Aaron Violi (Casey, Liberal Party) Share this | Hansard source

I rise to discuss the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023. While this bill sounds quite innocent and mundane, the reality is that it is not. True to form with this government, this bill contains yet another broken promise. Before the election, the Prime Minister and the Treasurer made many promises. We remember the promise to cut electricity bills by $275—broken. We remember the promise of cheaper mortgages—broken. How about the promise to lower inflation? Also broken. And there was the promise of no changes to super—broken. This bill contains yet another broken promise, this time on franking credits.

Let's be clear. The bill introduces two changes to the franking credits regime, through schedule 4 and 5, that the government estimate will raise more than half a billion dollars. It's a change to franking credits. But what did the Prime Minister and the Treasurer say about franking credits during the campaign? Before the election, Anthony Albanese and Jim Chalmers said that Labor wouldn't touch franking credits. On 30 March 2021 the then opposition leader, now Prime Minister, said on ABC radio, 'We won't have any changes to the franking credits regime which is there.' On 17 January 2022, the then shadow Treasurer, now Treasurer, said, 'We won't be doing franking credits,' and also, 'I couldn't be clearer than that'—once again, further proof that this Prime Minister and Treasurer will say one thing to get elected and do another thing when in government. That's the reality. The Australian people cannot trust this government to honour its word.

It leads to the question of what will be next. The Treasurer has spoken often about the challenges the budget faces. We know the budget faces structural deficits of around $50 billion a year. This is before we include the $45 billion in off-budget spending that this government has already committed to. So, when this Treasurer talks about improving the budget bottom line, Australians know what that means: higher taxes. This is not the end but the very start of the Treasurer's tax grab.

Now, I'm not a big believer in coincidences, particularly in politics. In the same week that we have had the Treasurer and the Prime Minister breaking their promise on superannuation and franking credits, the Treasurer has also released the Tax expenditures and insights statement, a fascinating document. The statement showed modelling on revenue forgone from tax deductions. Let's have a quick look at some of the top items on that list: capital gains tax on your main residence, $48 billion; capital gains tax for individuals and trusts, $24.4 billion; and super concessions, the honeypot, $44 billion. That's $116.4 billion in tax deductions and concessions. This is the question for the Australian people. Given the Prime Minister and the Treasurer are willing to break their promise to the Australian people for a $2 billion increase in revenue on super and to make this move on franking credits for $500 million, be in no doubt: more changes are coming, and they are going to cost all Australians.

We are seeing this play out already. This is the standard playbook. The Treasurer refused to rule out changing concessions on capital gains tax for the family home when he was asked a simple yes-or-no question on national television. We saw him dance around it three or four times and refuse to answer it. Hours later, the Prime Minister had to come and rule it out, and the Treasurer was then wheeled out a few hours later to change his tune, but we know that this is the start of another broken promise by the Treasurer and the Prime Minister. As I said, given they were willing to break their promise for $500 million to increase franking credit taxes, we know they won't hesitate when they're looking at the $48 billion in revenue forgone on capital gains tax on the family home.

So what are Labor doing to franking credits? Currently, companies that undertake off-market share buybacks and capital raisings can offer franking credits to investors. Under Labor's law, they won't be able to. Labor's budget is clear that this is a tax that will raise half a billion dollars. We know from Treasury's tax expenditure and income statement that this disproportionally hits Australians over 75, not-for-profits and Australian super funds, who will no longer be able to access these credits. King & Wood Mallesons, in describing these measures, said:

The Federal Government is seeking to prevent entities from providing franking credits to shareholders in what it considers are inappropriate circumstances.

As I already outlined through quotes, before the election, both the Prime Minister and the Treasurer ruled out changes to franking credits. It's clearly and unequivocally another broken promise by this government, and, nine months in, the broken promises are piling up. It makes me more concerned about Labor's broken promise on superannuation taxes. It means that, with soaring cost-of-living pressures, Australians will be even worse off—because this is not just a broken promise; it undermines confidence in our superannuation system. Superannuation is Australians' money, not the government's. It is Australians' money to deliver quality of life in retirement—not a honey pot for governments to tax and spend.

Australians need confidence in the system, because we have a social contract in which we agree to lock away our own money for 40-plus years. In question time this week, we saw that this government just doesn't get that. When it was mentioned that some of these changes wouldn't impact people for 30 years, the Treasurer laughed and said, 'It's 30 years away.' They don't understand that that's the point. Superannuation isn't about today; it's about the 20-year-olds, the 30-year-olds and the 40-year-olds who, during a cost-of-living crisis, are locking away their money for their future retirement, not as a honey pot for the government to spend as they will.

Despite promising no changes to superannuation before the election, Anthony Albanese and this government are now proposing to double super taxes on one in 10 Australians by the time they retire, and they're stopping companies from offering franking credits to Australian investors, super funds and charities. They're taxing unrealised capital gains in super, meaning that Australian retirees will pay tax on money they haven't even earned yet.

We've seen both the Deputy Prime Minister and, just today, the Assistant Treasurer unable to explain on TV and in question time how this is fair or even workable. Labor has been dishonest about changing super and dishonest about how many Australians will be affected. Despite claiming that fewer than 80,000 Australians will be affected, independent research has shown that, by retirement age, more than 500,000 Australians will be hit by this tax, and it's potentially more, depending on inflation and where that goes into the future. The government can't explain how these changes will work. They can't explain how many people will be affected. The Prime Minister says that it will impact one in 200 people. The finance minister says it will impact one in 10 people. If the government can't explain it, how can Australians understand it?

Now, it's really important for the Australian people to understand this: you've always got to listen to what the Assistant Treasurer says. He's not quite as disciplined as the Treasurer. I'll give the Treasurer that; he's very disciplined. The PM? He can go off on a frolic. The Assistant Treasurer? He generally has—well, what we'd consider an in-your-head voice. Last month, the Assistant Treasurer compared superannuation to honey, saying it should be managed 'in the best interests of the hive'. Then he went on to say, 'In the self-managed sector, there are over 600,000 funds holding around $870 billion in retirement savings—that's a lot of honey.' There we go, people! 'That's a lot of honey' for the 'hive', which, as we know, is government spending. It is clear the government is coming for Australians' super.

Already, in my electorate of Casey, I have constituents contacting me to discuss their fears and outrage about these changes to franking credits and to super. They are not just afraid but angry. They feel betrayed.

Treasury has warned that there were significant concerns raised by the public. Over 2,000 submissions were received during consultation. Treasury says: 'Concerns were raised over retrospectivity, policy objective and potential for the legislation as drafted to capture legitimate commercial practices.' Even the October budget acknowledged that a substantial portion of the revenue from this measure will fall on Australians' superannuation. This franking credits measure reduces the ability for companies to offer franking credits on new capital raising activities. There is genuine concern that the measure will have unforeseen impacts and wider application than Treasury claims.

Before the election, this Prime Minister and the Treasurer made many promises. They broke their promise to cut electricity bills by $275. They broke their promise of cheaper mortgages. They broke their promise of lower inflation. They broke their promise of 'no changes to super'. They broke their promise, with this bill, of not touching franking credits. The Australian people know that this is not the end of this government's new taxes and broken promises. It's just the beginning. When Labor runs out of money, they come after yours.

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