Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

My question is to the Minister for Superannuation and Corporate Governance, Senator Sherry. Will the minister guarantee that low- and middle-income families will continue to receive the $1.1 billion doubled superannuation co-contribution?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Firstly, I want to say, in a budget context, that this government is committed to a fiscally conservative and responsible approach. We inherited an inflation legacy from the previous government of underlying inflation running at approximately 3.6 per cent, which is well in excess of the band that the Reserve Bank has set in terms of containing inflation and containing upward pressure on interest rates. Higher inflation, a legacy of the previous Liberal government, leads to upward pressure on interest rates.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Mr President, I rise on a point of order. The question was whether or not families would continue to receive the $1.1 billion doubled superannuation co-contribution, not a request for a lecture about inflation—particularly when the Prime Minister has said that the buck stops with him. It is time for Senator Sherry to say yes or no.

Alan Ferguson (President) Share this | Link to this | Hansard source

Order! Senator Coonan, you are starting to debate the point of order. There is no point of order. The minister has only been speaking for some 40 seconds and he is allowed to expand on his answer.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

In terms of the new Labor government’s approach to budget, we are going to take a fiscally conservative and responsible approach. We intend to increase the surplus for the next financial year from one per cent of gross domestic product to 1.5 per cent. We intend to be fiscally rigorous and conservative—that is an election commitment that we gave, and we intend to take that approach.

In terms of superannuation issues, superannuation is an important add-on to the age pension; it is part of the second most important component of retirement incomes in this country. There is a three-tiered approach to retirement incomes. Australia is recognised by the World Bank as being a leading-edge country when it comes to its approach to retirement incomes. The first tier is the age pension, which I note the Labor government indexed to MTAWE—male total average weekly earnings. The second tier is compulsory superannuation—the nine per cent superannuation guarantee—which covers employees in this country and which the current Liberal opposition opposed vehemently when they were in opposition 20 years ago. The Liberal Party opposed the compulsory contribution—the nine per cent superannuation guarantee—which is an essential fairness measure to add to the retirement incomes of Australians. So it is a bit rich for Senator Coonan to come in here lecturing us about her hypothetical and imaginative changes that may be in the budget. It is a bit rich for her to give us a lecture when all those years ago her party opposed the most fundamental reform to the expansion of superannuation—the nine per cent superannuation guarantee.

Then we have what is known as the third tier to retirement savings in this country, which is additional voluntary contributions over and above the compulsory nine per cent minimum, which applies to employees. The third tier—the voluntary contributions—come about as a range of incentives that are included in our system. One of those incentives is salary sacrifice: the ability for those employees who are able to do so through their employer to divert some of their income into the form of higher contributions to superannuation. Then there is the co-contribution. The co-contribution currently provides up to $1.50 for one dollar of contribution. It is voluntary. It starts to reduce at an income of approximately $29,000 and phases out by an income of approximately $59,000.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. The minister obviously cannot say yes or no. During the last election, when exactly was it that Mr Rudd flagged the removal of the $1.1 billion superannuation co-contribution? Isn’t this just another broken Labor promise? Isn’t it a broken promise from an uncaring, mean and out-of-touch government?

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

Let me highlight the greatest broken promise in Australian history—and it did involve the co-contribution. In 1995 the then Labor government committed to universal co-contribution at a total cost estimated then of approximately $5-6 billion. The then Liberal opposition, of which Senator Coonan was a member, did sign up to that particular promise.

Opposition Senators:

No, she wasn’t.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

She wasn’t? We can excuse her for breaking—

Honourable Senators:

Honourable senators interjecting—

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

That’s right: she was a member of Labor Lawyers—I had forgotten. In the 1997 budget Mr Costello and the former Liberal government scrapped the universal co-contribution. So, rather than focus on alleged things that may or may not occur in the budget, you should have a little look back through history and look at the largest broken promise in Australian history when it comes to superannuation. (Time expired)