Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

This is the second time this bill has been before the House and will be the second time it has been before the other place, where it was rejected. The reasons for rejecting this bill have not changed, they have only increased. They have increased in the light of this government's deceitful and unfair budget. Last time this bill was before the House I went through the scare campaign run by the then Liberal and National party opposition in relation to the Minerals Resource Rent Tax. I pointed out that the Liberal Party and National Party, whether they be in opposition or government, have a great deal of difficulty in working out whether the Minerals Resource Rent Tax is a problem because it raises too much revenue from the mining sector or too little. They say it is a disaster because it does not raise enough revenue. They say it is a disaster because it has cruelled the mining industry in Australia. I put it to you, Mr Deputy Speaker, that both those propositions cannot be correct.

The now government says that we need to get rid of this because it does not raise enough money. If it does not raise enough money then how is it damaging the mining industry? We have heard all this before. It is a tired, old scare campaign which the Liberal Party conducts in opposition from time to time. We saw it when the then Hawke government introduced the petroleum resource rent tax. We were told that it would see the end of offshore exploration in Australia. The then shadow Treasurer, one member for Bennelong, John Howard, who used to hold the position of shadow Treasurer, argued that the petroleum resource rent tax would stop ventures proceeding and should not be proceeded with. The then member for Mayo, who went on to become the Foreign Minister of Australia, said:

The legislation is yet another example of this government introducing new taxes on the few productive industries we have left in Australia thereby inhibiting their development.

What a narrow, pessimistic point of view. What went on to happen was that that was implemented, enacted. The Howard government eventually came to office. The former shadow Treasurer became Prime Minister. Did they change the policy? No. It has raised for the Australian government since that time the equivalent in today's dollars of $39 billion. Does anybody suggest there is no offshore exploration going on in Australia because of the PRRT or there is no production going on in Australia because of the PRRT? Of course not, because it is a nonsense argument. Anybody who goes to the north-west of Australia or who knows anything about the resources sector in Australia would know that that is just complete nonsense.

This bill needs to be opposed for a whole range of other reasons as well because the government has chosen to continue their attack on working Australians through this bill. I want to first focus on the issue of retirement incomes, something which is quite topical in Australia. The Treasurer tells us we all need to work longer. The Treasurer tells us we need to have the longest working life in the world. He says we all need to work until 70 before we become—in his words—'leaners' on the Australian taxpayer by becoming age pensioners. He tells the manual labourers of Australia, the nurses, the policeman, the soldiers—people doing tough jobs—that they have to work longer, that they do not deserve the age pension until they turn 70 because it is not sustainable.

What is the Treasurer doing and what is this government doing to retirement incomes of Australians in this piece of legislation? They are making it harder, particularly for low- and middle-income earners to save for their own retirement. They are making retrograde steps to Australia's retirement income system, the most retrograde steps we have seen to superannuation in a long long time. When they were in opposition they promised no adverse changes to superannuation. What they have done is adverse change after adverse change.

The original MRRT repeal bill, which came before the House last year, proposed a delay in the increase in the superannuation guarantee. But it has got worse since then because the budget contained yet a further delay in the increase in the superannuation guarantee, which, in keeping with this government's typically chaotic approach, is not reflected in this legislation. But the government is going to come in, we are told, later today and move amendments to their own legislation to reflect their own budget.

Under the previous government and under the current law of the land, the superannuation guarantee was due to reach 10 per cent on 1 July next year. Now the government amendments will see the superannuation guarantee get to 10 per cent by 1 July 2018 when the original repeal bill had them getting to 10 per cent by 1 July 2017, so there is this constant delay to ensuring and helping Australian workers fund their own retirement. How does that make Australia's retirement income system more sustainable? How does that take pressure off Australia's age pension system? Of course it does not. It makes it worse and it is terribly unfair to Australian workers. It is also a particularly irresponsible measure. The increase in the superannuation guarantee and the establishment of the low-income superannuation contribution, which I will come back to later in my remarks, would have swollen Australia's national pool of savings and superannuation by $500 billion by 2037—a third of Australia's total output. So this is not a small amount of money we are talking about.

In relation to the age pension, Treasury analysis shows that a continuation of the previous government's policy settings would have resulted in a halving of the proportion of older Australians on the full rate age pension by 2050, moving Australians from the full age pension to the part age pension, which does two things: it makes our age pension more sustainable and is actually a positive way of dealing with the demographic changes in the Australian economy; and it gives people more opportunity to live their retirement without being entirely dependent on the welfare system, which is a win-win situation. But of course that is all far too sensible for this Treasurer, who says: what we are going to do is we are going to make it harder for people to save for their own retirement and we are going to make them work longer to boot. We are going to give them the longest working age in the world.

There is not one country in the world with a pension age of 70. And there is not one projected to have a pension age of 70 in the OECD by 2035, which is when this government is proposing to make Australians work to 70. And there is not even one with the projected age of 70 by 2050, which is what the Commission of Audit in effect recommended—with the possible exception, to be fair, of the Czech Republic, which has a formula to determine these things. So we have a Treasurer who says: you must work longer than anybody else in the world and I am going to make it harder for you to save for your retirement—and this particularly goes to low-income earners.

We hear a lot about superannuation tax concessions and how they should be protected. We hear a lot of rhetoric about that from those opposite. As they engage in the rhetoric, what they also do is launch an attack on low-income earners. When the Labor Party came to office in 2007, low-income earners received a tax concession on their superannuation savings of exactly 0 per cent. We looked at that and said that is not fair. High-income earners receive substantial tax concessions for their superannuation because they are saving for their retirement and that is fine. Why should high-income earners receive substantial tax concessions and low-income earners receive exactly 0 per cent tax concessions? That is just not fair. It is also bad policy for the nation to force low-income earners to rely on the age pension in their retirement. If you look at the combination of the low-income superannuation contribution and the rephasing of the increase in the superannuation guarantee proposed by the government, its abolition and the rephasing, we will see $75 billion less in retirement incomes by 2023, not that far away.

And this government has the hide to lecture Australians about how long they should work when it is undermining important advances in ensuring Australians of any income, be it low, middle or high, receive tax concessions for their superannuation. How can this government live with itself saying to low-income earners, to cleaners, to factory workers, to manual labourers, to clerical workers around the country: 'We are not giving you any support to save for your retirement. We are not going to give you any tax concessions, but high-income earners can get big tax concessions.' And it is worse, because the previous, Labor government said: 'We're going to make a few changes here. We're going to make the superannuation system a bit fairer. We're going to not only give low-income earners some tax concessions but pull the tax concessions for high-income earners back just a little bit in a fairly modest measure.' But what does this Treasurer do? He says: 'Oh, no, no. We're going to give those tax concessions back to high-income earners. We have a budget emergency apparently, but we can give high-income earners tax concessions on superannuation. But low-income earners, if they earn the princely sum of $37,000, we are giving nothing.' I say shame on this Treasurer and shame on this Prime Minister for treating the low-income workers of Australia with such contempt and such arrogance. That is an adverse change to superannuation if ever I have seen one. This is a government which treats hardworking Australians with contempt.

This bill does two things to retirement incomes. It delays the increase from nine to 12 even further than the original—although the member for Moncrieff is going to come in here a little bit later and move an amendment to his own bill in a typically chaotic fashion. Then we are going to abolish the low-income superannuation contribution. In the second reading speech, the Parliamentary Secretary to the Treasurer, the member for Moncrieff, said:

The government will revisit concessional contribution caps and incentives for lower income earners …

I thought, 'Okay, maybe they are rethinking—

… once the budget is back in a strong surplus.

So his message to low-income earners in Australia is, 'Just wait till we're back in surplus,' but for high-income earner it is, 'We're going to give it to you right away.'

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