Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

I thank the honourable member for Kingston for his question. As he knows, in this year’s budget, the government handed down the most bold and visionary reform to superannuation that we have ever seen in Australia, to apply from 1 July 2007. We said we would consult in relation to transitional details, and we received 1,500 written submissions in August and 3,500 phone calls. Today I have announced the government’s transitional details so that the plan can now be enacted with legislation to be introduced before the end of the year.

Members will know that the simplicity of the plan is as follows: there will be no tax on benefits paid out of a taxed superannuation fund for people who are aged 60 years or over—no tax on lump sums, no tax on pensions. We will wipe away the complexity of the taxation arrangements on end benefits in superannuation, and we will make superannuation the preferred savings vehicle for all Australians. We will wipe away reasonable benefits limits. We will wipe away age based contributions. We will have simple rules whereby employer contributions of $50,000 per annum will be allowed—and $150,000 of undeducted contributions.

In relation to the transitionals, we announced that, between now and 1 July 2007, people who were intending to make large contributions will be able, subject to any applicable work test, to put into superannuation $1 million of post-tax contributions. That will allow people who had put in place a retirement strategy to do so, unaffected by these changes, before 1 July 2007. We have also announced for small business people that they will be able, on the sale of their business or a business asset which they have held for 15 years, to put $1 million into superannuation. Of course, where couples are involved in business, that will apply to both the husband and the wife. We announced indexation of contribution taxes. We announced changes in relation to lump sum benefits from untaxed sources and new arrangements in relation to tax file numbers. The detail of these superannuation changes can be found on the Treasury website SimplerSuper.treasury.gov.au.

The submissions that we got in relation to super were overwhelmingly positive. For example, we had Susan Ryan, the former Labor senator, saying:

Maybe faced with the Treasurer’s bold gazumping of Labor’s cherished but ... shabby super property, the Opposition will find the resolve to get another big picture worked out, and the wherewithal to let voters know about it.

Maybe Labor will; maybe it won’t. Garry Weaven, the former ACTU officer, said: ‘The government’s recent budget initiatives have proved that the Liberal Party is now the official party for superannuation.’ There you have endorsements from ACTU officials, from former Labor senators and from the industry. The only person we are yet to hear from in relation to the reaction to this superannuation plan—the only person who is yet to announce a position—is the Leader of the Opposition. He still cannot make up his mind. As I think the Minister for Revenue and Assistant Treasurer, who worked on this, said, it is a bit like the three mines policy: yes, no, or maybe is the position that the Leader of the Opposition currently has in relation to superannuation. The Labor Party ought to come to a decision. It ought to try and get its mind around policy for once. When it does, it ought to support the government and this bold initiative: the biggest reform to superannuation in the history of superannuation.

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