Max Chandler-Mather (Griffith, Australian Greens) Share this | Hansard source

This is a missed opportunity to tax wealth fairly in this country. People are sleeping in tents while 27 self-managed super funds hold balances of $100 million, with one person holding an obscene $544 million in their tax-sheltered super account. Australia's superannuation system is no longer about ensuring a dignified retirement for workers. Successive parliaments have contorted its purpose so that it is now Australia's premier tax haven for wealth accumulation and estate planning. This legislation, the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, will not change this trajectory in any meaningful way.

It is not just the Greens saying it. The co-architects of the compulsory superannuation system, the ACTU, say the same:

Superannuation was not designed as, and should not be, a tax haven for the wealthy nor a way for the wealthy to receive tax handouts. Instead, superannuation tax concessions should provide assistance to those who need it, to save sufficient income for their retirement.

Current superannuation tax concessions are unfairly targeted, regressive and unsustainable.

As a result, superannuation is soaking up lost public funds that should be directed to properly fund aged care and lifting people on the age pension and income support out of grinding, demoralising poverty—lest we forget that the age pension is still below the poverty line. In this financial year, $9 billion will go to the highest tenth of the population in superannuation contribution tax breaks and $8.5 billion in earning tax breaks—$17.5 billion a year in tax breaks going to this top 10 per cent of people, who will never need to rely on the age pension, which ostensibly was the entire purpose of superannuation. If we lowered this government's proposed cap from $3 million to $2 million, it would still only touch the wealthiest one per cent of the population, but apparently that's too much for Labor.

Public school funding, removing student debt, supporting women and children fleeing family and domestic violence and pulling families out of poverty are all things the government isn't investing in enough, precisely because there is too much timidity in taxing excessive wealth. Think of the potential of our country if we invested money in our people instead of letting the obscenely rich park their assets in Australia's homegrown tax haven, known as superannuation. The Greens are withholding our position in the Senate, but, even if this bill did pass, it would not change the fact that superannuation is skewed to the benefit of the wealthiest over everyday working people, and it will not change the ever-growing economic inequality that has infected Australia since the 1980s.

The other point the Greens make is about self-managed super funds' capacity to borrow to buy investment properties. Self-managed super funds are overwhelmingly established so that investment properties can be held or transferred within a tax-sheltered superannuation framework. Self-managed super funds are using limited-recourse borrowing arrangements to buy investment properties that renters can no longer afford. In 2014, the former head of the Commonwealth Bank, David Murray—hardly a friend of the Greens—was handpicked by the Abbott government to lead a Financial System Inquiry. He said super funds should no longer be able to borrow money to finance investments because it creates too much financial risk. Scott Morrison, as Treasurer, accepted all 31 recommendations of that review except for that one. They sent it to the Council of Financial Regulators to report back. The council reported back in 2019 and said, 'Yep, get rid of that ability for super funds to borrow.' Minister Frydenberg stayed silent but shadow Treasurer Bowen listened to the experts in the RBA, APRA and ASIC and committed to removing this borrowing arrangements pre-2019. Unprompted, with a new Treasurer, they reported again, highlighting the financial risks.

In the time since the original review, loans by self-managed super funds to buy property have gone from $497 million in June 2009 to $8.7 billion in June 2014 to $22.6 billion in June 2022. That is $22 billion flooding the property market essentially as property investments. This unsustainable growth in tax-sheltered borrowing is not just turbo charging financial risk in the super system but it is fuelling the property speculation and pushing aspiring first home buyers out of the market.

Three independent reviews to government have said end borrowing by self-managed super funds. It shouldn't have been ignored for a decade. The proposed taxation of unrealised capital gains in this legislation has brought the issue to the surface. Taken together, the combination of accrual taxation and a 156 per cent increase in limited recourse borrowing by self-managed super funds since the Murray review presents a very real risk to the individual super funds as well as to the financial stability of the superannuation system as a whole. If the government wants this timid legislation to pass, it is going to have to end super tax breaks for property investors.

(Quorum formed)

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