Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Hansard source

Thank you, Speaker. Congratulations on recognising—as those on the coalition side do—that the uncertainty, the chaos and the suggestions of further changes in the area of superannuation is terrifying superannuation savers and those relying on their superannuation for their income at a time when cost-of-living pressures loom large in every household in Australia and every small business. You have got people on fixed and superannuation incomes that they have acquired through putting away savings, preparing for their retirement, who are seeing their costs going up and who are faced with greater uncertainty about what the future will look like for them. Financial security is a concern. It is a concern for many Australians, but at this moment it is of greatest concern to those who are relying on their superannuation or planning for their future.

If you were to characterise the Labor Party's approach to superannuation, it would be tax gouges and tinkering greatly. That is what they do. They have looked at superannuation and thought, 'Here is a cash cow. We will mess with it and we will play with it. We will describe it as being motivated by high ideals and we will even try and generate more class warfare around retirement savings policy.' What it really is all about—from start to finish—is a cash gouge to try to prop up this failing budget that Labor has overseen. This is on the back of the undertaking by the former Prime Minister. Who can forget that undertaking, that solemn promise, that explicit commitment that was made during the 2007 election campaign—that Labor would not change the superannuation laws? Remember: 'Not one jot, not one tittle'. Haven't they failed?

I thank the Parliamentary Library. I asked the Parliamentary Library, 'What does "not one jot, not one tittle" mean as it relates to stability and superannuation?' Look what came! This is 'not one jot, not one tittle'. This is more than 50 major policy announcements about change and about legislative adjustment that has happened on the back of this promise of 'not one jot, not one tittle'. Do people want to know what a jot or a tittle looks like? Apparently, this is not one jot and not one tittle; this is at least 50 tittles, and then some, as they continue to tinker with superannuation, creating great uncertainty for all Australians.

What do we expect in the upcoming budget? We have already seen a little bit of speculation from Labor as they try on different ideas about how to paper over the enormous budget black hole that they face. Even Labor luminaries have come out saying, 'Please, stop messing with superannuation.' But let us think about all of those Australian men and women who are wondering about their retirement, thinking about what will come next and looking for some certainty, stability and predictability on something that is such a long-term investment as superannuation—for those who are saving for it—or something that is so significant for people that are dependent on their superannuation to cover their costs of living at this time.

What can we look for into the future? We know that Labor sees superannuation as a cash cow and that it is viewed as a soft touch to paper over their budget mess. Let us look at some of the changes to date. They have limited the amount that people can save for their retirement by lowering the concessional contributions caps from $50,000 and $100,000 to $25,000. What does that mean? That means a tax increase on voluntary contributions. That means that for those Australians who lost everything under the recession we supposedly had to have, with maybe just a few years of their working life to put aside money for their retirement, here is another brick wall that they will run into as they make choices about their own income and voluntarily commit it to a retirement that is not dependent on the taxpayer but is one that they can shape themselves through superannuation.

Think about small businesses and small business people, particularly in these recent and ongoing years when things have been extremely tough. When are they going to put money aside for their retirement? When there is a good year, you might want to put some away for your retirement nest egg. That is what the Howard government understood, that is what those in small business understood and that is what the men and women who did not have a retirement nest egg understood. We had a higher level of contributions when you could get concessional tax treatment. Why? It was to encourage people to voluntarily put aside their own resources for their own retirement and to relieve the burden on the taxpayer into the future of income support pensions so that people could determine their own destiny and the financial platform from which they could plan with certainty for their future. But, no, Labor has taken that all away—and they are going to do it again. They have done it with the mess they have made of superannuation contributions.

Let us not have any of this cant and concocted outrage about the coalition and its work for low-income people and their superannuation. It was the coalition that introduced the co-contribution arrangements. It was Labor that cut them. Since the election of Labor, you have seen $3 billion taken from low-income people in co-contributions to support them as they build up for their own retirement. You have seen the taxation rates go up for people earning above $300,000 a year. You have seen this extreme crackdown on people who might have just got outside some of these parameters with these tax penalties that are absolutely horrendous. In my own area, someone running a not-for-profit organisation had their accountant plan to make sure that they could make the contributions up to the $25,000. They waited until the end of the financial year to see if they had the capacity to do that. When they were able to settle their own financial circumstances, they then put the contribution in up to that level. But what happens? Your capacity to make those contributions might be based on accrual accounting concepts, but the calculation in the tax office is based on cash. So even if it relates to a financial year—say, 2011-12—and you happen to pay it on 7 July, it actually goes into the subsequent year.

These poor people are paying an enormous number of penalties for trying to provide for their own retirement. The Labor changes combined have added $8 billion of tax revenue to their budget. This is what they are looking at again to have a crack at. Think about those people looking for certainty. Think about the promises that have been given before not to mess with superannuation—the 'not one jot, not one tittle' undertaking from former Prime Minister Rudd. Think about Prime Minister Gillard's undertakings not to disadvantage people with the way in which superannuation is played with and the reassurances that co-contributions would not be messed with. All of that has proven to be completely false.

So when the Prime Minister tried on this potential tax gouge of taxing people over 60 as they were receiving their superannuation, it leaked out. Everyone was briefed and told to talk about it just to see what the reaction was. Well, there was outrage, so that got dropped. But have we heard any other assurances about not messing with other aspects of superannuation? Not at all.

I say to the Australian public: get onto your Labor member of parliament. You might not know who they are because they might be hiding from you, but get onto them and say, 'Don't mess with my super.' This is something that is important. It is something that we have seen changed time and time again. That is what 'not one jot, not one tittle' looks like—50 changes. We have got more adverse changes on the way as Labor looks to superannuation, particularly self-managed superannuation funds, as the soft touch, the cash cow, to paper over its inability to manage its budget. As we all remember, the Prime Minister said: 'If you cannot manage your budget, you cannot manage the economy.' Sadly, the cost of that is coming right on top of ordinary men and women in Australia.

Let us look through what has been going on with these changes. We, in the coalition years, established more generous contribution caps so that people could put that nest egg aside, even if they had only a very narrow window of working life to provide for their own retirement. This is particularly significant for mature age workers who might not have had the benefit of a lifetime of work and superannuation contributions. It is particularly significant for a small business owner. We also tried to put in place, and we did put in place, the co-contribution scheme for low- to middle-income earners whereby they were encouraged to save towards their retirement. They would be rewarded for making the decision to contribute additional amounts, and they were supported by co-payments from the coalition. We abolished tax being paid by retirees when they withdrew their money from superannuation. Let us remember, it was taxed on the way into the fund; it was taxed in its earnings. We wanted Australians to benefit from that income at the end, when they were drawing it out to support their own retirement. That was sound policy. That was policy that worked.

Now the Gillard government is planning another tax increase in the May budget. If they are elected again, they will do it again. After 14 September, if Labor creep back, they will do it again, because they eye superannuation as a soft touch. Self-managed super funds have a value greater than the entire GDP in the Australian economy. The government want a crack at that as well. They have already started by putting in new requirements on registering the auditors that are looking at it—and there are fees there, and we are yet to hear what the fees actually are. The government are ready to jack that up as well.

There have been constraints on activity in self-managed super funds, and the government describe this as all part of some kind of class war, where they are looking after low-income people and getting stuck into the rich. But when one asks what the rich person is, they seem to be pretty average Australians. Their income is not some biblically huge amount. It is a modest income at a time when their households are facing cost of living pressures as well. When you look at superannuation, it is where the vast majority of the Australian public fund their retirement. The really super rich have got other avenues. The vast bulk of the Australian public use superannuation.

When you start messing with the super rules, you start moving those goalposts and it affects everybody. It certainly affects younger people. They become more reluctant to contribute because they are uncertain about what is going to come next. They are not confident that the arrangement they are entering into now will be the one that will be sustained throughout their working life, and that instability causes them to be less attracted to superannuation. For the mature aged, they are worried about those cost of living pressures. When you see another tax attack on them that eats not only into their retirement nest eggs but potentially into their income as well, they are getting cost of living pressures coming at them as well as the government taking away more of their retirement income capacity from them.

Concessional tax treatment is an incentive. It is an encouragement. It is actually an investment in the future affordability of our three-pillar retirement income system, where you have the age pension as an income support net; you have the compulsory superannuation framework, which is something that all employers are contributing to—not as the government would have you believe. Remember that nine to 12 per cent superannuation contribution? They sat there and said: 'You know, the mining tax is paying for that.' This maybe one of the most cunning observations of my 17 years in this place, but employer funded superannuation is funded by—

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