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Thursday, 1 June 1989
Page: 3283

Senator BISHOP(10.00) —In his remarks, the Minister for Finance (Senator Walsh) said that he did not believe the Opposition was serious in pursuing these amendments. I can assure him that the Opposition is serious. He said that the fundamental thrust of this part of the package was to encourage investment in imputed dividend shares. One of the concerns the Opposition has is that the superannuation area must have a prime reason for legislation to be passed, that being that we want more people to enter superannuation funds, with a larger percentage of Australian citizens being involved. There is a need for more people to be attracted into superannuation in order that they can be more self-reliant in retirement. One of the groups of people who have to be attracted in if this is to be achieved are those on the lower marginal tax rates. The figures speak for themselves. We have 3.6 million Australians in superannuation funds. In the private sector only 39 per cent of employees are in superannuation funds whilst in the public sector some 67 per cent of people are in superannuation funds. As I have already pointed out, it is possible for the public sector to avoid paying that 15 per cent investment tax simply by not funding its schemes. If the private sector tried a similar sort of system, then there could be great problems.

Going back to the point I was making previously, there is a need to attract into superannuation schemes those people who are on the lower marginal tax rates. This package simply does not do that. A tax advantage is needed to make the package attractive. People are being asked to forgo the enjoyment of spending money that is in their hands today and to put it aside for their retirement, in the meantime making those funds available for savings and investment. The decision to do that has to be encouraged by giving people a tax advantage. For people on the lower marginal rate that advantage is simply not great enough. Excising this 15 per cent tax we believe will make superannuation more attractive to this group of people.

Question put:

That the amendments (Senator Bishop's) be agreed to.