John Madigan (Victoria, Democratic Labor Party) Share this | Hansard source

The Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 will remove what most Australians know as the mining tax. But what most Australian do not realise is that this bill also seeks to remove low-income super contributions. This bill will pause the superannuation guarantee and it will remove income support bonuses for the children of defence veterans, among other things. I acknowledge that when they went to the election the government said they would not meddle with the super of high-income earners, but what they did not tell the people on low incomes was that they were going to have a go at theirs. I, for one, support the government's intention to bring the budget back into the black—and I do realise that you cannot spend what you have not got.

Some time ago, under the previous government, we had a raft of bills slammed through the Senate. Of course, some of these bills were booby trapped like this one has been. But what I do not support is penalising hard-working, low-paid Australians through these changes to their super. It is one thing to ask people to work for welfare but it is another thing to rip away from them what little potential retirement savings they will have. What is more, last week Senator Ronaldson signed a regulation to remove the income support bonus for the Veterans' Children Education Scheme. Such a decision by the government is both insensitive and despicable.

It is for these reasons that I am asking the chamber to support my amendments to oppose both schedule 6 and 7 of this bill, and for parliamentarians both here and in the other place not to accept a pay increase from 1 July, to offset the costs of this small allowance to these children. When you think about it our annual pay rise, relatively speaking, is not a lot of money for those in the other place and in this place. But for these young Australians this money would make a big difference to their lives. As for the nation's political elite, all we have to do is ask the Department of Finance to redirect around $1,200 of our pay each year to this scheme—problem solved. Even if the government members and senators do not think it a worthy enough cause, I would be willing to pitch in with the ALP members and senators, who have been very vocal on this issue. After all, if media reports are correct and the yearly cost of 1,240 students receiving an education allowance under the Veterans' Children Education Scheme only equates to around $260,000, then each ALP member and senator, along with me, would only need to put in less than $3,000 from their own pay. When you take that amount of money out before tax, who is really going to notice it?

In regard to the super aspects of this legislation and my amendments which I intend moving in the committee of the whole, by opposing schedule 6 we are allowing many low-income earners to save up to a further $20,000 in today's terms in their superannuation, with the average being between $5,000 and $15,000. This has been forecast by Industry Super Australia to benefit some 3.41 million low-income earners. By opposing schedule 7 the chamber we would be telling about 35 per cent of working Australians that they do not need to pay more tax on their super than they do on their income. Industry Super Australia puts it clearly:

The low income super contribution operates as a tax offset, effectively refunding the contribution tax paid by low-income earners on their superannuation guarantee and other concessional contributions up to $500 per annum, thus allowing low-income earners to accrue a tax concession on their contributions like all other income earners.

By repealing schedule 7 of the bill, the chamber would be allowing low-income earners to save up to $27,000 in today's terms when accessing their super when they retire. If schedule 7 is not repealed, one in three working Australians will be left without any tax concessions from the government, despite having their super locked away until retirement. These are the Australians who need concessions the most. I think it is important for the chamber and the government, in particular, to realise that there was no pre-election commitment by the coalition to remove the low-income tax benefit and therefore I ask the government to reconsider its motives.

Finally, the government should allow some respite for low-income earners when it comes to super. After all, increased super balances now will decrease the pressure on taxpayer funded age pensions in the future. It is for those reasons I implore all senators to support my amendments.

In closing, when we guillotine legislation, when we think we have the upper hand and the pendulum swings one way or the other in this house, it is the result of bad legislation that did not raise the amount that we would have hoped it would have raised. In effect, the comment made by Senator Dastyari that the minerals of our nation belong to all Australians is quite true. Those people who seek to exploit our minerals, our finite resources, should pay for those resources, because they belong to each and every Australian.