Monique Ryan (Kooyong, Independent) Share this | Hansard source

I rise to speak to the House in support of the amendment moved by the member for North Sydney and in anticipation of the amendment about to be moved by my colleague the member for Wentworth. I'd like to make the point that the compulsory superannuation scheme that was introduced into this country in 1992 is extraordinary, and I'm sure that the Minister for Financial Services will agree that, in representing the fourth-largest pool of retirement assets globally, what we have in Australia is an incredibly important superannuation system. It means that generations of Australians can finish their working lives knowing that they will be financially secure in retirement. Despite the fact that a doubling of Australians who qualify for the age pension is expected by 2060, we do not expect that the amount of money that this country will have to put towards aged and service pensions is going to increase in the next 40 years, because of the value and the size of our superannuation system.

There have been so many policy failures in this country in recent years, and young Australians are facing the cost of climate change amelioration. They're facing an incredibly challenging energy transition. They have a housing system and, to some extent, a taxation system which could be said to be stacked against them. But they will be protected by this superannuation system from the cost of caring for our ageing population.

But the trade-off for Australians putting away their money and forgoing the immediate access to their earnings has always been the preferential tax treatment of money that has been placed in super in this country. If we want Australians to commit to super, if we want them to commit to their futures and if we want all of those who pay tax or receive benefits in this country to benefit as they should from the superannuation system, we have to respect its premises and its provisions and we shouldn't be chipping away at it or devaluing it.

The Treasurer has already told us that the superannuation concessions need to be better targeted and sustainable, and the main purpose of the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 is to reduce those concessions to those people with a superannuation balance of more than $3 million. As the minister has said, at this point the change in provisions is only going to apply to 0.5 per cent of Australians, but the reality is that a 25-year-old who today is earning $100,000, with a super balance of $35,000, will reach the $3 million threshold by the time that they turn 65. So this is a question which is much more pertinent to young Australians than it is to older people like those in this House at this point in time. Many people in my electorate of Kooyong will be disproportionately affected by this legislation because they have very high super balances. Having said that, most understand that the tax concessions that are built into super have a cost. There is broad support in my electorate for the principle of taxing very high super balances, but it is an extraordinary and disappointing decision that the $3 million threshold will not be indexed. I agree with the member for North Sydney: indexation is an accepted principle for government payments. It is commonly applied. It's applied to contribution limits, to the transfer balance cap and to lump sum benefits. It should be applied to the superannuation balance threshold, and I think it's a bit disingenuous and cynical that the government has decided not to do this at this point in time.

I support the member for North Sydney's amendment to prevent the taxation of unrealised capital gains. This is a departure from the traditional treatment in this country and in other OECD countries in which capital gains tax applies only on realisation. The precedent that this sets is chilling, and it's particularly concerning for small businesses, farmers and venture capital funds. So I support the amendment that the member for Wentworth is about to move for a formal assessment of the potential impact of this legislation on the startup and scale-up sectors.

Australians need certainty in their financial decision-making, and they need to be able to protect their capital. They put their money into superannuation with trust, on the basis that it is the best vehicle for long-term savings for self-funded retirement. But that might no longer be the case under this legislation. Many of those who face additional taxes under this legislation may well make a judgement as to whether or not they should keep their large superannuation balance in the system or invest it in some other way. If they do that, it will be to the cost of the system and to all the other Australians who trust in superannuation. If we really value super, we have to support it, not discourage it.

See this speech in context