Thursday, 14 February 2013
Matters of Public Importance
I have received a letter from the honourable member for Casey proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The ongoing negative impact of the Government's superannuation tax rises.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places—
This matter of public importance really sums up the essence of this government. This matter of public importance highlights the government’s record of broken promises. This matter of public importance highlights the government’s monumental budget failure. This matter of public importance highlights Labor's absolute hatred of aspiration, self-reliance, choice and reward for effort.
Five years ago this week, it was the first sitting of a new parliament with a new government. The member for Griffith, who now sits over there, was sitting here at the table. His loyal deputy was sitting behind him. In the first week of 2008, a new Prime Minister had been elected and the government had changed on the back of a litany of specific promises. Think back to that time. In the days leading up to the election, the then Leader of the Opposition had declared himself to be a fiscal conservative and had declared that reckless spending must stop. That was more than $190 billion ago.
My colleagues behind me look back on that period and say that there was not a single Labor statement made in the lead-up to the 2007 election that has not been breached. If we were to mention every solemn promise, every declaration and every guarantee across every portfolio area, we would need an entire day of parliament.
When it comes to superannuation, we all remember—and, more importantly, the self-funded retirees of Australia remember—a cast-iron, solemn guarantee made on 12 November 2007 by the then Leader of the Opposition, the member for Griffith. It was a promise that there would be no changes whatsoever to superannuation if Labor were elected. That is the version in English. Here is the exact quote from the member for Griffith and then Leader of the Labor Party in an interview on Radio 4BC: 'What I find around the country is there's a whole lot of what I describe as whispering campaigns by the Liberals. I discover them here, there and everywhere. Absolutely not, there will be no change to superannuation laws, not one jot, not one tittle.' That solemn declaration was made 12 days before the election. It could not have been clearer.
Along with that solemn guarantee, the people of Australia can remember other solemn guarantees in every portfolio area. Whilst I said before that my colleagues and I would say that every single promise Labor made before the 2007 election was a broken promise, I have to say there is one exception. That was a statement made by the member for Kingsford-Smith about 10 days before the former Prime Minister's statement, and it is the only statement the Australian people can look back on and say, 'That was a true promise.' It was made in a moment of candour to radio journalist Steve Price when he had a conversation with the member for Kingsford-Smith at Melbourne Airport. Steve Price bemoaned the fact that the election campaign was turning into 'me-too' politics and that Labor was copying the coalition’s election promise. Steve Price said, 'I said to Garrett that it was turning into the me-too election. With a straight face, he replied that it would not matter because "once we get in, we'll change it all".' Hasn't that been the only true statement? 'Once we get in, we'll change it all.'
Superannuation is an area where they could not have changed it more from day one—not one jot, not one tittle. And they have changed it by $8 billion of new taxes—eight billion jots and tittles, to use the member for Griffith’s language. It did not take very long. In the 2009 budget, the Treasurer announced that the government would lower the cap on concessional super contributions and that it would reduce the superannuation co-contribution scheme. Let me deal with the second of those first. I know the member for Wentworth will know where I am going on this. At that time, it was said that the reduction in the super co-contribution would be temporary, because this was the time that temporary deficits entered the Australian language, more than four years ago. What turned out to be temporary was made less temporary the following year, then it was made permanent. That $1,500 co-contribution first reduced to $1,000. Then, finally, in the MYEFO of 2011, it went down to $500. It was a tax rise and a hit to the low-income workers that those opposite seek to preach about.
And then the concessional caps, the money that people could put into their superannuation, will go from between $100,000 and $50,000, depending on your age, down to $25,000.
Let us have a look at how those policies are impacting. In Labor's world they say they are attacking the rich. Everyone out there in the Australian public knows they are attacking everyday Australians. You could not get a clearer example than the super co-contribution—'not one jot, not one tiddle', from $1,500 down to $500, and the indexation removed to boot. Think of low-income workers trying to get ahead, making their contributions and getting a matching contribution. It was not anything that was criticised by those opposite during the Howard government but it was something they always had on their secret hit list. When it comes to the concessional caps, what about those in their 50s and 60s who might be in small business and want to save for their retirement? If they put in more than $25,000 a year, they get hit with the highest tax rate. This government is so ignorant it assumes they have an even income every year; it assumes their costs are the same every year. It is ignorant of the resources needed to build up a small business. They have been penalised and hit by this government. And what about a single mother who, in the years leading up to retirement, might want to put significant amounts of money into superannuation? That can no longer happen, because of this government.
Of course, it is only the beginning. We have seen in the last week Labor's determination to hunt around for even more taxes from superannuation. Last week we even had Labor figures warning against this attack on superannuation, and today we have had the news that private super is in the frame for a tax hit on self-funded retirees, those with self-managed funds. 'Not one jot, not one tiddle'? What we know is that, if this Labor government is ever re-elected, what they have done with superannuation in the last five years, to paraphrase Deborah Conway, will only be the beginning—because they have self-funded retirees in their sights just as they have those with private health insurance in their sights. All of this has come about, as I said at the outset, because of this government's monumental fiscal failure: 'Once we get in, we'll change it all.' And haven't they changed the budget in Australia! After saying reckless spending must stop when they had $45 billion in cash in the bank and a $20 billion surplus, they have now reached the point where they are scrambling around for more taxes to fill in the budget holes that they have dug as a result of their utter fiscal incompetence.
We have seen it on display right through this term and at the start of this final year of this term. You need only look at the Treasurer's failure on the mining tax as a subset of his failure on the budget—$126 million in half a year, when he is meant to be collecting $2 billion in the full year. I said the other day it was about $5.50 for every Australian. As someone pointed out afterwards, when you take into account the administration costs and the fact that that $126 million means company tax was not paid, I regret to say that I was exaggerating. It will work out something closer to a gold $2 coin—if someone can do the maths.
We can look at the temporary deficits that were announced back in 2008 and 2009, and at Treasurer Wayne Swan's accuracy. Look at last year's budget outcome. As I have said before in the House, back in December 2010 he said that the deficit would be $2 billion. By budget day 2011, he was saying no, it will be $22 billion. By the MYEFO in December 2011, he said it would actually be $37 billion. By budget day last year, it was $44 billion. Let us be generous and take out that first MYEFO after the 2010 election, and we have had a blow-out from $22 billion to $44 billion in one year.
I have said before in this House that, if Wayne Swan was competing in archery, the only safe place to be watching would be via your television. As I said the other day, the member for Bennelong also pointed out that it would be equally safe to watch standing directly in front of the target. Australian humour is a wonderful thing. We call people by nicknames. We call extremely tall people' Shorty' and we call short people 'Stretch'. I think we should call this Treasurer 'Bullseye' because of the number of targets he has missed. But the serious side is that it is the Australian people who are paying the price with higher debt and the $7 billion it costs just to keep that debt, not to pay a dollar off. And of course they are paying the price of the Treasurer's incompetence with higher taxes.
When they look back over the last five years and when, later on this year, they look back over the history of this Labor government, they will know that, for a re-elected Labor government, the history is the future. As far as superannuation goes, there is absolutely no doubt that this government will leave no stone unturned to jack up taxes.
We also know that every solemn guarantee is just a guarantee that they will break their word. 'Not one jot, not one tittle'—those solemn guarantees will be made again, only to be broken if Labor are re-elected.
I am quite fascinated by this MPI, because superannuation is so important to the opposition that, in the opportunity of a 15-minute contribution, not only did the member for Casey finish early but he spoke about the minerals resource rent tax, the budget, MYEFO and debt. He made lots of jokes and talked about leadership. In fact, he talked about everything and he talked quite slowly, which is fine, but he spent less than five minutes actually talking about superannuation.
This matter of public importance is so urgent that it has to be discussed right now, because the opposition have something to say. It took them less than five minutes. You can take that opportunity anytime. But, if you are going to come in here and talk about superannuation, you should talk about superannuation. Tell us what your policies are, tell us what your thoughts are and tell us what you are going to do for the Australian people.
Everyone watching the clock would have said: where was the contribution to the debate on super? There was not a lot there. This MPI is absolutely absurd. It is not only factually incorrect; it is completely wrong and it has more to do with cheap political scaremongering. That is what we get from this mob opposite. Those opposite come in here knowing that, all the way back, when the universal super guarantee—universal superannuation for all Australians—was put into place, put into the Australian economy, they opposed it all the way. They can never resile from that. The measure was opposed all the way by the opposition. They said it would be the end of the economy, that it was a massive con job and that it would never work. How wrong were they then and how wrong are they today?
Superannuation in this country represents the underpinning of our economy—$1.5 trillion in superannuation savings. People talk about the GFC and how it was a Labor government that had to come in and deal with the global financial crisis. We never predicted there was going to be a GFC, but we had put the building blocks in place. That is what good governments do, 20 years ahead. You look to the future and you say: what are the things we need to do today for the future? The universal superannuation guarantee was one of those things and we did that. It was opposed by this mob. They hated the concept. They absolutely detest the concept of universal super for ordinary people—just like they hated Medicare and just like they hate anything that gives anything to anyone. Their view is: look after the top one per cent and then it will trickle down. The top one per cent will then just throw out little bits of leftovers to the rest of the 99 per cent of those people in the economy.
You might have noticed this quite beautiful little chocolate rose, a Valentine's Day rose, that those opposite all gave each other. You might have missed it before, but they gave each other one of these roses. There is a lot of love for each other on the other side, demonstrated by the giving of roses to each other. But where is the love for superannuation? Where is the love for working people, the 99 per cent of people who actually need the support of superannuation so that they can also have a decent retirement—not an extravagant retirement but just a decent retirement, something underpinned by some of their own savings and by the wages they gave up when the deal was done? Just so people know, part of the money, the wage restraint and the things that were put into place, meant that workers forwent a wage rise. Part of the money went to their super and part of the money went to employers to ensure that they could afford it as well.
That was a good deal, a great deal, a historic deal, done by a Labor government. The reason it was done by a Labor government is that we actually believe in it. You have to start from a position where you believe in super. You want to support super and you want to build it and make it stronger so that, today, you can have $1.5 trillion in superannuation savings in this country. We have positive plans for super in this country. It does not matter whether you are in a retail fund, an industry fund, a not-for-profit or a for-profit fund. It does not matter which one you are in; you get the benefits. It does not matter whether you are in an SMSF, a self-managed super fund, or whether you are a self-funded retiree; we believe in superannuation and decent retirement savings.
But let me tell you what the policies are of those on the other side. They had 15 minutes to speak and they took less than five minutes. That was their opportunity to tell us all what they are going to do. This is the only policy they have: black and white, one policy. They will rip away the super tax concessions for 3.6 million of some of the lowest-paid Australians in this country, of which 2.1 million are women. Those are the facts. There is no question about it. So, when they see that they have a $70 billion budget black hole, they go, 'We have to fill the black hole; where are we going to get the money from?' They do not look at any fancy policy for where they are going to get the money from. No savings, no cuts—just take it straight off 3.6 million of Australia's lowest-paid workers. Take it off them. Now, $500 may not be a lot to the people on the other side of the bench who love each other so much, but let me tell you that it is a lot of money if you are a cleaner or somebody on casual wages or somebody supporting a family through a second income. That is why we are making the changes—because we believe in giving people a hand up, not a handout. This is something for their future, something for their retirement, something that they can actually rely on.
What does the coalition's policy represent? The other day I was at a conference and there was an opportunity for me to say a few things and for the other side to say a few things. They did mention they might tinker around with a bit of regulation, they might do something on industry boards and look at a whole range of fluff around the edges, but there was nothing for working Australians, nothing for 3.6 million of the lowest-paid Australians in the country.
Those opposite are the ones who put forward this MPI. They are the ones that supposedly think this is so important, the ones who have so much to say on super. Think about how much there is to discuss when you talk about super. Their contribution was less than five minutes—if they had something more to say they would say it.
Let's make a bit of a comparison. If they take away from 3.6 million people their 15 per cent concession, who are they going to give more to? Just the top one per cent. If you are lucky enough to be earning more than $300,000 a year, good on you—you are lucky. You have worked hard and you deserve that money—no objection. But they are the only people that the Liberal opposition want to see get a go at super and get the concessions and all the benefits that come with it. Their concessions are worth more than $7,000 a year, while for people on low incomes they are worth about $2,000 a year. Our proposal gives a little bit more to the majority of people at the lower end so they get a better shot at retirement. It does not take away the $7,000, but it halves it—$3,500 is still generous for the top one per cent of income earners.
In these debates you get all this mixing of fruits and vegetables, all these analogies about things. But the reality is that, if you are on $300,000 a year, you have choices, you have options. Super is not your only investment vehicle. It is a really good one but it is not your only one. You can choose from property, shares, cash, bonds, gold and so on. You have plenty of choice. You can choose the absolute best for your retirement. Again, good on you. Build up your wealth and contribute to the national economy. All those things can be done together. But it should not be done in a manner that is so unfair that it means 3.6 million of the lowest-paid working Australians have to pay for it—why should they?—by getting slugged an extra $500 a year. It is just not on; it is not fair. That is why the other side had nothing to say. What are they going to talk about—the fact that they are trying to skew all the benefits in one direction? I think even the top one per cent, those on $300,000 or more, would probably scratch their heads and say: 'Actually, we don't need that much help. Thanks for the concessions anyway, but we can probably do without them. We've got plenty of choices.'
If we stop there, you might ask, 'Are we doing enough for the superannuation system in this country in the long term?' I always say you have to keep doing things, you have to keep moving. It is not change for change's sake. That is not what it is about. No-one changes something for change's sake—I hear that inane argument. Where do they get this stuff from? Why do we go through all the pain and effort of negotiating and consulting with different industry groups and bodies who all have opinions, views and capacity? We do it because it is necessary. If you want a system that works in this country it must be, first of all, sustainable. It has lasted this long—more than 20 years—because it is sustainable. But it is not going to stay sustainable if you keep it the same as it was two decades or a generation ago. You have to move with the times. So you make changes because it is necessary.
Then you hear platitudes and arguments from the other side like, 'We should only have positive change, not negative change.' I would say the only negative policy is the opposition's. The Liberals' negative policy is to slug people more through their superannuation. A positive change is to change, as required, things such as concessions and caps, as we have done. There is a clear choice. When it comes to superannuation there are a number of things that you can do.
Let's be clear. We have made a number of positive changes, not just today, not just this year and not just since coming to government in 2007 but since the creation of universal superannuation, the super guarantee. We created that because we believed in it. We believed that all Australians should have a fair go and the opportunity to have a bit of a nest egg. The only people who used to get superannuation were those on very high incomes, the top public servants and people in other top-end jobs. The majority of Australians missed out and were wholly and solely reliant on pensions.
That is something else we did when we came to government. I will not speak long about this because I actually want to talk about superannuation, but it is important that we tie this in because it is related. We made the single biggest improvement and increase to pensions in this country that has ever happened, and we did that coming to government because we had made a commitment to older Australians that we would lift their rate permanently, not with one-off bonuses. The Howard government used to love doling out a little bit of cash to people just before an election. It was their common theme: 'Who do we need to placate? Let's throw a few little rags of money and a few cheques around the place and hope that that's all okay and everyone's happy.' That is one way of doing it. We thought there was a better way: to make a permanent increase, build it in and pay for it forever. Pensioners needed it and they appreciated it, and I know they have not forgotten it. The record of those on the other side stands for itself. They always believed it was a con job, and I would love to have the time to be able to tell you some of the words that were used in this place by people like Bronwyn Bishop and Tony Abbott. They were dragged kicking and screaming to do that. They hated it.
You have to think about this: where does this pathological hate come from? There is a lot of love on the other side but it is only for themselves. Where does it come from, this pathological hate of ordinary people—people who work, the backbone of the country, the people who dig things and make things, the manufacturers, welders, builders, concreters and cleaners? Where is a little bit of love for them? Where is a bit of love for farmers? Every day in here—I remember it really well; I always used to take note—you used to hear at least one of them say something about farming and agriculture. They have gone quiet. I have not heard those words for a long time. I will have to check with my colleagues, but I cannot remember the last time they spoke about a farmer. It seems they have moved on. They talk about the one per cent, the wealthiest. They talk about small business. But when it came to making it count, in here, they were quiet. When we moved legislation to reduce company tax for small business from 30 per cent to 29 per cent, guess who opposed it? You guessed it: they opposed it all the way. There was no way they were going to have a bar of reducing the burden on small business. The super guarantee sits at nine per cent—
Opposition members interjecting—
So they admit they opposed it 'because, because, because—excuse, excuse, excuse'. The reality does not change; they still opposed it. You opposed it; it does not matter why you opposed it. Go and explain it to small business. You opposed a tax cut for small business. You opposed superannuation increases.
Let me remind you of something we did.
The super guarantee sits at nine per cent but it ought to be higher; as a minimum base it is just a little bit too low. So we have already put this into place, and it starts 1 July this year: a rise in the contribution from nine to 12 per cent. That is an incredibly good thing. It is a fantastic thing. Who opposed it? Yep, you've got it: the Liberal opposition. They will oppose tooth and nail everything that comes into this place that is good for ordinary people, working people, people who contribute to the economy, people who pay their taxes, whether they are in small business or not. They will talk about farmers, but they have not for a long time; they must have forgotten about farmers; somehow farmers have just faded away, although we almost heard something about farmers today when they started talking about dams. Of course they oppose dams, they are in favour of dams—they have no damn clue! That is really where it is all at.
So when we talk about the things that are being done and have been done, who believes in super? Who builds super? Who sustains super? Who makes it something for all Australians—the wealthy, the not so wealthy and some of the lowest income earners—to share? It is this Labor government. It has been Labor governments in the past, in history, who have done this. Who opposes it every step of the way? It is the Liberal Party and the Liberal opposition. (Time expired)
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—
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)
With respect to the member for Boothby and the member for Casey, who moved this motion: what a load of nonsense; what a load of rubbish we have just listened to! Indeed, what a load of humbug and cant. You can be sure that the only existing plans to increase superannuation tax is the Liberal-National coalition's plan to reintroduce a 15 per cent supertax on 3.6 million low-income earners, of which 2.1 million are women. They are going to slug the hard-working families in our country; that is the signature policy that they are going to take to the next election. I would like to take you back to 1995 when the current Leader of the Opposition, the member for Warringah, Tony Abbott, said:
Compulsory superannuation is possibly the greatest confidence trick of the last decade.
That is what the current Leader of the Opposition said in 1995. It is in his DNA. He is the alternative Prime Minister and all that we have got from the opposition is just all this nonsense and rubbish because they know that the Australian Labor Party are the champions of superannuation. All that we have been listening to from the other side is just complete rubbish.
In fact, the coalition are just a collection of parties that have bad plans, plans they cannot even pay for except by slashing and burning and wreaking havoc on budgets, on families, on workers and looking after their rich mates. What about some explanation of the $70 billion black hole? No explanation from the Leader of the Opposition or any of his alternative economic team to explain that black hole. But I tell you what: they have sent a clear message to the people of Australia that the opposition are quite happy to look after their rich mates and give them a very, very rich tax cut—and I am talking about the likes of Gina Rinehart, Andrew Forrest, Clive Palmer, all of whom will benefit massively. They are the last people in Australia that we should be looking to give tax relief to, yet this opposition, as I said, wants to put a supertax on 3.6 million low-income-earning Australians—and I repeat—of which 2.1 million are women.
Labor is the party that is working hard to support families and to ensure a future for their children. Labor has been, and will continue to be, the champion for families and the superannuation. Labor is the champion of superannuation. It is the party that invented it. It increased it. The coalition has opposed it at every step of the way, and yet we have to listen to this lecture from that side of the parliament. It is absolutely breathtaking! It has obviously forgotten that it was Prime Minister Hawke and Prime Minister Keating who championed the cause of families and brought universal superannuation in over the screams of business, the rich and those whom those opposite support and give succour to. It is Labor who will continue to ensure that future generations will have a nest egg to assist them in their retirement phase of their life.
Superannuation needs to be sustainable and it needs to be fair; we, on this side of the House, will always ensure that superannuation remains fair and equitable. We will always act in the national interest and do what is right for the majority of Australian workers, not just for the privileged few in this country who are massively rich. That is what we have always done; we have looked after the workers in this country.
When we make changes to superannuation the majority of workers benefit, not the rich people in Australia. As many as 8.4 million people benefit today from the increase in super contributions from nine to 12 per cent that was initiated by our government. One in three low-paid workers, or 3.6 million, benefit from tax-free super contributions thanks to the Australian Labor Party and the Labor government. Australians contributed a record amount to superannuation over the past year and the outlook is strong, thanks to the Labor government's reforms. Australia's total superannuation savings are projected to be $500 billion higher by June 2037 as a result of the Labor government's superannuation policies.
We have removed the upper age limit on universal super contributions, which means Australians aged 70 plus can get universal super, and those opposite have opposed this. Our financial advice reforms have tidied up some of the worst practices in the industry and will give SMSF members greater confidence in advice. That is a good thing but it is opposed by the opposition. We have consistently provided draw-down relief to self-funded retirees. That is another good thing not supported by the opposition. In November last year we provided tax certainty for deceased estates by clarifying that we will amend the law to allow the pension earnings tax exemption to continue following the death of a pension recipient until the deceased member's benefits have been paid out of the fund. We will not make changes for change's sake. The Prime Minister has reiterated that the government will never remove tax-free superannuation payments for the over 60s. What is the Leader of the Opposition's commitment or lack thereof to superannuation, I ask?
The coalition never has and never will support superannuation. They will only attack our initiatives to help working families. As I said, the Leader of the Opposition has confirmed that he will raise taxes on 3.6 million Australians, including 2.1 million women earning up to $37,000. That is a national disgrace. The Leader of the Opposition has confirmed he will scrap the tax free low-income superannuation contribution. That is a national disgrace. This means nearly a third of workers will have their superannuation taxes increased by up to $500 a year under the opposition. God forbid if they get elected to this place on 14 September.
I restate that the Gillard government's rate of low-income superannuation contribution tax to zero for workers earning up to $37,000 puts the money into their super instead—not into the pockets of Gina Rinehart, not into the pockets of Andrew Forrest and not into the pockets of Clive Palmer. This will build the wealth of some of our lowest-paid workers by almost $1 billion a year, which will help take the pressure off the pension. Under the coalition, around one in three workers, or 3.6 million workers, would pay up to $500 a year more because of the coalition's plans. This is disgraceful. The coalition hates the idea of ordinary workers accumulating wealth. The only wealth they want to build is that of the billionaires I have referred to. The past few days have shown that the Leader of the Opposition is a dangerous policy lightweight, in my view, who has no vision for Australia's future prosperity and jobs in the Asian century.
A northern economic zone already cuts to shreds a network of dams that cannot be paid for except by attacking families. This is a coalition that simply does not care about the majority of Australians, a coalition that certainly does not care about superannuation, does not care about jobs and does not care about growth. I make no apologies for putting Australian jobs and growth first. I know that the Australian Labor government makes no apologies for championing jobs and growth in our country. Every decision that our government makes is about Aussie jobs and growth, not looking after the rich and privileged who do not need any further assistance from us to secure their prosperity.
To build on a combination of resilient economic fundamentals that are the envy of the world we have established solid growth, low debt, very healthy public finances, contained inflation, low interest rates and a gold plated AAA credit rated economy. That is what we have, yet every day we hear all this humbug from the other side attacking our economy when we are the envy of the world. And we are not done yet. We are investing in labour reforms for the future, the NDIS, Gonski and the NBN because we stand for an Australia where every child can get a quality education, where their parents can have a decent paid job and their grandparents can retire with a dignified income. Only a Labor government will ensure that.
I conclude by reminding this House that it is Labor who are the champions of superannuation. I do not believe for one minute that fair-minded Australians would think for one minute that the opposition is going to do anything to help them in terms of building their nest eggs. What they do know is that they are only going to look after the most privileged and richest people in our country, and that is a national disgrace.
I have got to hand it to the member for Reid for the 10 minutes of non-contribution to a debate when we have seen over the past two weeks that the government's magnanimous support of the mining industry with its ill fated and ill constructed mining tax has left far more in the hands of the mining companies than we could have ever hoped to achieve on this side of the House. Whilst they want to give us a lecture about superannuation and revisit history, I think they need to take a bit of a reality check on their economic credentials and success over the past five years.
It is with great pleasure that I stand here today to speak on this MPI and to speak about the negative impact of the government's superannuation measures and tax rises. Since coming to power this Labor government has relentlessly attacked Australians planning for the future by hitting them square on the nose with over $8 billion in extra taxes and revenue from superannuation.
The only reason this has been necessary is because we stand here and look at a government that has spent too much and wants to spend even more, and super is where the money is. It is not just me or my colleagues on this side of the House who have grave concerns about the future of superannuation under this government. I would like to quote the chief executive of Australia's largest bank, Mr Ian Narev, who warned in the Australian Financial Review today:
It is absolutely critical that we have a long-term position and certainty in superannuation.
He went on to say that super should not be used as a political football.
I say to the government opposite and to the Treasurer: it is time to put the ball down. Does the Treasurer not realise that in 2010 he said, and I quote:
… we think certainty is absolutely paramount when it comes to the retirement income system, and we want people to have confidence that they can save in the way in which they have in the past.
As I said earlier, we all know that this government needs all the tax revenue that it can get its hands on. That is not because the people of Australia have done the wrong thing over the past five years; it is because we have a government whose profligate spending has created a situation where they need to find money from every piggy bank they can get their hands on.
Let's look at some of their past efforts in the superannuation space, namely—and I think this is one of the most regressive steps they took—to reduce the concessional contribution caps from $50 in $100,000 to $25,000 across the board. They also reduced the government's super co-contribution for low-income earners and doubled the super contribution tax for high-income earners. In addition, they changed the definition of income in their favour to draft more superannuation earnings into the tax net. To follow on from this, the government's sequel now threatens self-funded retirees through even more taxes.
Yet on this side of the House we have an alternative plan, and that is to encourage voluntary savings—the very thing that Labor plans to discourage. I would like to touch on a couple of facts around self-managed superannuation because I think they are worth bringing to the attention of the House, and maybe it is worth the edification of my colleagues opposite. This is straight from the ATO figures that they collect from the annual returns from self-managed super funds. Eighty-four per cent of the members in self-managed super funds are between the ages of 35 and 64. They are the very people that we want to accumulate as much as they can into superannuation over the remainder of their working life so that they, are self-funded in retirement as much as possible. Bearing in mind that the cut-off limit for the asset test is nearly a million dollars before they no longer have a call on a part age pension, at $25,000 a year as a contribution, less contributions tax, it is going to take 50 years to get to that asset test limit, so we have some work to do.
In addition, 73 per cent of the members in self-managed super funds earn less than $100,000 per annum—hardly the rich and powerful, I might suggest. Self-managed super fund balances that have more than $500,000 over the period from 2003-04 to now have decreased from about 71 per cent to about 47½ per cent. It has shown the value long term of self-managed superannuation funds and people deciding to take responsibility for the management of their own funds. Ultimately, it means the more we have in super the less call we are going to have on government resources.
Australians are doing the right thing by saving for retirement, but they deserve stability in the rules and tax arrangements around superannuation. In the long term, how is this government going to pay for the additional age pension impost that will arise as a result of their short-sighted and short-term desire to fix the budgetary problems that they have created through no fault of the people who have taken the time to save money into superannuation? What would happen to the government's finances if there were no self-managed retirees? Self-funded retirement is the ideal outcome for any retirement-income strategy. The more people who are fully or partially self-funded, the more funds there are available to assist those who do not have the capacity to fund their own retirement. This is the risk with the short-term nature of some of the decisions being made by this government to prop up its budget revenue, resulting from its profligate spending.
In 2007 the Treasurer promised no changes to superannuation, but what have we not seen promised from this government? Labor cannot be trusted when it comes to superannuation or people's retirement plans, no matter how much they love to recount the history of superannuation. Everyone in this House now accepts that superannuation is a vital part of the future of this country, providing for retirement and a financial foundation for our future prosperity.
The Prime Minister promised there would be no taxes on super payments for those over 60 under the government she leads. This does not include ruling out increasing taxes on super savings or super earnings. Australians who are doing the responsible thing and planning for their retirement, and who want to contribute more than $25,000 per year in pre-tax contributions, are being taxed on the excess of that at 46½ per cent. I hardly think they are getting an enormous tax benefit at the expense of lower-paid Australians.
On this side of the House, as a contrast, we take a longer-term view. We consider that having an ageing population and an ever-increasing call on government resources in a wide variety of areas is effaced by a government whose only inclination is to continue to tax people with the very capacity to provide wholly, or at least significantly, for themselves.
The cruel irony of this is that the very people we should assist and provide a hand up to lose out because the government does not have the financial resources to adequately do so.
This all came about because we have a government that creates hurdles and disincentives to saving via super for those who want to plan for a self-sufficient retirement. The government applies ridiculously low concessional limits to superannuation while at the same time increasing taxes on those who have already done the right thing by seeking to become self-funded in their retirement. I am pleased to say that there is another way: you do not have to destroy Australians' retirement plans if you stop the waste.
People across Australia saving for their retirement have a clear choice at the next election: on one hand the coalition, which offers stability and certainty in superannuation arrangements; on the other, a repeat of the high-taxing, chopping-and-changing nature of the government's current superannuation strategy, which does little to give anyone confidence in the superannuation system. (Time expired)
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.
I am pleased to speak on today's MPI because, as we all know, this is a government that is living beyond its means. The Australian people do not deserve this government. They do not deserve a government that has increased taxes on superannuation by $8 billion. They do not deserve a government that has attacked the voluntary savings of low-income earners by drastically cutting the super co-contribution scheme. They do not deserve a government that continually ignores self-funded retirees, who are facing the prospect of their hard earned money being stripped away from them because this government cannot manage the economy.
If we look at what this Labor government has done since it got into power, what we see, despite protestations to the contrary, is attacks on superannuation funds. Since 2007, this Labor government has cut the government super co-contribution to low-income earners by more than $3.3 billion—from $1,500 under the Howard government to just $500. The Gillard Labor government has also increased taxes on voluntary savings by reducing concessional contributions from $100,000 under the Howard government to $50,000 and then to $25,000. If someone saves more than $25,000, including their compulsory and voluntary super contributions, they then have to pay the top marginal income tax rate of 46.5c in every dollar.
Labor's attacks on superannuation funds do not stop there. They are incapable of going through a single budget, or Mid-Year Economic and Fiscal Outlook process, without slugging super. During MYEFO last year the Treasurer announced the annual regulatory levy on self-managed super funds, regardless of the level of contributions or account balance, would increase by 36 per cent. This was supposed to raise an additional $320 million over four years. This tax change hurts more than 480,000 self-managed superannuation funds across the country.
But imposing $8 billion of increased taxes on superannuation was not enough for this government. They then decided to raise tax on every Australian by imposing the world's only economy-wide carbon tax. The people who got hurt the most were self-funded retirees, the very people who have worked all their life to make sure they had enough money with which to retire. Self-funded retirees did not receive a single cent in compensation when the carbon tax was imposed on them. This is just one example of self-funded retirees being ignored by this government.
These tax imposts have a necessary consequence of the government's gross mismanagement of the economy and failed projects such as a billion dollars wasted on pink batts and dodgy solar panel installations. On top of the accumulated deficit of $172 billion, the Labor government has $120 billion budget black hole as a result of promises they have made. Whether or not they say publicly they will not tax super further, the Australian public cannot trust them. We know how this Labor government works. They will promise and promise tax cuts and reductions and regulations before an election and then after do the opposite, as did the Prime Minister in 2010 when she promised there would be no carbon tax under a government she led.
The coalition is committed to the most efficient, transparent and competitive super system and that is what we will be working towards in government. This is a government without a plan. This is a government that determines the nation's future on the basis the streaker's defence, 'It seemed like a good idea at the time.' This is a government that has lost its way, frantically lurching from decision to decision, desperately trying to rebuild its tattered reputation and yet it cannot even govern itself. From court cases of fraud to ICAC in New South Wales, the ALP stumbles from crisis to crisis.
However, the losers in this comic opera are the people of Australia. Lost and forgotten by a government out of control, the people of Australia you know that you cannot spend if you do not have the money. They know a bad government when they see one. They also know that when you need to rebuild there is no better alternative than sane, sensible, and principled coalition government. That is what Australians need. That is what they deserve, not government by smoke and mirrors, not government that spends when it does not have the money, not a government that has lost its way. The coalition has a real plan and the coalition offers hope, reward, and opportunity.