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Thursday, 24 June 2004
Page: 31591


Mr ROSS CAMERON (Parliamentary Secretary to the Treasurer) (8:37 PM) —I move:

That:

(a) the House insists on disagreeing to the amendments insisted on by the Senate, and

(b) in place thereof, the Government amendments, as set out in the schedule circulated to honourable Members, be agreed to.

The schedule read as follows—

(1) Clause 2, page 2 (table item 3), omit the table item, substitute:

3. Schedule 1, items 5 to 7

1 July 2008.

1 July 2008

(2) Clause 4, page 3 (line 2), omit “2010”, substitute “2008”.

I want to begin by expressing my thanks to the member for Kennedy who, with characteristic courtesy, has allowed us to intervene in the flow of debate. The government again opposes the Senate amendments to the Superannuation Laws Amendment (2004 Measures No. 2) Bill 2004. These amendments would bring forward the commencement of a measure contained in the bill relating to the superannuation guarantee earnings base from 1 July 2005 to 1 July 2010. The government believes that this proposal is impractical. It also runs the risk of reducing employees' wage growth more sharply to offset increases in superannuation payments. The House considers that a longer transition period would provide greater capacity for employers to increase superannuation payments through increased productivity, thereby not adversely affecting employees or employers.

I am moving amendments on behalf of the government to the Superannuation Laws Amendment (2004 Measures No. 2) Bill 2004 to insert new commencement and application clauses for the measure relating to the simplification of superannuation guarantee earnings base provisions. Amendments (1) and (2) will bring forward the implementation date for the simplified earnings base measure from 1 July 2010 to 1 July 2008. The opposition's amendment of 1 July 2005 is likely to be impossible for some businesses to meet. The government considers that the originally proposed start date of 1 July 2010 would have allowed for the smoothest transition to a simplified superannuation guarantee system.

The government is disappointed that the Senate has rejected the concerns of the Australian Chamber of Commerce and Industry in relation to the ability of employers to satisfy this unreasonable time frame implementation period. I note the irresponsible attitude of the opposition in proposing the 1 July 2005 commencement—that is, the Labor Party believes the date is appropriate now and will leave the government to fix up the resultant problems for business at a later time.

The government is committed to increasing equality for both employers and employees in the retirement income system. The government wants to see greater equity for employees in the superannuation guarantee arrangements but recognises the need to moderate the impact on some businesses. For that reason, reluctantly, the government proposes to amend the commencement date to 1 July 2008 for this measure. A commencement date of 1 July 2008 will allow at least one industrial bargaining cycle for employers and employees to consider and incorporate these changes into the bargaining process. A transition period of less than four years runs the risk of reducing employees' wages growth more sharply to offset increases in superannuation payments. The transition as proposed provides greater capacity for employers to meet the increase in superannuation payments through increased productivity, thereby avoiding adverse effects to employees and employers.

When the superannuation guarantee system was introduced, the rate increased gradually over 10 years to ensure that the labour market was not undermined and that the increases in superannuation costs could be paid out of productivity increases. I note that even businesses with access to grandfathered earnings bases still faced increasing superannuation costs over this period as the rate rose. The approach of the government is consistent with the original superannuation guarantee approach. In the interests of ensuring passage of the Superannuation Laws Amendment (2004 Measures No. 2) Bill 2004 and its very important measure to simplify the superannuation guarantee earnings base provisions, the government moves the amendments to bring forward the date of effect from 1 July 2010 to 1 July 2008.