Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Superannuation (Excess Non-Concessional Contributions Tax) Amendment (DisabilityCare Australia) Bill 2013 is part of a package of measures increasing the Medicare levy by half a percentage point.

This bill contains consequential amendments as a result of the increase in the Medicare levy, contained in the Medicare Levy Amendment (DisabilityCare Australia) Bill 2013.

Contributions to superannuation are subject to a number of different caps, which vary depending on the age and retirement status of the person making the contribution and on whether the contribution is made out of before- or after-tax income. These caps exist to ensure that the amount of concessionally taxed superannuation benefits that a person may receive is sustainable and appropriately targeted.

The amount by which a person's after-tax contribution to their superannuation exceeds the non-concessional cap is currently taxed at a rate of 46.5 per cent. This is the sum of the top marginal personal tax rate of 45 per cent and the current Medicare levy of 1.5 per cent.

The Superannuation (Excess Non-concessional Contributions Tax) Amendment (DisabilityCare Australia) Bill 2013 will increase the rate at which tax on excess non-concessional contributions is payable.

From 1 July 2014, this rate will increase by half a percentage point, to 47 per cent, and will apply to an individual's excess contributions for a financial year. This reflects the half a percentage point increase in the Medicare levy.

These consequential amendments will help to ensure the integrity of the tax system.

The revenue from this package of bills will be used to provide a strong, stable and continuous funding stream for DisabilityCare Australia.

Further details of the bill are set out in the explanatory memorandum for the package of bills.

Debate adjourned.