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Wednesday, 11 September 1996
Page: 3260

Senator SHERRY —My question is directed to the Assistant Treasurer and relates to the 15 per cent superannuation surcharge. Does the minister accept that superannuation funds with hundreds and thousands of members and who may have only a few of their members in the levy category will have to go to the trouble and cost of investigating the contributions of all of their members, convey all of that information to the tax office, assess levy liabilities provisionally, make a payment to the tax office and ultimately return moneys overpaid to the tax office back to members' accounts? Will the minister guarantee that the administrative costs of this will be borne by those high income earners and that the lower and middle income members will not have to bear the extra administrative costs?

Senator SHORT —The government's decision in the budget to impose a 15 per cent surcharge on contributions for higher income earners has been universally accepted and welcomed as making the superannuation system much more fair and equitable. I think even Senator Sherry accepts that point. It is something that Labor, throughout its years in government, steadfastly refused to do. Indeed, the inequities and excessive concessionality in the system for higher income earners were two of the major flaws of the previous government's system.

So far as the administration arrangements for the 15 per cent surcharge are concerned, Senator Sherry is broadly correct in terms of the mechanics, but they are still being finalised. The government is having discussions with the superannuation funds and with other interested parties and will be doing all we can to ensure that the administrative costs are minimised.

We have deliberately chosen the course that we have so far as administration is concerned so that we will be imposing no additional burden whatsoever on contributors or employers. It is true—we have acknowledged it up front from day one—that there will be some administrative costs imposed on the funds and there will be also additional work imposed on the Australian Taxation Office. We have resourced the Taxation Office to take account of that.

The additional administrative costs and activities will vary from one fund to another, but I can assure the Senate that much of the wild, speculative rumour running around about how much additional burden will be imposed on the superannuation funds in their administration is just that—rumour. It is speculative, it is unsubstantiated and you will find that many of the funds are in fact supportive of the arrangements because, as the government moves further down the superannuation route in terms of co-contribution and employee contribution, many of the steps they will have to take as a result of this budget's decisions will stand them in extremely good stead. In fact, they would be required for any future activities.

We are making the situation more efficient. We are going to minimise the administration costs. We are negotiating and discussing that with the funds. I have held two seminars in the last week with major players in the industry. There is, I think, a growing understanding of the situation and a growing understanding of the fact that not only is the arrangement fair and equitable and produces, therefore, highly desirable benefits in the superannuation system but also at the end of the day we will have a more administratively efficient superannuation system.

Senator SHERRY —Are you aware that there are 15 million superannuation accounts and that the additional administrative costs on superannuation funds may well exceed several hundred million dollars? Will you name a fund that has welcomed the administrative arrangements for this new superannuation surcharge?

Senator SHORT —In the discussions I have had in the last couple of weeks with some of the associations and some of the funds, they have accepted that the changes we are proposing and requiring for them in terms of administration will improve their efficiency, both now and in the future. In relation to the additional costs to the funds that Senator Sherry is peddling around, that is a wild, totally speculative, unsubstantiated figure. It is not possible—and Senator Sherry well knows that it is not possible—to put a figure on the amount until all the final negotiations and discussions have taken place. He knows that full well. (Time expired)