senator Sherry is going to apologise to the Australian people for having a superannuation policy that simply robs Australia's retirement system. I do not know whether Mr Latham will be asking Senator Sherry to apologise for punitive superannuation policies, but the Australian people know that the coalition government will continue to support retirement savings for Australians. (Time expired)