Michael Johnson (Ryan, Liberal Party) Share this | Hansard source

I notice the honourable member for Blaxland is sitting opposite. He is probably one of the very few members on the Labor side who might pay attention to small businesses in his constituency, as perhaps would the shadow minister for immigration at the table, the member for Watson, but I am not sure that they really do have the affection for small business that we do. They probably tolerate small businesses but we are the ones who love small businesses. On this side of the House we have a very deep affection for small business. I doubt very much that anyone in the small business community across the length and breadth of this great country would change their view on that, especially when it comes to economic security and the good policy that keeps the businesses of this country profitable.

We all know that small businesses account for some 95 per cent of businesses in Australia. They employ some 3.3 million people and account for 30 per cent, or over $300 billion, of Australia’s GDP—no small amount. It needs to be said again to those who try to diminish the achievements of the Howard government that 1.9 million new jobs have been created since 1996, when the Howard government came to office, because of the policies we have introduced, which are all about enterprise and all about innovation.

A lot of these Australians are self-employed. Not only are a lot of people in small businesses working in their businesses and investing in them but a lot of them have their entire lives resting in their small businesses. The link to superannuation, therefore, is absolutely vital.

One of the very shameful legacies of the pre-1996 superannuation changes is that self-employed people have often been treated as second-class citizens when it comes to saving for their future. They are a critical section of our Australian community. They are the drivers in so many ways of our prosperity and economic growth. We need to ensure that superannuation is front and centre for them as well as it is for those who are employees in companies across the country.

Under the existing system, self-employed people face a number of additional restrictions: different tax deductibility rules, which means they have to contribute more money to achieve the same tax deduction as someone who is employed; no tax deductible super contributions can be made on their behalf once they reach the age of 69; and they are not eligible for the government’s co-contribution scheme.

Under the new simplified superannuation reforms, the special restrictions on the self-employed are removed, allowing them to get a 100 per cent tax deduction for super contributions up to the new limits. I welcome this very much and I know that the small businesses of the Ryan electorate will be thrilled at this new provision. Also removed is the age limit on tax deductible super contributions. Self-employed people will be treated the same as employees and will be allowed to claim a full tax deduction up to the new limit until the age of 75. Finally, the co-contribution scheme requirements have been streamlined so that as long as a person earns over 10 per cent of their income from carrying on a business or gainful employment, and they are under the age of 71, they will be able to utilise the scheme. This will enable self-employed people to access this already generous federal government initiative.

The reforms contained in these bills will also make changes to the way superannuation companies deal with lost superannuation. As Australia’s workforce becomes more mobile and more flexible under the workplace relations regime—which we will take to the Australian people later this year and which I am sure they will endorse very strongly—there will be more cases of superannuation funds being forgotten about and not rolled over when workers change their employment or their circumstances. We will ensure that this lost superannuation, which really is a staggering amount—some $9.2 billion I understand across more than 13 million accounts—will be addressed. Under current arrangements, when a fund cannot contact a person, once they turn 65, the balance of their account is transferred into the coffers of the state in which the fund is based. This presents a number of problems when people try to reclaim the money. We want as much as possible to make it easier for Australians in these particular circumstances to be able to reclaim the money that they are entitled to.

In conclusion, I support this bill very strongly. It is very welcome in the Ryan electorate and amongst small business owners. I am pleased that the Labor Party will support it. It is about time that they supported something that was in the national interest. I do commend them for supporting it. Of course, it is very disappointing that in June last year they were not able to support us, but they have decided that it is in the interests of the wider community that they do support us. I guess it is better late than never. A month after the budget was delivered last was the time when my firstborn—young Ryan Andrew Johnson—came into this world. It is now February 2007, some 7½ months later, and it is great that the Labor Party are supporting a government bill. It is quite a while, but better late than never. I thank them for supporting a very important government initiative. I know that the good people of Ryan will be very pleased these critical bills are being supported by the federal Labor Party.

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