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Thursday, 14 February 2013
Page: 1479

Dr SOUTHCOTT (Boothby) (15:45): I am very pleased to speak on this matter of public importance which has been moved by my friend the member for Casey. It is on a very important issue, which is the ongoing negative impact of the government's superannuation tax rises. When you get out into the community, as I did last weekend, what you find is enormous concern about what the Labor Party are doing, yet again: shifting the goal posts on superannuation. And it is one of the commonest things that you hear from self-funded retirees and people who are approaching retirement: they just want some certainty and some stability in the area of superannuation.

Superannuation is a very important part of our retirement income framework. What we have is a system whereby you have an old age pension, which is targeted, income tested and asset tested; you have the compulsory superannuation; and you have additional savings on top of that. The old age pension is the ultimate safety net. But the important thing is that for most people it is going to be compulsory superannuation—but that will not be enough to retire on; what you need is incentives for voluntary contributions to super to ensure that as many as possible can look after their own retirement rather than rely on the pension.

When we were in government and we had intergenerational reports looking at this, they found that the Australian system—of a targeted pension, a compulsory system of super, and additional voluntary savings—was a good system and that we were unlikely to have the pressure on future budgets from increases in age pensions that a number of comparable countries like the United Kingdom and Canada were going to have.

There are estimated to be half a million self-funded retirees in Australia. In my electorate of Boothby almost 20 per cent of residents are aged over 65, and every one of these superannuants will be adversely affected by the government's constant tax hikes on super. Thirty-nine per cent of the electorate are over 50—that is more than 50,000 people—and all of them are putting money towards superannuation. What this government has done is to make it harder, not easier, for people to make a contribution to their retirement incomes.

The problem, really, is that, since the government has come in, we now have a budget which is in such disarray that they now look for easy targets to tax to pay for all of their spending. Private health insurance is just one. Medical research is another one which has been targeted. And now we read in the Australian, 'Private super in frame for tax hit'. Many people see superannuation as their nest egg. The Labor Party has always seen it as a golden egg which they need to repair their budgets.

People doing the right thing and saving for their own retirement so that they will not create an additional burden on taxpayers in the future need to be encouraged and supported, and instead the government always wants to punish them. Labor, as the previous speaker said, will say one thing before the election and do another thing after. When they came to power they were not going to change super; they were not going to touch super—not one jot; not one tittle.

It was Peter Costello, Australia's greatest treasurer, who summed it up perfectly, recently, when he said, 'Let us be clear—

Mr Lyons: He's the one who said Tony couldn't count!

Dr SOUTHCOTT: Well, he delivered 10 surplus budgets; I think that is a few more than you are going to deliver, brother. Peter Costello summed it up perfectly, recently:

… let us be clear. Labor's problem is not superannuation. It is spending.

And their problem is that their spending is out of control, and to repair their budget they now have to look at private health insurance and superannuation, and people who are doing the right thing, people who are showing some independence and self-reliance, are now getting hit. The government's budget is in chaos. There has been $155 billion in net government debt as at October last year. What the Labor government wants to do is punish hardworking Australians to pay for their own government mistakes and incompetence.

Ask yourself this question: would the Labor Party be attacking superannuation if they had not wasted billions of dollars on pink batts, school halls and GP superclinics which have never been built? As to their failed mining tax—we have not heard a lot about the mining tax; we did not hear a lot about the mining tax in the previous contribution—it has raised only $126 million. That is less than 10 per cent of what was projected.

So the Labor budget is in dire trouble and they are attacking retirees' super to dig themselves out of it. Even former Labor finance ministers are attacking their policies. Peter Walsh, the ALP finance minister from 1984 to 1990, was quoted recently as saying:

When you look at trying to get the budget into a better position, there are many savings and waste Labor could target to address that problem without redesigning super taxes.

In the later budgets of the Howard and Costello government, we were able to introduce a number of generous concessions for superannuation to allow self-funded retirees to continue in the workforce and address the poor workforce participation that we saw for workers over 45.

What we need the Labor Party to do is come clean on the super changes that they are planning to make. They need to be up-front about their increase in taxes on those who are saving for their superannuation; people need to know what they are likely to face. We have seen the government, in just 5½ short years, already impose more than $8 billion in additional taxes on the superannuation savings of Australians. Since they came to power in 2007, they have announced 23 major changes to superannuation rules. Not one jot, not one tittle.

We have heard a lot from the previous government speaker, the member for Oxley, about concern for workers and those on low incomes. I would just say one thing: what happened to the co-contribution? The co-contribution was there for workers on low incomes and, since the government has come in, it has cut $3.3 billion by reducing the government's superannuation co-contribution for lower income workers. It cut it from $1,500 under the Howard government to only $500. It has also reduced the concessional contribution caps from $50,000 and $100,000 down to $25,000, and this has been an effective increase in the taxes on voluntary super savings. This is particularly concerning to people who are approaching retirement, because they have suddenly found that it is almost impossible to make the contributions to superannuation to provide for an adequate income in retirement. What the government has done means that anyone making more than $25,000 in voluntary contributions now has to pay tax at the full marginal rate.

The coalition understands the need for stability in superannuation. The coalition finance team met with senior superannuation industry stakeholders and experts this week. The shadow Treasurer and the shadow minister for superannuation discussed the Labor threats to superannuation. But more importantly, they confirmed that the coalition will not make unexpected and detrimental changes to superannuation in government. We need to give people who are saving for their retirement the ability to plan in confidence. We have also confirmed that we will not rescind the increase in compulsory super from nine per cent to 12 per cent, we will not proceed with any other measures attached to the failed mining tax and we will release a policy before the election that encourages increased savings by Australians across all income brackets.

There is enormous concern in the community about what the Labor Party is planning for superannuation, and retirees and superannuants face a clear choice when it comes to the next election. (Time expired)