Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Human Services and Minister for Financial Services, Superannuation and Corporate Law. What will be the impact of the government’s Stronger, Fairer, Simpler superannuation reforms for low-income earners, and what threats are there to the delivery of those reforms?

Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Link to this | Hansard source

I thank the member for her question. It is the case that low-income earners receive fewer tax concessions for their contributions to superannuation than high-income earners. When a worker puts money into superannuation it attracts a 15 per cent tax rate. For some Australian workers, this is considerably less than their marginal tax rate of 30, 37 or 45 per cent. There are 3.5 million workers who earn less than $37,000 a year and therefore face income-tax rates of 15 per cent or less. For these Australians, there is very limited incentive to save through superannuation. This is a situation that the previous government was happy with for 12 years, but it is not a situation that is acceptable to this government.

That is why the government has decided to give back the contributions tax to low-income earners—those who earn up to $37,000—up to a maximum of $500. These are the people with the least money set aside for retirement. These are the people who need more assistance. It is worth bearing in mind that if you take into account the government’s increase in the superannuation guarantee from nine per cent to 12 per cent, together with the rebate of the contributions tax and a $1,000 member contribution matched by the government, low-income earners will see their effective superannuation contributions increased to 19 per cent of their wages—something this government is very proud of and something which stands in contrast with those opposite.

It also complements the government’s moves to provide more incentives to save through non-superannuation for low- and middle-income earners. Of the 5.7 million taxpayers expected to benefit from the discount on interest through bank accounts and credit unions and building societies, three-quarters of those have taxable incomes of $80,000 or less.

All these are to be funded by the resource super profits tax, all measures opposed by the opposition. Let us make it 100 per cent crystal clear. Let us make it the gospel truth. The opposition stands opposed to tax cuts for low- and middle-income earners who are trying to save. They oppose tax cuts for low- and middle-income earners. They rage on behalf of mining companies, they rail on behalf of mining executives, but when it comes to tax cuts for low- and middle-income earners they are worse than silent; they actively oppose a tax cut. I guess low- and middle-income earners cannot bankroll a Liberal Party election campaign. That is the difference between their approach and our approach.

We heard previously from the Treasurer about how the Liberal Party are very good at running scare campaigns against major economic reform. They opposed the petroleum resource rent tax, and they were wrong. They opposed national superannuation, and they were wrong. This is the Leader of the Opposition who told this House in 1995, ‘Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.’ That is what this Leader of the Opposition said. I reckon the biggest con job is the Leader of the Opposition, who says mining companies pay too much tax but does not care about low- and middle-income earners showing a bit of aspiration, trying to save for their future, and says they should pay more tax. If the Leader of the Opposition wants to connect with working families, he should back our plan to give them a tax break for saving. That would be regarded as real action.