Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I speak in support of the raft of reforms included in the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023 brought by the honourable member for Whitlam. I note the member for Petrie's contribution. I did not hear him commit to rolling back this legislation should they win the next election. He must've forgot to mention that in his 30-minute wandering diatribe, but I'm sure he'll be able to fix it up later.

I congratulate the honourable member for Whitlam for bringing this bill to the chamber. As a brief aside—I'm sure the Prime Minister is not listening—I would just say to the member for Whitlam: How about those Dragons on the weekend? Wasn't that magnificent? They are now equal ninth on the NRL table with five from ten. That's a good pass when it come to the Dragons of late.

Anyway, returning to the legislation, the Albanese government is committed to strengthening and safeguarding Australia's world-class superannuation system. It was Labor who designed and implemented the superannuation system, and through the years Labor has protected and strengthened it to ensure that Australian workers are set up for a dignified and secure retirement. It was the Keating Labor government back in 1992 that made superannuation compulsory. This necessary and responsible measure took the pressure off the pension system, and, thanks to that, Australians have saved a total of $3.3 trillion and counting—an amount that is amazing when you think of the number of people in Australia.

The Superannuation (Objective) Bill 2023 focuses on legislating the objectives of superannuation. It ensures that future policies must be compatible with the objective of safeguarding the retirement futures of all Australians. We knowthat we won't see what happened during COVID, where we saw the coalition urging hardworking Australians to raid their superannuation in order to make ends meet. That's what happened under the Morrison government during the pandemic—$38 billion in private stimulus, effectively. That will cost the people that had to raid their superannuation about $85 billion by the time it comes to their retirement, because they miss out on the magic of compound interest. And what did they use it for? We know from research that it was spent on things like bull bars, trips to Bali, boob jobs, lap bands and back decks. My understanding is that those things will not give you a long-term financial return—not in the way that compound interest does.

We have made sure that superannuation is protected. We've heard from those opposite the idea of people using their superannuation funds to help them buy their first home, and we know the problems that could have for an already overheated property market. Superannuation is not designed to be a second bank account. Its purpose is 'to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way'. That's what superannuation is about. Today the Albanese government seeks to strengthen our superannuation system with targeted and responsible reforms which will make the system fairer and more equitable.

The $3.3 trillion—and counting—invested in superannuation is not evenly shared amongst Australians; of course it's not. Those who are nearing the end of their working lives obviously tend to have much more substantial balances. A significant number of these people have benefited from different contribution caps throughout the years. As it stands now, about 0.5 per cent of the population has a superannuation account of more than $3 million. Now, $3 million is not small change, and that ain't the half of it.

As we saw with the positive changes to the stage 3 tax cuts—with all working Australians benefiting from the cuts, not just the wealthy—the Albanese government is committed to making changes for the better. The change that we are proposing to make to our superannuation system is all about making it sustainable and fairer. This bill introduces a modest change that will affect, as I said, less than 0.5 per cent of all Australians—those lucky, no doubt hardworking, 80,000 people who have a superannuation account with a balance of over $3 million.

This is a responsible change for Australians and for the budget. It's the focus of this government to implement changes to ensure that the generous superannuation tax breaks are better targeted and more sustainable. Currently, earnings from superannuation in the accumulation phase are taxed at a concessional rate of 15 per cent, so obviously there's a tax incentive to save. This will continue for the 99.95 per cent of Australians whose superannuation balances are below $3 million.

From 2025-26 the concessional tax rate applied to earnings on superannuation balances above $3 million will be 30 per cent. For the first $3 million, no problems; for each dollar over $3 million, you'll be taxed at 30c in the dollar. These accounts are beyond what is necessary to fund a comfortable retirement, as judged by the ASFA Retirement Standard.

The small group of people affected by this reform will continue to benefit, as I said, from that generous rate of 15 per cent on earnings for balances below the threshold. The first $2,999,999.99 will still be taxed at 15c in the dollar. Furthermore, there will continue to be no limit on the size of superannuation account balances, beyond the constraints of those annual contribution caps.

This targeted reform is predicted to generate about $2 billion of revenue in its first full year, unless those 80,000 people rearrange their financial affairs. This change will assist in easing the pressure caused by spending on necessary and valued government programs. As one of my constituents said:

At a time when we have huge demands on our country in aged care, health care, the NDIS and security to name a few, it is clear that money could be spent more wisely elsewhere.

Labor governments are dedicated to protecting working Australians, and a key component of that is ensuring that our superannuation system is equitable and sustainable. The bill also proposes a raft of reforms which support better regulatory outcomes. The first of these is additional power for the Commissioner of the Australian Charities and Not-for-profits Commission to make disclosures about new or ongoing investigations, minimising the risk of harm. This reform is the result of consultation with the charity sector to develop appropriate legislative safeguards. Currently the ACNC can be prevented from disclosing an investigation into alleged misconduct by a not-for-profit organisation. Enabling disclosure is an important reform which will build public confidence in the sector and the ACNC's role as an impartial regulator. Australians who donate to charities from their hard-earned wages deserve to trust that there is transparency in the oversight of the sector. The reform will assure both charities and donors—most Australians are very generous when it comes to supporting charities—that issues of public concern are being dealt with, building confidence in the not-for-profit sector, as well as ensuring trust in philanthropy, which is, as I said, core to Australian values.

The bill will ensure further regulatory improvements, with changes to the review cycles implemented by the Financial Regulator Assessment Authority. It will increase the review cycle from two years to five years, supporting more comprehensive reviews of the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority. The increased cycle length will enable regulators to implement recommendations between reviews and more meaningfully assess the implementation of new measures.

The amendments also include a change to improve the ease of access for Australian and professional and wholesale investors to global investment opportunities. Up until now, this has been provided by an instrument of ASIC. The reform means that financial institutions and investors can access financial products and services offered by foreign financial services providers, diversifying financial holdings. It will improve outcomes for millions of Australians through facilitated access for superannuation funds and investment organisations. The reform also streamlines access by foreign companies by recognising the regulation of comparable foreign regulators and exempting certain foreign companies from undergoing aspects of assessments when applying for a standard financial services licence in Australia—that double regulation.

Schedule 9 of this bill also provides safeguards to address the risks posed by new and emerging technologies, by updating the payment system regulatory framework. The Reserve Bank of Australia will be able to regulate all participants and payment systems, including digital wallet providers and buy-now pay-later service providers. It further protects Australians by giving the Treasurer the new designation powers that allow the minister to designate payment services that present risks of national significance and then implement additional regulations.

The extensive measures included in these amendments are important to safeguard our superannuation system. They promote confidence in the not-for-profit sector and improve outcomes for hardworking Australians. I commend the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023 to the House.

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