Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Hansard source

I look forward to contributing. I say to you, Mr Deputy Speaker: the government has no plan whatsoever other than simply increasing the superannuation levy from nine per cent to 12 per cent to try and increase national savings. It is a lazy approach. Even Dr Henry, in the now famous Henry review into Australia’s taxation system, said there is a better way and at the end of the day a more lucrative way for the nation to increase superannuation by taking a different approach to increasing the superannuation levy from nine per cent to 12 per cent with some reform of the taxation arrangements apply to existing super.

Of the 138 recommendations in the Henry review, the government chose to accept 2½ of the recommendations. Within six weeks they dumped one of those recommendations, the original version of the mining tax, which left them with 1½ of the 138 recommendations. That is right up there with the success story of the 2020 Summit, where I seem to recall a similar acceptance rate of recommendations. But I say to you, Mr Deputy Speaker, that not only is superannuation vitally important to the financial security of everyday Australians and their families but, most significantly, superannuation is important to our level of national savings. At this crucial moment when we have the most generous terms of trade in 50 years, we need to be a nation that can start to fund ourselves, that can start to fund our growth.

I fully accept that as a nation we have imported capital; since 1788 we have been importing capital. I accept that. We have had massive demand and need for significant funding of capital infrastructure in this country. And I do praise Bob Hawke as Prime Minister of Australia, who was not only a very good Prime Minister but also a good mate of mine and a constituent. I would say that he deserves great praise for the introduction of compulsory superannuation in Australia. I am a believer in compulsory superannuation and it is a significant contribution. The coalition government implemented an increase in the superannuation guarantee levy from, if my memory serves me correctly, six per cent to nine per cent in the latter part of the 1990s. But, as Dr Henry and the panel point out in the Henry review, nine per cent is about right. This government, in order to appease its mates in the industry super funds, undertakes an approach to national savings that if it were running surpluses would not necessarily be necessary. I would say to you that if it heeded the recommendations of the Henry review there would be a better way to increase the pool of superannuation and at the same time deliver longer term benefits to Australian superannuants.

What is of interest is the fact that there is a cost associated with the recommendation in the Henry review on superannuation. I accept that. If we were not running last year the largest cash deficit in Australian history and this year the second-largest cash deficit in Australian history, if we were not doing that, then, by my Lord, I say that we would be able to afford a whole lot of tax initiatives that reduced the tax burden and provided a very real incentive for Australians to increase their contribution to superannuation and increase the benefits over the longer term of superannuation. So Labor have taken, as they traditionally do, a very lazy approach. You would appreciate this, Mr Deputy Speaker Scott. They have taken a very lazy approach to superannuation reform. This is not true reform. Australians cannot see where they will be at the end of it.

The irony is that Dr Henry and even the Labor Party themselves have identified that this initiative to increase the contribution surcharge from nine to 12 per cent is going to be at a cost to the budget over the longer term. So why not be smarter and accept the recommendations of Dr Henry? Why not be smarter and accept that you can improve the taxation arrangement for superannuation without putting a greater burden on Australian employers and employees?

We are going to hit the cathartic moment in the next few years where, under the Labor Party, Australians will be paying a new carbon tax and will be taking less pay home with an increased superannuation contribution. And interest rates are going to be higher. This is the classic combination that will end up being a perfect storm for the Labor Party over the next two to three years, because the cost of living for Australians is increasing. It will be this government’s actions and decision making—nothing short of that—that will make the everyday cost of living much harder for Australian families. The carbon tax means that electricity and so many other industries are going to be more expensive. Higher interest rates mean that people are going to have bigger mortgages, bigger credit card bills and bigger phone bills, with so many people putting them on their credit cards. Business is going to find it more expensive to fund expansionary growth because every day it will be out in the market competing with the government, which is in the business of borrowing $100 million a day to fund its fiscal expansion.

At the same time, above and beyond all of that, the Labor Party are increasing the superannuation contribution from nine to 12 per cent, which will mean that many individuals will have less take-home pay. Well done, Labor. All they could do is just cap it off with an increase in the GST. That would be the firecracker on New Year’s Eve. Labor have delivered to you all the bangers in the last hour in the lead-up to midnight and now they introduce an increase in the GST just to wrap it all up and make sure that Australian families and households are totally screwed by an incompetent government.

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