Geoff Lyons (Bass, Australian Labor Party) Share this | Hansard source

I was interested to listen to the previous speaker. I suggest he look at the ratio of gross domestic product to taxation and see which was the highest taxing government in Australia's history.

I rise to speak on this matter of public importance regarding superannuation taxes. I would like to make it clear that the only existing plan to increase superannuation taxes is the coalition's plan to reintroduce a 15 per cent super tax on 3.6 million low-income earners, 2.1 million of whom are working women. Here in this House just a week ago, Prime Minister Julia Gillard made the point that it is only because of the Labor Party that superannuation is compulsory in this country. The coalition has opposed superannuation every step of the way.

Twenty years ago, under the Keating government, nine per cent superannuation was guaranteed to every Australian worker, a system that is today the envy of workers around the world. Labor acted to ensure that working people are taken care of in their retirement years, and we will continue to do that by increasing superannuation contributions from nine to 12 per cent.

As the party that commenced superannuation, Labor created national savings that became particularly important during difficult economic times, as we saw during the global financial crisis. In fact, despite the GFC, over the past 15 years the average growth fund in Australia has averaged 4.1 per cent above the rate of inflation. Those opposite are claiming that there are only negative impacts to be seen, but I know and the Australian people know that the Labor government has given them a distinct advantage with compulsory superannuation. Yes, it is correct that there is an additional tax on the superannuation of individuals earning $300,000 or more. Just 128,000 individuals were affected by this increase. However, the reforms to superannuation have only acted to benefit workers in this country; 8.4 million individuals will benefit from the increase from nine to 12 per cent super and one in three low-paid workers will benefit from tax-free super contributions.

This is in stark contrast to the Liberals, who have always acted to protect vested interests. The Leader of the Opposition has confirmed that a government he leads will scrap low-income super contributions. Our scheme cuts contributions tax to zero for workers earning up to $37,000 and puts the money into their super instead, building the wealth of some of the lowest paid workers in Australia. But the coalition is not interested in building the wealth of the average Australian worker, only that of billionaires. Without thinking twice, Mr Abbott, the Leader of the Opposition, will increase taxes on super for 3.6 million low-income Australians. This means that nearly one-third of workers will have their superannuation taxes increased by up to $500 a year under the opposition.

Of course, we should not be surprised by the disregard that the Leader of the Opposition is showing to Australian workers and their families. We know that he will scrap the schoolkids bonus and leave 1.3 million families worse off. We know he will rip $600 million from the Tasmanian economy through changes to the GST that he has promised in Western Australia. It seems ridiculous to trust a Liberal government with the retirement savings of a nation. They have never supported it and never believed in it. Their only plan for superannuation is to introduce a 15 per cent super tax on 3.6 million low-income workers. Indeed, in 1995 the Leader of the Opposition made the statement:

Compulsory superannuation is possibly the greatest confidence trick of the last decade.

I strongly disagree with this statement and I believe that Australian workers who benefit from compulsory and universal superannuation would disagree too.

Superannuation is a critical part of the Australian economy. It is the largest source of long-term savings in Australia and the second most significant source of wealth for many Australians after the family home. I am personally only too well aware of the poor economic management of the Liberals when it comes to superannuation. I was a manager at Beaconsfield hospital back in the eighties, when Robin Gray, then Liberal Premier, gave public servants a pay rise and proceeded to say that they could not have the pay rise; it had to go into superannuation. So I drew the cheques, as those responsible for those matters did at the time, and sent them off to the retirement benefits fund. The retirement benefits fund sent the cheques back to me, saying: 'This was only a notional pay rise. It was unfunded.' So the Liberal government gave public servants a pay rise but did not fund it. I am thankful to Robin Gray for that. I took out a private super scheme because I thought, 'The Tasmanian economy is going to be broke when I get to retirement.' That private super scheme allowed me to retire in March '09. I would not have been able to do that if I had not taken out that private scheme. I thank Robin Gray for the incentive. It just shows that the Libs have no concept of how to run a super scheme. They talk about the economy. When you are going into a worldwide recession, it is all a matter of timing. When you put the incentive in, you have to do it early and you have to do it right. I tell you what: the Australian economy is much better off from doing it right and providing incentive and jobs.

Today in this House we have heard much from those opposite about 'negative impacts'. What has not been mentioned are the negative impacts that will stem from their opposition to this increase in super contributions. They are risking the retirement years of millions of Australians and forcing Australians to pay more for the age pension.

Under the Labor government, the superannuation system is fair and sustainable. Reforms to superannuation will only serve to make the system fairer by ensuring that tax incentives for super are more even across the income ranges. There is nothing fair about the coalition's plan to slug 3.6 million low-income earners and part-time workers with a tax increase. There is nothing fair about scrapping the low-income superannuation contribution and increasing super tax for a third of Australian workers by $500 per year. Only under a Labor government will superannuation remain fair and sustainable. We will not make changes for changes sake. We will never remove the tax-free superannuation payments for over 60s.

What we will do, what is right, is that we will protect the pool of national savings created by superannuation and protect the retirement savings of hard working Australians and their families. Compulsory superannuation is in the nation's best interest and in the best interest of workers, ensuring that Australians build their own capacity to have lifetime income security. Labor will guarantee a superannuation system that is fiscally responsible, a system that ensures Australians will not have to work hard for their entire lives only to retire poor and a system that does not expect young Australian workers to support retirees.

This is a unique Labor goal and one that we cannot afford to entrust to the Liberal government. While they are talking about the economy and how they are such great managers, when I studied economics five per cent unemployment was full employment and still they talk about the negativity of the Australian economy. Really, we are the envy of the world. I know it is tough for some but this superannuation scheme is the best—

Mr Briggs interjecting—

Talk about Tassie? When are you going to give us a promise in writing that you are going to protect the GST income of Tasmanians? When are you going to do that? Remember, we cannot trust his word, we have to get it in writing.

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