Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Hansard source

I thank the member for Brisbane for his question. The government does believe it is important to provide assistance and support to Australians who are saving for the future. As the Treasurer announced last night, the government is improving the taxation treatment of savings by Australians by cutting the tax rate on their savings by 50 per cent for the first $1,000 of savings. Almost 5.7 million Australian taxpayers will benefit from this measure, and around one-third of the beneficiaries will have incomes below $37,000. Importantly, about 3.3 million Australians will have all of their interest income below the $1,000 cap, therefore receiving the full discount.

For too long interest on deposits and other mechanisms has been unfavourably treated compared to capital gains, which are already concessionally taxed. Those capital gains are often out of reach of low- and middle-income earners. This is a very important measure in improving the equity of our tax system. For a taxpayer with a taxable income of around $50,000, the measure will reduce their annual tax liability by up to $177.50. If they reinvest this benefit into their savings account, after five years they will have almost an extra $1,000 in savings.

This measure, announced last night, is a very important complement to the superannuation measures announced by the government on 2 May and also contained in last night’s budget. These measures boost superannuation not only by increasing the superannuation guarantee but also by giving the contributions tax back to low-income earners and allowing people who are over 50 with low balances in their superannuation accounts to top them up at a concessional tax rate. These are all measures funded by the resource rent superprofits tax, as is the tax concession on savings more generally. They are all measures that the Liberal Party would deny Australians; all measures that the Liberal Party would try and stop Australians having the benefit of. We know that the Leader of the Opposition does not support Australians saving for the future. We know he does not support the increase in the superannuation guarantee, and we also know he does not support tax concessions for superannuation. This is what he had to say in his book, Battlelines:

At some point, saving money by keeping people off the pension while forgoing revenue to encourage them to make alternative provision becomes counter-productive.

He says:

It could be simpler and fairer for the revenue provided in superannuation concessions to be paid as a pension instead.

So the Leader of the Opposition would wipe out the tax concessions on the savings of millions of Australians. He would wipe out the tax concessions of people nearing retirement so he could fund the abolition of the age pension means test. The Leader of the Opposition and the shadow treasurer, in what we have seen today, have engaged in what has to go down as the weakest response to a federal budget in living memory; the weakest and most pathetic response we have seen in this House on the day after a budget for a long, long time. What we see from the Leader of the Opposition is a plan to cut a swathe through the retirement incomes of Australians, and oppose this government’s measures to improve incentives for Australians to save. The Leader of the Opposition said this morning on AM:

Everyone will know where we stand. They’ll also know what we’re against …

Well, they are against Australians saving more. We know that. We know they are against superannuation. We know they are against somebody who is aged 30 now on average weekly earnings having $108,000 more in their retirement income. We know this risky and erratic man wants to cut a swathe through the retirement incomes of Australians and oppose incentives for hardworking Australians to look after themselves and save more.

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