Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That all the words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading the House is of the opinion:

(1) that the government has made clear its intentions of creating a two tiered system of health care by hitting vulnerable Australians with extra out-of-pocket costs while considering further cuts to payments and support;

(2) that savings generated under this Bill must be reinvested to enhance health care affordability and universally accessible health care for all Australians; and

(3) that it was an Australian Labor Government that revolutionised health care in 1983 with the establishment of Medicare and will always defend the right of every Australian to universal, affordable and high quality health care."

The Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014 before the House goes to matters of taxation, superannuation and health care. They are matters with which Labor are strongly familiar, as the party that laid down many of the key foundations for our tax, superannuation and health-care system. We think typically of John Curtin as being the Prime Minister who brought the troops home to save Australia against the opposition of conservatives of the day. But as John Edwards's splendid book Curtin's Giftalso points out, one of the great enduring legacies of John Curtin was uniform income tax, a centre of Commonwealth power that is the substance of its fiscal policy effectiveness and which gives the Australian Commonwealth a unity of purpose through the taxation system. Labor are also the party that created universal superannuation and expanded universal superannuation—again over the objections of conservatives of the day. Labor therefore support schedules 1 and 2 in the bill, which go to penalties for promoters of schemes that result in the illegal early release of superannuation funds and penalties for contraventions relating to self-managed superannuation funds.

Making sure that promoters do not engage in schemes which undermine the contributions made by working Australians to their superannuation is fundamental to a rigorous superannuation scheme. Labor support schedule 2, which ensures the integrity of self-managed superannuation schemes. Labor is the party of superannuation. By contrast, the Prime Minister said in this place on 25 September 1995:

Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.

The Prime Minister even said at a press conference on 23 March 2012:

We have always as a Coalition been against compulsory superannuation increases.

By contrast, Labor is proud to have put in place a system which ensures that working people can retire with dignity, a system which makes sure that working people have a nest egg available for them at retirement. So Labor is supporting the superannuation aspects of this bill.

Labor also supports schedule 4, which adds the National Arboretum Canberra Fund and the Prince's Charities Australia Ltd, as specifically listed deductible gift recipient funds and extends the existing listing of the Bali Peace Park Association Inc. As a member representing the great city of Canberra, I add my support to the National Arboretum for the work that it has done. It is an extraordinary facility which is there for generations to come. The building of an arboretum is a classic intergenerational gift because small trees planted today may only be enjoyed by our children and grandchildren. The National Arboretum is a place where Canberrans enjoy recreation, public events and weddings—the Margaret Whitlam Pavilion having become one of the most popular wedding venues in Canberra. I commend the many volunteers and donors who have worked together to make the National Arboretum such a success.

The bill also amends the Income Tax Assessment Act 1936 to phase out the net medical expenses tax offset by the end of 2018-19 income year. From income years 2013-14 to 2018-19, that tax offset will be subject to transitional arrangements. This was a recommendation that flowed from the Henry tax review. The Henry tax review recommended that NMETO be removed, for several reasons. These were that it does not provide assistance when the expense is incurred as claimed at the end of the income year, that it is claimed by an individual but assessed on a family basis, that it is inequitable for individuals who must incur the same cost as a family in order to make a claim and that low-income families with higher out-of-pocket medical expenses cannot claim the offset because of insufficient tax liability. In the jargon, NMETO is not refundable and so is in that sense regressive.

It was a Labor proposal to phase out NMETO, and Labor stands ready to support sensible tax reforms. It is absolutely vital that we have support in this House for an ongoing and sustainable healthcare system. I spoke at the start of my speech about Labor's role in building the tax system and the superannuation system, but it is Medicare which is perhaps one of Labor's great achievements. In an article in 2011, Bill Bowtell, in the journal Voice, told the story of the creation of Medicare. He pointed out that in 1969 Medibank was a crucial factor in securing the great swing to Whitlam Labor and to propelling Labor to power in 1972. It was, as Mr Bowtell put it, 'a simple, bold and deeply radical reform'.

The coalition's refusal to pass the Medibank legislation in the Senate helped to bring about the 1974 double dissolution, and Medibank's eventual introduction in mid-1975 helped precipitate the constitutional crisis of that year. Labor maintained its commitment to Medibank, reworking it into what is known as Medicare. That work, done so painstakingly through the years of opposition, ensured that Medicare was an even better system than Medibank by the time of the 1983 election. Mr Bowtell argues that, at that election, Medicare was perhaps the only policy agreed on unanimously by the political and industrial wings of the ALP and across its factions and the branches. The commitment to Medicare had been painstakingly built over almost 15 years between the 1969 and the 1983 elections. The speed with which Medicare was introduced after the 1983 election meant that the scheme could commence operation on 1 February 1984, after the legislation being passed through in the late 1983. But conservative opposition to Medicare continued, as indeed it did to superannuation.

The coalition advocated the repeal of Medicare at the 1984 election, at the 1987 election, at the 1990 election and at the 1993 election.    It is staggering to think that a little over 20 years ago, if a coalition government under John Hewson had been elected, Medicare would be gone. Indeed, the only substantial commitment made by John Howard after taking on the leadership was to accept the Medicare system in its entirety. It took from 1969 to 1996, nearly a generation, for Medibank and Medicare to pass from a mere idea into an established order. It is a great lesson for long-game policy reformers about the amount of work that must be done, the public advocacy that must be put in, to bring about these landmark reforms.

All of us on this side of the House are committed to seeing a Medicare system that stands the test of time. We are enormously proud of Medicare and many of us on this side of the House are worried when we hear the Minister for Health floating thought bubbles on health reform that seem to suggest a lack of commitment to the Medicare system and to maintaining the strength of primary health care.

We know when we look at the international statistics that Australia has to do better on primary health care. When a person goes into hospital it is an extremely expensive exercise, so we need to ensure that our primary healthcare system works as well as possible. We on this side of the House are proud defenders of Medicare. We support the substance of this bill today—indeed, we wrote the substance of this bill. We are proud to support a strong income tax system, a strong superannuation system and a strong Medicare system and we will fight for that inside this House and outside.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Anthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

Another amendment, another try-on by the member for Fraser. I am a little bit disappointed by the member for Fraser. I kind of like the member for Fraser. I particularly like it when he gets up and speaks about agricultural issues.

Dr Leigh interjecting—

I am sure you did. I do respect his economic views if not his economic philosophies. I know he is a very smart fellow when it comes to economics. But the other day, in fact it was 26 February, I listened earnestly at the table to the speech by the member for Fraser on appropriation bills Nos 3 and 4. In that debate, the member for Fraser quoted Peter Costello, that great Treasurer. He never won the world's best Treasurer title, unlike the member for Lilley, but for what he did for this country he certainly should have been regarded as the world's best Treasurer. The member for Fraser quoted Peter Costello not once, not twice, but indeed three times during his speech. One quote that the member for Fraser did not put forward was this one. Peter Costello said:

That makes tomorrow April 21, 2006 Debt Free Day. It is the day we pay off the mortgage.

It was the day the Liberal-Nationals government finally paid back the budget debt left by the Hawke-Keating governments. How much was that? It was $96 billion. It was called the 'Beazley black hole' by Peter Costello. It was a good quote, and I am a bit disappointed that the member for Fraser in his research on Peter Costello—and good research it was—did not actually use that quote.

I rise to speak on the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014 to which the member for Fraser has just moved amendments. As I said, it is another try-on by the member for Fraser. But we need to understand that on coming to government there were 96 tax and superannuation announcements which had not yet been legislated. We dealt with four as part of abolishing the carbon and mining taxes. This backlog was in large part the result of ad hoc and dysfunctional decision making by the previous Labor government, which created uncertainty and confusion for taxpayers and their advisors. So we moved quickly to provide clarity about those matters about which we would legislate and those which would not be proceeded with. Following the assistant Treasurer's announcement on 14 December 2013, of those 92 measures, we have resolved to proceed with 34 measures; proceed with three measures with amendments; and not proceed with 55 measures. Obviously there are measures that some in the community would like to see implemented but at least they know where we stand rather than being stuck in limbo. Looking to the future, the government has committed to having a tax white paper. This will provide an opportunity for the kind of considered, sensible, rational debate about what kind of tax system will best support productivity growth and rising living standards for the future. And that is so important.

This bill gets on with the task of implementing those 34 measures which we decided would go ahead. It includes provisions which will support a more nuanced approach to the regulation of self-managed superannuation funds by the Commissioner of Taxation. The Productivity Commission's recent research study into regulators' engagement with small businesses highlighted the need for policymakers to provide regulators with a range of enforcement tools and the ability to exercise discretion in their deployment. As a matter of good regulatory design, regulators should be able to take enforcement action which is proportionate and adapted to the nature and seriousness of the compliance breach. This kind of regime empowers regulators to take a risk based approach to their compliance and enforcement activity so that scarce resources are targeted where they are needed most.

I would like to applaud the Parliamentary Secretary to the Prime Minister, the federal member for Kooyong, who, in his 21 February media release entitled Coalition to clean-up statute books, talks about the Abbott-Truss government being committed to cutting a billion dollars in red and green tape as part of its first repeal day on which thousands of pages of spent and redundant legislation and regulation—some of which is more than a century old—will be repealed. It is a shame the carbon tax will not be repealed on that particular day; it is being held up and stymied in the Senate by the Labor-Greens alliance there.

Examples of legislation and regulations which will be repealed are an act from 1904 governing state divisions when the Royal Australian Navy was formed in 1913; a war service homes regulation which changed the rate of interest charged to a purchaser or borrower from four pounds to three pounds 15 shillings when Australia switched decimal currency in 1963; four acts from the 1950s that allowed for the construction of the Snowy Mountains Hydro Scheme, which was completed in 1974; and the Weights And Measures (Amendment) Act 1964, which set standards for calibrating imperial measuring equipment including for pints and gallons when Australia transitioned to the metric system in the early 1970s. I remember it well; I was in primary school when they changed over. We had just learned the old imperial system, and all of a sudden we had to learn metrics. But I digress.

The member for Kooyong said:

… the Rudd and Gillard governments boasted about the amount of legislation they passed, the problem though was much of it was detrimental to the economy, cutting jobs, impeding innovation and deterring investment. The fact is the Labor government introduced 975 new or amending pieces of legislation and over 21,000 additional regulations and now it is our responsibility to clean-up the mess.

We have to stop strangling small business. Small business is the engine room of the Australian economy. It is certainly the engine room of regional Australia. It is being strangled by red tape and, worse still, by green tape, and we have to get rid of that red and green tape. As the member for Kooyong states:

To give you a sense of the significant increase in the amount of legislation and regulation, it is worth mentioning that in 1912 the federal parliament passed just 43 acts and created just 254 statutory rules, while in 2012 it passed 206 acts and created 1702 regulations. There are now nearly 800 current acts of Parliament and 50,000 regulations on the Federal Register and the Abbott Government is determined to clean-up the statute books. On the Parliament’s first ever repeal day, we will repeal more than 100 acts and over 8,000 regulations.

I applaud the member for Kooyong for his diligent work in this regard. He goes on to say:

The spent and redundant legislation and regulation will be tabled in the House of Representatives on March 19 and debated as part of the Coalition’s Repeal Day on March 26.

And I say: bring it on.

Currently the Commissioner of Taxation's scope to address breaches by the trustees of self-managed superannuation funds is essentially limited to cases of serious noncompliance. In that situation, the commissioner is empowered to take serious action, such as disqualifying a fund trustee. Under the amendments contained in schedule 2, the commission will be able to issue directions to trustees to rectify their actions or undertake further education, and there will be penalties where those directions and certain other provisions of the superannuation law are not complied with.

Schedule 1 of the bill also bolsters the integrity of the superannuation industry by introducing penalties for those who promote illegal early release schemes. Such schemes are marketed to people as a way of accessing their superannuation savings earlier than they are eligible to under the law. Promoters typically take a portion of their victims'—and I do use the word 'victims' there—superannuation savings as their fee. Promoters of illegal release schemes can currently be pursued, in some circumstances, by either the Commissioner of Taxation or by the Australian Securities and Investments Commission. These new provisions will establish a clear and specific regime. Consistent with principles of good regulatory design, schedule 1 employs civil penalties and the scope to escalate to criminal sanctions where dishonesty or an intention to defraud is involved.

Promoters of illegal release schemes exploit vulnerable people and effectively steal a significant part of their retirement savings; their behaviour deserves to be punished. People who have saved hard, worked hard and had that nest egg put away do not deserve this kind of practice, and the coalition is going to move to see that this kind of action receives the appropriate punishment.

Schedule 3 gives effect to the phase-out of the net medical expenses tax offset. NMETO was poorly targeted and ineffective in delivering timely support. As a non-refundable tax offset, NMETO delivered nothing to low-income earners, with small or no tax liability but high out-of-pocket expenses. The National Disability Insurance Scheme is expected to cover all expenses previously covered by NMETO for those who have a funded support plan.

The NDIS is a good idea; it is a very good idea. I certainly support it. In fact, I was the first federal member in New South Wales to actually sign up to the NDIS supporters agreement. It possibly ranks as one of the only good ideas to emerge from the Rudd-Gillard-Rudd era. But it is telling that all we got from Labor in the lead-up to the election was glossy ads and brochures promising some of the most vulnerable members of our community that their lives would be better. I think it is unconscionable to raise the hopes of vulnerable people without knowing that you can deliver. We are in a very economically challenging time, but we will deliver. The coalition government will deliver. Labor has left us to make good on those promises, and we will. We will deliver an NDIS which supports people with a disability to be independent and in control of their lives to the greatest extent possible.

We will deliver an NDIS that is here to stay, with strong foundations that are financially sustainable. We will also be up-front about the difficult choices we face in ensuring that our healthcare system is sustainable into the future, and it is going to be difficult. Morris Iemma—a former Labor Premier of New South Wales, and a good man; he was also the health minister prior to becoming Premier—once said that, if the New South Wales government had not taken action, the entire state budget would be consumed wholly and solely by the health budget, by the needs and strains placed upon that state health budget.

Those opposite in federal Labor will no doubt continue their scaremongering about a so-called 'GP tax'; yet another blatant attempt to distract from Labor's record in office; and it was not a good record. As one example, Labor promised 64 GP superclinics at a cost of $650 million. Despite being promised since 2007, 26 are still not opened, and less than 10 per cent opened on time.

As the Minister for Health has already made very clear to the parliament, the coalition recognises the importance of primary health care. That is why we are doubling the incentive for general practitioner training, to help build a health workforce which can support people in identifying health risks early and taking preventive action. That is so important, especially in rural and regional Australia, where access to health is not always ready at hand, where the tyranny of distance is an important factor in medical provisions.

I look forward to the opening of the new Wagga Wagga Base Hospital. The mental health wing was a recent great addition to the city. I acknowledged in my address-in-reply the funding that the Labor government provided to the initiative. I also applaud the state coalition government for its vital—and not before time—spending on the Wagga Wagga Base Hospital. The Griffith hospitals and the Hillston multipurpose service have also been funded, and that is needed and welcomed by those communities in the west and north-west of the Riverina electorate I am so privileged to serve.

The coalition also recognises that it is essential that the Commonwealth live within its means and starts to pay down Labor's debt. As I said, Peter Costello and the Howard government inherited a $96 billion debt. That is almost a drop in the bucket, Member for Cowper, compared to what we have now.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

Absolutely. It is a shocking mess that they have left us.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

It is a shocking mess, but we will pay it back because that is what coalition governments do. That is what we are good at. The member for Cowper—a good regional member who serves the good people of Coffs Harbour and beyond—knows that, in small business, you cannot spend more money than you earn. Families have budgets, and they cannot spend more money than they earn. But, unfortunately, those on that side do not appreciate or recognise the fact that we have debts to pay.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I ran a small business for 20 years.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

I ran a small business for a number of years, too. You wouldn't have run your own small business—

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I certainly did.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

and paid out more money than you actually received in. I wish you would apply the same principles, Member for Blair, as you did with your colleagues when you had six years on the Treasury benches.

We also recognise that it is our duty to pay down Labor's debt—not just for the parliament's sake but also for the people's sake. They are the people we serve. They are the people we represent. They are the people who work hard, earn money, pay taxes and expect us to do the job that we are paid to do. That is why we have established the Commission of Audit as the start of a conversation about the future of government spending right across the board. It is so important—right across the board. I commend the bill to the House.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this, the honourable member for Fraser has moved an amendment that all words after 'that' be omitted with a view to substituting other words, which I will not read out in length. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I do speak in support of the member for Fraser's amendment. We do agree with much in this particular legislation, the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014. The previous speaker talked about the Commission of Audit. If Labor's so-called scare campaign in relation to the impact of a GP tax was completely baseless and fallacious, it could be dispensed with right now. The Minister for Health, the member for Dickson, could walk straight into this chamber and actually rule it out unequivocally and without any reservation whatsoever. But we saw in the recent in Griffith by-election that he was in 'witness protection' the whole time—not able to say anything on the issue. The Liberal candidate in Griffith first came out in support of the $6 tax that you would have to pay every time you go to visit your GP and then he backtracked as far as he could. Fortunately, the good people on the south side of Brisbane had the guts, the courage and the wisdom to elect Terri Butler as the new member for Griffith. She will be a fine addition to this place and will make a great contribution, I am sure. I have known her for a very long time. She, like me and like the member for Port Adelaide here, strongly believes in the universality of a healthcare system.

Being from Ipswich, my local member for many, many years was Bill Hayden as the former member for Oxley, and now he is a good constituent of mine. He and Dallas are up there on their farm around the Somerset Dam, in retirement. He has always been a well-respected and venerable person in our electorate. Bill was instrumental in Medibank—the forerunner, of course, to Medicare. It has been Labor and only Labor which has established the most important reforms we have seen in this country—the PBS, Medicare, the age pension, superannuation and the NDIS. It is only Labor that makes the great reforms.

I will deal briefly with a few of the schedules in this bill and indicate our support in relation to them. We do support what the coalition government wants to do in terms of cracking down on promoters of schemes that result in illegal early release of superannuation. That is in schedule 1. In relation to schedule 2, we support the introduction of administrative directions and penalties for contravention relating to self-managed funds. They include the administrative penalties and also the education rectification directions. These are important, we think, to deal with noncompliance, and so we support them. In schedule 3 the bill makes amendments in relation to the net medical expenses tax offset, which will end by the 2018-19 income year. There will be transitional provisions in relation to that.

We also support some of the other sensible measures in schedules 1 and 2. We think that they are important to improve the honesty and integrity of the superannuation scheme, and schedule 3 needs to be supported as well. I will not go into schedule 4. The member for Fraser talked about a number of organisations which get deductibility advantages, deductible gift recipient status, which will assist them in their charitable purposes.

Like other speakers in this debate, and dealing with the amendment proposed by the member for Fraser, I want to talk about the universality of our health system, its affordability and the need to prevent the creation of a two-tiered system of health care by hitting vulnerable Australians. I also want to talk about the need for superannuation to assist vulnerable Australians. I am concerned about what I felt was the most outrageous and disgraceful thing the coalition took to the last election, and that was getting rid of the low-income superannuation contribution rebate. This will put 20,900 Blair individuals, principally women, in the position of being taxed an extra $500 a year. We are talking about 3.6 million low-income earners across this country who will end up being taxed at a higher rate than they should be. At the same time, the coalition have made clear—by their actions and their deeds—their support for the approximately 16,000 people who have assets of about $2 million by making sure that they do not pay their fair share in superannuation tax, effectively giving them a big boost to their superannuation balances

On the one hand they are taking away money from low-income families and, on the other hand, they are giving tax breaks to those people that average Australians—middle- and low-income Australians—would think would be very wealthy people.

This shows the priorities of the coalition government. It is never about struggling Australian families; it is always about 'giving it' to struggling Australian families. It is always about helping the rich and not making the rich pay their fair share of tax. They show by their policies their priorities—for example, taking away the schoolkids bonus from about 19,000 children in my electorate and the 1.3 million Australians who would get the schoolkids bonus to assist with their cost-of-living pressures. The coalition think that it is okay to take that money away from mums and dads who need that money for their kids' schoolbooks, textbooks, IT needs and their sporting and recreational school related needs. So, by their policies, those opposite show their true colours.

In the areas of superannuation and health care, they really show their true colours. We have heard protestations from those opposite, saying that the health system is out of control and we are going to be bankrupt. The previous speaker, the member for Riverina, even said that the whole of the New South Wales health budget would subsume the New South Wales government's budget. Let us put this in context. Australia spends about 9.1 per cent of its gross domestic product on health care. Compare that to Sweden, Britain Spain, New Zealand, Canada and France, who all spend more. New Zealand spends much more—about 17 per cent of its GDP.

There have been allegations and remarks by those opposite that the sword of Damocles is hovering over our health system, when in fact they know that that is not true. I defy anyone of those people opposite to go to another country and say that they prefer their health system to our health system. Our health system is not perfect—no health system is—but it is a darn sight better under a Labor government than it ever was when those opposite were in the Howard government, the Fraser government, the Menzies government or any of those other conservative governments.

We first brought in Medibank and had to fight to retain it, lost it and brought it back as Medicare. We fought election after election after election on the importance of the universality of health care in this country. The coalition had an almost road to Damascus conversion experience in 1996. John Howard used to call it a rort, just as the current Prime Minister used to call superannuation a con job. They fought against it and they have always opposed in their hearts and in their DNA the universality of health care. That is why they will not come into this place—they just will not—and rule out a GP tax that every Australian will pay when they go and see a doctor. That they will not is such an affront to us and so offensive to the Labor Party because we strongly believe it is important.

Last weekend in my electorate I launched our petition in this space. We launched it at the Winston Glades shopping centre in Flinders View. We did it 500 metres from where I live in that suburb. It is important that people stand up for Medicare. It is one of the most important defining aspects of Australia's cultural, political and health life. When we were in government we were proud of our health system. Those opposite are now in government and they are not proud of the health system. We made reforms to make Medicare stronger, and what are they doing? They are proposing and teasing us with 'reforms' to make Medicare weaker. We supported a system where your Medicare card mattered. In my electorate, the Medicare coverage is 88 per cent. When the current Prime Minister was the health minister of this country it was 67 per cent. When we left office it was about 82 per cent or better. We made a difference in primary health care across this country.

So do not give us this fake claim that the coalition are the best friends of Medicare. The coalition have never been the best friends of Medicare. Year after year and election after election they opposed Medicare and took a policy to the Australian people that they would get rid of it. It has only been in the last couple of decades that they have finally accepted that they cannot do it. But they will attack it, not front on but with guerrilla tactics on the side—like the GP levy. That is what they will do.

We invested an enormous amount in health infrastructure. The member for Riverina was in here talking about some of the great things that were done in his electorate. When I was Parliamentary Secretary for Health and Ageing and travelling around the countryside I visited numerous hospitals and facilities that we created with money that we invested. We saw 11,000 more doctors, 26,000 more nurses, and more doctors in regional and rural areas. And we had the National Party over there effectively defunding the health systems, and their colleagues and comrades in the states and territories did nothing about it. We invested a huge amount of money in better health training for doctors and shorter emergency waiting times. We saw the 'growing up smiling' package, which has made and will make a big difference. We saw the wiping out of the dental waiting lists in public hospitals, with the investment of a huge amount of money. In my area, the Ipswich and West Moreton area, we saw a five-year waiting period wiped out in a matter of months through the investment of a million dollars or more put in by a Labor government. That is what we did when we were in office. Those opposite would not have the wit or the wisdom to do anything of the kind.

On superannuation, which this legislation deals with, I want to talk about a couple of issues.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

I'm pleased that you are going to refer to the bill at this point.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I am referring to the amendment, Member for Cowper, and on the universality of health care.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I would remind the House that we have agreed to a wide-ranging debate on this bill.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I do not think he was quite up on what was happening, Mr Deputy Speaker.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

I am sure he knows exactly what is happening.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Labor is the party of superannuation, Member for Cowper. We built the world-class retirement system in this country. We had a $1.8 trillion system, but, tragically, the increase in the superannuation guarantee from nine to 12 per cent, which we proposed and started to process, will be delayed by those opposite. There has never ever been a superannuation guarantee increase at any stage in the political history of this country that those opposite have supported. They have not supported a single one. So what they have effectively done in my electorate by delaying the increase is sacrificed, delayed and hurt the retirement savings of 43,600 workers in Ipswich and the Somerset Region, who once had confidence in their retirement.

Those opposite say they are all in favour of enterprise, financial security, looking after yourself and taking the hand of government off yourself. Guess what: when it comes to superannuation, their policies are the exact opposite. If they believe those words, if they were not weasel words coming from their mouths, then they would support what we are doing on superannuation. But they have a destructive retirement savings policy for working people living in my electorate and in electorates across the country. Those opposite should hang their heads in shame when it comes to health care and superannuation.

I call on my local residents to not accept passively this GP tax, which will affect my electorate to the tune of $4.73 million annually. Sign the petition and stand up for Medicare and superannuation; write to those opposite and tell them they are wrong, as they must know in their hearts.

Andrew Giles (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make a contribution on the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014 and in support of the amendment moved by the member for Fraser. I am very pleased to follow the member for Blair—it is a bit disappointing that he is not in the chamber to hear me say so—who articulated very effectively what is at stake, particularly in the health debate. What a difference a Labor government committed to Medicare and universality makes. I also note that what is at stake for the residents of the electorate of Scullin is just that little bit more than for the residents of Blair. The member for Blair spoke of $4.73 million. Unfortunately for Scullin, the GP tax, if implemented, would cost residents in the community I represent nearly $6 million a year.

This bill amends the Superannuation Industry (Supervision) Act 1993, the Taxation Administration Act 1953, the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997 and also introduces some consequential amendments to the Fringe Benefits Tax Assessment Act 1986, the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997. The substantive components of the bill are set out in four schedules. I will for the most part confine my remarks to matters contained in schedules 1 and 3. Schedule 1 amends the Superannuation Industry (Supervision) Act to introduce penalties for promoters of schemes that result in the illegal early release of superannuation funds, and schedule 3 deals with the phasing out of the net medical expenses tax offset and certain transitional arrangements.

But I should briefly mentioned schedules 2 and 4. Schedule 2 is of some significance, having regard to the growth in the self-managed superannuation funds sector and also the value of funds held in such accounts. In the circumstances, I believe it is appropriate that we recalibrate the powers of the regulator, the Commissioner of Taxation, to enable noncompliance to be addressed effectively to support the integrity of that sector. Turning very briefly to schedule 4, this schedule in effect adds four new entities to the list of deductible tax recipients. This is uncontroversial and ought to be supported.

In terms of schedule 3, however, like my colleagues on this side of the chamber have done previously, I do welcome the government's adoption of the previous government's saving initiatives. In particular, there is just no doubt that the phasing out of the net medical expenses tax offset with appropriate transitional arrangements is a saving that is founded on sound principles of equity. It recognises that Australians who have high out-of-pocket expenses but do not have a tax liability simply do not benefit from this measure. The parliamentary secretary noted in his second reading speech that it is not well targeted, and I can only agree.

However, I do think the broader context of the bill is worth reflecting on. Given that schedule 3 of the bill results in savings in the health portfolio, surely it would be appropriate that the savings generated through this measure ought to be reinvested back into providing universal healthcare access to all Australians to ensure that they get the care they need, not the care they can afford. And given the coalition's historical opposition to the very notion of universal health care in relation to the bill before us today, surely the government should commit to putting Labor's savings back into supporting a universal healthcare scheme. After all, it was the then Leader of the Opposition who promised not to make any overall cuts to the health or education budgets. In fact, he wanted this government to be the best friend Medicare ever had. I guess anyone getting pally with the now Prime Minister must be feeling just a little bit nervous. He also used to be the best friend of Australian workers. That was another relationship that simply did not survive the transition into government. This is of course a government that says one thing and then does another.

On that note, the government and the health minister in particular have been keen to foreshadow an impending GP tax that they are seeking to impose on the people of Australia, using talk of increasing health budget demands as the pretext. The member for Blair also took us to the important contextual remarks of Australia's health spending compared to some other developed nations, which puts the lie to this assertion. Again, we see pressures that were regarded, in quite definitive terms, as a non-issue before September now seemingly having a very different standing when they are used to justify a deeply ideological approach to governing Australia. But we have seen some consistency in this remark, and I will turn to the contributions of the member for Higgins shortly. Government ministers, as opposed to backbenchers of course, consistently refused to deny this policy until during the campaign for the Griffith by-election. As the member for Griffith, who is here now, well knows, there was a weaselly worded disavowal and retreat—a retreat, but not a surrender. Now that the by-election is over, we see once again an advance on this front.

Only yesterday, the member for Higgins continued to carry the flame, and it burst into a bit of light in the Australian Financial Review. The member for Higgins characterised this potential GP tax as a 'fee' which would ensure that 'we place appropriate value on the good or service and only use the amount we really need', raising the canard that people are seeing GPs who do not need to. There is no doubt that a tax would discourage people from seeing the doctor; in fact, it would prohibit many. In Scullin, this would mean the more than 980,000 people who accessed Medicare would have to pay $5.9 million. That is quite a disincentive, to say the least.

Dr Steve Hambleton, President of the Australian Medical Association, responded to this punitive approach in February, stating:

We don't want to create a situation where people defer seeking healthcare, and that might be expensive later …

Dr Hambleton has previously articulated the AMA's position:

The AMA does not support this concept and we have made our view very well known.

What is also becoming well known is this government's contemptuous view of preventative health—something the health minister could barely mention in his contribution to the MPI debate this week. On the other hand, a recent Lancet commission, when considering global health up to 2035, recommended that countries should lower the barriers to early use of health services, increase access to disease prevention and minimise the impact of medical expenses. And today we see reported research commissioned by the Consumer Health Forum, which has found that the government's proposed GP tax would decrease access to health care and see Australians delaying access to health care, leading to higher costs overall, and that there is no evidence there will be overall cost savings as it will only compound existing problems as well as further disadvantage people. This is just an ideological project dressed up in feigned concern for cost and budget. The research also confirmed that out-of-pocket expenses already make up around 17 per cent of total healthcare expenditure in Australia.

The second point raised by the member for Higgins was that 'a fair system needs to accommodate avoidable health care costs' and 'why should these costs fall on the taxpayer' as 'one-third of Australia's disease burden is due to lifestyle risks'. It is not explained how exactly a doctor, or a nurse for that matter, should go about making moral judgements about the nature of people's illnesses when deciding whether or not they can receive treatment. And this would be the situation, with some people simply not being able to afford to be treated—early, effectively, or at all. To be pointed about other aspects of preventative health that have been debated in this place recently, there is the question of how individuals can become informed as consumers about, for example, the health properties of junk foods. I reject this Victorian, Dickensian even, differentiation of the deserving and underserving sick that has been proffered by some members opposite. There are no goodies and no baddies here, just people—all of whom deserve health care based on need.

I turn now to schedule 1, which relates to superannuation. I welcome again the adoption of the previous government's initiatives to introduce penalties for promoters of schemes that result in the early release of superannuation. I make some broader remarks here as well. Labor is the author of Australia's compulsory superannuation scheme and believes strongly in ensuring the integrity and sustainability of superannuation for all Australians. It was Labor that introduced the scheme and only Labor that seeks to ensure our national savings pool continues to grow by increasing super contributions from 9.25 per cent to 12 per cent by 2019. In government, federal Labor put in place mechanisms to lift the superannuation guarantee from nine per cent to 12 per cent. This would boost the retirement savings of 8.4 million Australians and lift retirement savings by more than $500 billion by 2037. A person aged 30 today on average full-time earnings would retire with an extra $127,000 in superannuation savings. In contrast, the coalition is delaying any further increase until 1 July 2016 and the full 12 per cent will only take effect on or after 1 July 2021.

Unfortunately, to say the very least, the government is also removing the low-income super contribution. On International Women's Day, which I think is being celebrated today by all members in this place, this is something that we cannot celebrate. I note that the removal of the low-income superannuation contribution hits women particularly hard, with 2.1 million Australian women affected. The low-income superannuation contribution is a contribution made on behalf of individuals with an adjusted taxable income of $37,000 or less in an income year. I note that the cut will take effect from 1 July last year, so this is also a retrospective measure, something we ought guard against. This move will increase superannuation taxes on one in three of Australia's lowest paid workers—this a proposal from 'the party of low taxes', a mantra we hear all too often in this place. It is telling that within weeks of coming to power the government sought to cut the super of millions of Australians earning under $37,000 while at the same time boosting the super for the 16,000 people who have over $2 million in their super balances. It speaks volumes: two tiers for a health system; two regimes of superannuation; upstairs and downstairs. For high-income earners, superannuation can be concessional. For low-income earners, there aren't effective incentives for them to contribute to their superannuation.

The other major concern about the removal of the low-income superannuation contribution is its retrospectivity. Low-income earners entered the 2013-14 financial year on the understanding that they would be refunded their superannuation tax. The coalition has changed the rules on taxpayers in the middle of the financial year without any, much less any reasonable, justification. But all of this is unsurprising when one considers the Prime Minister's previous form in relation to superannuation, a matter already touched upon by the shadow minister but I think well worth repeating. He said in 2012:

We have always as a coalition been against compulsory superannuation increases.

And more bluntly earlier on in the piece he said:

Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.

I mean, really, a con job? The coalition's delaying of the increase to the superannuation guarantee and the removal of the low-income superannuation contribution are in keeping with the Prime Minister's vendetta against superannuation. It has got nothing to do with good public policy making, much less with concerns of equity. Labor introduced compulsory superannuation to ensure that people did not retire poor. Of course, it has also done great things for the strength of our national economy, particularly through the global financial crisis. All of us have an obligation to our constituents to give them a better deal than was the case prior to compulsory superannuation—the security they deserve in retirement.

Labor, as well as being the party of superannuation, are the party of Medicare—30 years old last month, but of course it should have been 40. We are the party of universal health care, not a two-tiered system of haves and have nots. We will always stand up for the rights of all Australians to quality health care on the basis of need not capacity to pay. I am mindful, standing here, that 93 per cent of GP visits in the Scullin electorate are bulk-billed at present. In my electorate, as in electorates right across Australia, there is so much at stake for so many in keeping Medicare—in keeping our universal healthcare system.

So I am pleased to support the amendments moved by the member for Fraser. I am disappointed that the member for Riverina described it as a try-on. Really, that could not be further from the truth. Not only does the amendment open up a critical debate about the future healthcare needs of Australians and the responsibility of the Australian government in that regard; all it really does is to ask the government to mean what it said before the election. It is a tragedy that this government is a government that says one thing and does another.

Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

I, too, rise to speak on the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014. It is a pleasure to follow the member for Scullin, who has a very complex understanding of these issues and is representing the people of his electorate, particularly in relation to health needs and Medicare, very well.

This bill does a number of things. In essence, schedule 1 of the bill introduces penalties for promoters of schemes that result in the illegal early release of superannuation funds—something on which, we know, people who are in very vulnerable circumstances can come under some pressure. Schedule 2 of the bill introduces penalties for contraventions relating to self-managed superannuation funds. Schedule 4 of the bill amends the list of deductible gift recipients identified by name.

Schedule 3 is the schedule that I will focus most of my comments on, being shadow minister for health, and that is the phase-out of the net medical expenses tax offset through a transitional approach by the end of the 2018-19 income year. These were measures that Labor announced in the 2013 budget, and I am glad that the government has recognised the need for this policy. The change will make more funds available to be invested in other areas of the health portfolio. It was, whilst a difficult savings measure, in essence a savings measure which was all about ensuring that we were able to continue to invest in very important areas in the health portfolio, and I certainly appeal to the health minister to ensure that the savings raised under this measure do go back into health care, disability care and services.

As I stated, the phase-out of the net medical expenses tax offset will occur through transitional arrangements. During the income years 2013-14 through to 2018-19, people will still be able to claim for disability aids, attendant care and eligible aged-care expenses up until July 2019. It is crucial that Australians who require assistance and support for medical expenses receive that support in a fair and equitable manner.

The net medical expenses tax offset is poorly targeted, however. Australians with high out-of-pocket health expenses who do not have a tax liability do not benefit from this offset at all. That includes nearly 87 per cent of Australians aged over 65 who do not pay income tax, and it of course also covers those Australians who are on extremely low incomes, on disability support pensions and on other pensions and benefits who do not have a tax liability. Secondly, as the net medical expenses tax offset is calculated and then refunded at the end of the tax year, Australians with very high upfront costs are having to wait, often for long periods of time, until they can recoup some of their out-of-pocket expenses.

These changes as announced by Labor will certainly deliver expected savings of over $400 million over the coming three years and more into the forward estimates. That is $400 million to provide essential medicines and vaccines, critical services, workforce initiatives, and health and disability care to vulnerable Australians. These savings must be reinvested back into providing universal healthcare access to all Australians to ensure that they get the care they need and not just the care that they can afford. It is important that those savings are realised within the health portfolio and that they are committed to those areas that Labor intended to commit them to.

The government has, however, signalled a very different approach to health, and the amendment moved by my colleague really goes to the heart of what is happening in the debate about health care in our country at the moment. The government has certainly signalled its intention to Americanise our health system—to create a two-tiered system where those amongst us who are most vulnerable will certainly be worse off but will experience a different level of care to those who have the means to pay for it.

Labor fundamentally believes this is wrong. We believe in a universal healthcare system where a person's financial position should not and does not affect the quality or the timeliness of their access to health care. The Prime Minister and this government seem to be intent on destroying the universal healthcare system that is Australia's Medicare system.

The government has already hit Australians with the biggest increase to private health insurance premiums in over a decade. This decision was announced just two days before Christmas, in an attempt to sneak that decision out with as little commentary as possible—that is, until people started receiving the letters from their insurers, some of which were notifying them of an eight per cent increase in their premiums. I have heard countless stories of Australians concerned at the thought of having to pay eight per cent more for their private health insurance. They are additionally concerned about the risk that they now face of a potential $6 fee—a $6 tax—to go and see their GP.

When Labor was in government, ministers would routinely take several months to negotiate and approve increases to private health insurance premiums. These negotiations were not always easy and would often involve making sure that insurers were justified in their increase proposals and that Australian consumers were getting the very best deal possible. That is clearly not what has happened in this case. It was a very rapid decision which resulted in the highest premium increase for private health insurance in almost a decade.

Following the hit to the hip pocket on private health insurance, we now also know that the government is actively considering a proposal to tax Australians when they go to visit a GP. Governments should be encouraging people to visit general practitioners to seek primary care and prevention, to pick up any illnesses as early as possible, to help Australians to manage their chronic conditions, to keep people out of hospitals and to keep them well. Not only do primary care and prevention save money for every Australian, but the benefits of healthy people over the longer term, I am absolutely sure, are invaluable to families and communities everywhere. The savings to health care in caring for people at the primary care level are also significant, and healthy people are economically productive people as well. GPs in primary care are the cheaper end of the health system. They are an incredibly vital end, but they are not the end of the health system where the greatest costs are incurred.

While Labor were in government, we fought to increase bulk-billing rates to their highest levels ever, particularly by providing incentives for doctors who bulk-billed their concessional patients. Now all patients, including concessional patients, could potentially be faced with a $6 tax to visit their GP. That, in essence, ends bulk-billing, full stop—no more bulk-billing at all. It is a proposal that should not be considered at all and should certainly be fought against.

Some members opposite may say that $6 is not very much. The member for Gilmore said that it is just a cup of coffee. But, for some of our most vulnerable families, that $6 is actually the difference between putting food on the table that week and looking after their sick child and visiting a doctor. We also know that many families have more than one child and that illness goes through families very quickly, and it is often not just one doctor visit that we are talking about. People with chronic conditions, too, often have numerous visits to a general practitioner, so it is not just a one-off $6 fee that we are talking about; it is a $6 tax every time you go to visit a general practitioner.

I want to give you some examples of how this tax is likely to cost Australians in each of five electorates. Residents in the electorate of Chifley, for example, are looking at an extra $8.3 million per year in this GP tax—over $8 million in taxes to see their family doctor—should this proposal go forward. The member for Lindsay can expect her constituents to fork out close to $6½ million each year in this tax. Australians living in Barton, in Wakefield and in Port Adelaide can all expect to pay around $6 million in GP taxes every year. These net numbers are definitely not 'just a cup of coffee' for Australian families in these electorates.

This is something that the government never talked about when they were in opposition. They certainly never talked about it during the election campaign. But they are certainly flagging their intentions now, and no amount of weasel words can possibly say that the government do not have this proposal under active consideration. They are either being entirely disingenuous in saying that, or they are being incredibly ill disciplined. A senator for Western Australia came out and argued that this co-payment is essential, and the member for Higgins is running an entirely dubious line in her argument that it is not really a tax; it is just a fee, and really it is important that people pay this if we are going to see the differential in health services change in what happens in general practice.

In fact, her article particularly misses the point. The entire point of putting a price signal on general practice is to stop people going. That is the problem with the entire proposal. You do not want to stop people going to the doctor, because it is exactly what you want to encourage people to do. The entire premise of Medicare—in fact, the first principle of Medicare—is access. It is access to GPs. Put a barrier in place of access and Medicare is gone.

In terms of the other proposals that we have seen really strongly flagged by this government, this is obviously one of the very significant proposals. But the next proposal is the idea of opening up general practice to private health insurance products. This is a very, very serious threat to the universal nature of Medicare and the universal nature of our healthcare system. If you do that, if you start—like the trials that are already going on in Queensland and other parts of the country—to open up the possibility of a private health insurance product being available for general practice, you go absolutely down the pathway of there being doctors who provide private health insurance patients with a particular service, and then the rest of the community. That is what you end up doing if you open up a private health insurance product to Medicare billable services in general practice. It is a very serious threat to the universality of our Medicare system if the government goes down that pathway.

I am not convinced, on all of the advice that I have seen, that the private health insurance trials in fact comply with the existing legislation, and I will certainly be pursuing that matter. Certainly the government not only appears to be unconcerned about those trials but also seems to be saying, 'This is the best thing since sliced bread, and we're going to really open this whole market up.' If you do that, Medicare is gone. It is absolutely gone. So I would caution against opening that private health insurance product up to GP services in that way.

We saw the government approve the highest premium increases at Christmas time. With a nationwide trial of GP services accessing private health insurance, how much will Australians be paying for their private health insurers, and what will also happen to our health system if we allow private health insurance into this domain? The government is clearly not here making sure that Australians get access to the health care they need. It is important that Australians do get access to the health care they need, not just to the health care they can afford.

As I have said in this place previously, to date all we have seen from the government are concessions to industry to the detriment of consumers and cuts to the health portfolio, to important infrastructure projects and to organisations operating in preventative health, such as the Alcohol and Other Drugs Council. That body had been providing advice since Robert Menzies was Prime Minister. Sadly, that organisation closed its doors forever on Friday last with no signs of regret or any remorse from those opposite at its having done so. From everything this government has done to date regarding health, it is clear that health is not a priority for them. I have no confidence that this government is at all interested in providing universal health care.

I will go back to the bill in the last few seconds that I have left. This bill really is an important one in terms of providing savings within the health portfolio to be reinvested in those important areas of health and disability care. I certainly support that proposal. I equally support the amendment. This has been a very important debate about what we are doing in health and what is actually happening in terms of what the government is proposing for health. So far, the signs are not at all promising in terms of our continuing to have a decent healthcare system in this country. Certainly, under this government we will no longer have a universal Medicare system—to the shame of this country.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014. Superannuation is a very important area, and I think that both sides of the House would agree that we need to encourage as many young people as possible to get into investing in superannuation. One of the problems we have had over many years is to encourage that contribution very early on in the working life of young people. The more that they can invest in the early stages of their career, the greater the nest egg there will be upon their retirement. I guess that, when a young person is under the age of 25, retirement seems a long way off. But, as we wake up and find ourselves on the wrong side of 50, retirement does not appear quite so far away. It is vital that young people make as much of a contribution as possible early on in their career. It is the compounding of those early contributions that will ensure that young people will have a sizeable retirement nest egg.

Regrettably, with the ageing of the population, many people who are currently moving into their retirement years grew up in an era where superannuation was not considered. Many of those people have insufficient savings to provide the sort of retirement that they would enjoy and require the use of pension benefits to supplement the retirement savings they have. I think education is incredibly important, to impart to young people the wisdom and the benefit of saving early in their working lives so that those savings, with the benefit of compounding, will amass to a significant sum later on, in their retirement. Education is a very important part of that process.

As legislators, we have to ensure that legislation surrounding superannuation is consistent. One of the great barriers to people at a young age putting money into a superannuation fund—money that will be in a superannuation system for perhaps 40 years—is certainty. People need the certainty to invest. When they put their money in, they need a degree of certainty—they need to feel confident that the rules are not going to change. On both sides of the House, we have had a tendency to change the superannuation rules. There are often good reasons at the time, but, regrettably, the impact of that is that it diminishes the amount of confidence that people have in the system. That is a very important point. When you invest money in super, you should do so with the reasonable expectation that the rules that apply when the money goes in will stay the same during the life of that investment. Regrettably, that has not been so. As legislators, we need to be mindful of the fact that we need to keep the number of changes to the system to an absolute minimum.

The world is a changing place, and there will always be requirements that legislation be amended to reflect the issues of the day. But we should always be focused on ensuring that those changes are kept to a minimum. I note that the Treasurer is very focused on the importance of superannuation and very focused on the importance of a strong and stable financial system. I noted that the final terms of reference for the financial system inquiry were released on 20 December 2013. I know, Deputy Speaker, that you would be interested to note that the terms of reference include a wide range of matters. Item 1 in the terms of reference is:

The Inquiry will report on the consequences of developments in the Australian financial system since the 1997 Financial System Inquiry and the global financial crisis, including implications for:

1.how Australia funds its growth;

2.domestic competition and international competitiveness; and

3.the current cost, quality, safety and availability of financial services, products and capital for users.

Item 2 of the terms of reference is:

The Inquiry will refresh the philosophy, principles and objectives underpinning the development of a well-functioning financial system, including:

1. Balancing competition, innovation, efficiency, stability and consumer protection;

2. How financial risk is allocated and systemic risk is managed;

3. Assessing the effectiveness and need for financial regulation, including its impact on costs, flexibility, innovation, industry and among users;

4 .the role of Government; and

5. The role, objectives, funding and performance of financial regulators including an international comparison.

Terms of reference No. 3 is:

The Inquiry will identify and consider the emerging opportunities and challenges that are likely to drive further change in the global and domestic financial system, including:

1. The role and impact of new technologies, market innovations and changing consumer preferences and demography;

2. International integration, including international financial regulation;

3. Changes in the way Australia sources and distributes capital, including the intermediation of savings through banks, non-bank financial institutions, insurance companies, superannuation funds and capital markets;

4. Changing organisational structures in the financial sector;

5. Corporate governance structures across the financial system and how they affect stakeholder interests; and

6. Developments in the payment system.

The fourth item in the terms of reference is:

The Inquiry will recommend policy options that:

1. Promote a competitive and stable financial system that contributes to Australia’s productivity growth;

2. Promote the efficient allocation of capital and cost efficient access and services for users;

3. Meet the needs of users with appropriate financial products and services;

4. Create an environment conducive to dynamic and innovative financial service providers; and

5. Relate to other matters that fall within this terms of reference.

The fifth item in the terms of reference is:

The inquiry will take account of the regulation of the general operation of companies and trusts to the extent this impinges on the efficiency and effective allocation of capital within the financial system.

Item 6 of the terms of reference is:

The inquiry will examine the taxation of financial arrangements, products or institutions to the extent these impinge on the efficient and effective allocation of capital by the financial system, and provide observations that could inform the tax white paper.

Item 7 is:

In reaching its conclusions, the inquiry will take account of, but not make recommendations on the objectives and procedures of the Reserve Bank of Australia in its conduct of monetary policy.

Item 8 of the terms of reference is:

The inquiry may invite submissions and seek information from any persons or bodies.

Item 9 is:

The inquiry will consult extensively, both domestically and globally. It will publish an interim report in mid-2014 setting out initial findings and seek public feedback. A final report is to be provided to the Treasurer by November 2014.

This will be a very important inquiry, and it shows the importance the government places on the financial system, but I know the members opposite see that the value of a strong financial system is one of the things that got us through the global financial crisis. We had strong regulations and strong banks, and the system basically held together as such. I think it is absolutely important that members of the public have confidence in the banking system, and an inquiry such as this just reinforces that confidence.

The bill before the House today relates to superannuation. I think the superannuation system is very much an important part of our financial system. The member for Bradfield may wish to make a comment on these bills as we progress throughout the evening. It is absolutely vital that we have a strong superannuation system and that the superannuation system meets the needs of young people and older Australians alike. I think one of the benefits we have seen in recent years is that we have had coming into the market a wide range of different products that can better meet the needs of investors. Investors can choose to have a more risk-averse approach to their portfolios. If you go back many years, it was very much a black-and-gold product that was on the market, and people did not think very carefully or intensely about the superannuation options they may have chosen. They may have gone to an adviser but not have taken a very proactive role.

I think that has changed a lot in recent years; people have become much more actively involved in the sort of superannuation fund in which they invest. They may go for a balanced fund or a growth fund or perhaps confine their investments to one particular sector of the market. Perhaps it is a fixed-interest investment where the investor seeks the perceived security of a fixed-interest fund so that they are not exposed to the wider vagaries of the property market, the international markets or the equities market. It is an interesting option being put forward. People have the opportunity to get more actively involved in their super, and I think that is a good thing. I think it is a good thing that people watch their investments more closely and are very active in managing them, perhaps choosing to shift from one particular type of investment to another—perhaps moving from a balanced fund to a growth fund if that follows their investment wishes. It is good to have that degree of engagement. I think it is a level of engagement that did not exist many years ago, when it was much more a set-and-forget option.

We have a range of quality investment funds out in the market. I think investors can generally be quite assured that we have a range of fine market funds. We have the industry funds and the private sector funds. All contribute to a very diverse range of options for investors in this important area of superannuation.

I said at the start of my contribution that it is vitally important that we get young people engaged and investing very early in their working lives so that they can ensure that they have the sort of lifestyle they want into the future. As living standards in this country have increased over the years, people's expectations of the quality of life they wish to enjoy in their later years has certainly increased. People expect a much higher standard of living in retirement than they once did. People are also living much longer. At the time of Federation, life expectancy was 20 years or more lower than it is today. So it is vital that we have an investment fund that when we retire is sufficient to meet our needs over the years ahead. One of the things that worries many people is that they simply do not have the amount of money in their superannuation fund that once they reach retirement will be sufficient to see them through all of their years.

Another factor in that is that people tend to travel when they retire. Many people are retiring at a younger age, living to a ripe old age and enjoying travelling the world, something our grandparents did not do nearly so much of. People have an increasing expectation that they will be able to travel the world in retirement and enjoy a range of experiences after work. That is certainly expensive, and something for which we have to ensure that we put as much money as possible into superannuation.

Superannuation is a very important area of financial services. I note the terms of reference by the Treasurer in relation to the financial system inquiry, which very much look at ensuring that we have a very strong financial system so that people can be assured that the various financial institutions in the country are operating efficiently and effectively, keeping our deposits and superannuation savings safe. I must say it is a very interesting area and one that I know is occupying the time of people on this side of the House as well as those on the other side of the House. They may choose to interject at some point in time—I am quite happy to accept an interjection—

Andrew Giles (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

Can you pad it out for a minute and nine seconds?

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

Indeed! But it is an important area. Superannuation is a vitally important area.

Mr Giles interjecting—

I have not mentioned the carbon tax at this point in time but, as you mentioned the carbon tax, I would have to say that there is the potential for the carbon tax to detract significantly from the value of superannuation savings due to increased inflation. The carbon tax has been a real problem in driving up the cost of living. It would certainly have an impact on the value of your savings' nest egg when inflation is taken into account. I see the honourable Mr Ciobo has arrived in the chamber.

In conclusion, I reiterate my commitment to the importance of superannuation in the financial system. I commend the legislation to the House.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

I call the honourable member for Griffith and I welcome her to the Australian parliament.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker, and thank you for the promotion. I will address the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014 and the amendment moved by the member for Fraser, a learned and wise member who has moved an excellent amendment. The reason I am so passionate about that amendment is that I care deeply about health care in this country. It was a very strong issue in the Griffith by-election and arose on a number of occasions. In fact, it was during that by-election that Liberal-National Party people across the country were saying contradictory things about the proposal for a GP tax. But people on our side are very clear about the GP tax proposal. We do not support the GP tax proposal because we support universal health care. As one of the doctors in my electorate said during that by-election campaign, GPs are very important because they are gatekeepers. They are not gatekeepers to get people into hospital; they are gatekeepers to keep people out of hospital. It is such an important point.

As we have heard today, the whole point of imposing the GP tax is to reduce people's propensity to go to the doctor—in other words, to discourage people from going to the GP. On our side of the House, we believe that people should be encouraged, not discouraged, to go to a GP. The House might be aware and you, Mr Deputy Speaker Vasta, might be aware of a Harvard university study in 2009 that found that around 45,000 Americans had died because of delayed treatment for patient cost consideration reasons. No-one wants to see people failing to get the medical help that they need. We should not be discouraging people from going to the GP. The idea behind discouraging people from going to the GP seems to be that people who go to the GP do not understand the value of health care. That seems to be the idea; that is why people want to send a price signal.

The proposal for the GP tax is very interesting. If you read the entire proposal, at the end the author says, 'By the way, maybe we should find out whether people really are going to the GP unnecessarily.' It is symptomatic of the lack of evidence that seems to be the basis of so many of these attacks on universal health care. We do not know if there are people who are going to the GP unnecessarily, but I do believe in the benefit of people getting early medical help. I believe that we should not discourage people from going to the GP and that is why I will always oppose GP taxes and attacks on universal health care.

As the shadow minister, the member for Ballarat, said earlier in this debate, the American system is a cautionary tale for us. The US is one of only three countries in the OECD where more than 50 per cent of healthcare expenditure is borne by private sources rather than public sources. This GP tax proposal and other moves to shift the cost of health care on to private individuals and insurers is a slippery slope to pushing more of the cost of health care on to private individuals and private sources. What sort of example does the US system set us? It is an example where 17.7 per cent of the GDP is spent on health care. That compares very favourably with ours, which is about the OECD average. When you look at the per capita spend on health care in the US, it is an even starker picture—US$8,508 per head is spent on health care, according to the OECD, compared with our spend of US$3,800 per head.

If you look at the health inflation figures for US health care, you will see that health inflation decoupled with general inflation some time ago and has been rising sharply for a number of years over the past 30 years. In fact, health inflation is a serious problem in the US. As the Rand Corporation have said, one of the problems that the US healthcare system faces is that virtually every actor in the US healthcare system is focused on maximising revenue. That should not be the focus of health care. The focus of health care should be, as Labor people know, making sure that people get the health care that they need, not just the health care that they can afford. So I appreciate very much the member for Fraser's amendment.

I now turn to the substantive bill. Compulsory superannuation is one of the finest achievements of our nation's social democracy. As Bill Shorten previously said, Labor are the party of superannuation. We created it and we are the only party interested in growing the retirement savings of hardworking Australians. Superannuation serves Australia's interests by significantly boosting our national savings and by reducing pressure on the age pension. But the coalition, with the greatest respect, has always been dragged kicking and screaming to compulsory superannuation, describing it variously as a racket, a con job and a confidence trick. Mr Abbott has said that compulsory superannuation is one of the biggest con jobs ever foisted on the Australian people by government, as my colleague the member for Scullin noted before. Mr Abbott has also observed that the coalition have always been against compulsory superannuation increases. That is quite correct: the coalition have opposed every increase to compulsory superannuation. In contrast, Labor have a proven commitment to bolstering Australians' retirement savings.

In 2013, when Labor increased the superannuation guarantee, around 8.4 million hardworking Australians saw more going into their retirement savings. But, since Mr Abbott's coalition government was elected, it has announced superannuation measures aimed at helping more well-off people at the expense of people on ordinary incomes. It has introduced legislation to freeze the superannuation guarantee at 9¼ per cent and to delay the increase to 12 per cent by two years. It has moved to take away the low-income superannuation contribution—a superannuation contribution made on behalf of individuals with an adjusted taxable income of $37,000 or less, effectively a $500 tax cut—and it wants to do so retrospectively from 1 July 2013.

As the member for Scullin said, low-income earners entered this financial year on the understanding that they would be refunded their superannuation tax but now, part-way through the year, the Liberal-Nationals are changing the rules. This move, as the member for Scullin has observed, will increase superannuation taxes on one in three of Australia's lowest paid workers. The explanatory memorandum to the repeal bill says that the government will revisit incentives in superannuation for low-income earners once the budget is back in a strong surplus. But that is a change that high-income earners do not have to wait for. High-income earners do not have to wait for superannuation measures to improve their retirement savings.

The coalition government has demonstrated it is prepared to give tax breaks to the more well-off people, while taking away the low-income superannuation contribution. It has decided not to close loopholes that allow people to get around the contributions cap and engage in tax avoidance. It has decided not to proceed with Labor's move to better target the tax exemptions for earning on superannuation assets supporting income streams. In other words, it is giving people with large superannuation fund balances a tax break. Under the reform, earnings from assets supporting income streams above $100,000 would have been taxed at the concessional tax rate of 15 per cent, which is the same tax rate as we all pay in the accumulation phase. As Bill Shorten said announcing the reform, an individual with $100,000 of tax-exempt earnings typically receives more government assistance than someone on the maximum rate of the single age pension.

The reform that we were introducing, that this government has decided not to proceed with, would help make the superannuation system fairer and more sustainable and would help restore a number of the original intentions of the system. Labor was not talking about the self-managed superannuation funds of Australians of ordinary means. Labor was talking about well-off Australians who were getting a tax break of greater value than the taxpayer assistance provided to age pensioners. Instead of closing loopholes and making tax arrangements fairer for more well-off members of our community, the Liberal-Nationals are taking away the modest contribution for low-income earners. Against this background of the coalition opposing Labor superannuation measures and opposing changes to retirement savings arrangements aimed at assisting people on ordinary incomes, it is pleasing that the coalition has now, albeit begrudgingly, decided to implement some of Labor's superannuation reforms in the bill presently before the House. It contains Labor reforms to assist in lighter touch regulation of self-managed superannuation funds and to equip the regulators with tools to protect working people and retirees from unscrupulous people and corporations who promote illegal early release of funds.

Regrettably, the bill also represents missed opportunities to act in the interests of working people and retirees. The Liberal-National government has decided not to proceed with a number of reforms, such as those arising from the Cooper review, initiated by the former Labor government, and other reforms. For example, the government is not going to go ahead with the reform that would require funds to report contributions either quarterly or every six months.

The purpose of that reform is to alert people when their employer is not paying superannuation contributions. This is crucial. Too often, working people assume that superannuation is being paid as the law requires. Sometimes they even make that assumption because the employer gives them a pay slip which indicates that the superannuation is being paid when it has not been. Obviously, that has a direct effect on a member's superannuation account balance. When an employer is solvent, that may be able to be rectified conveniently, but when an employer is insolvent, it can be very hard to recover unpaid superannuation. Worse, if contributions are not paid, insurance and benefits to which the member would otherwise be entitled may not be available. Losing their coverage because superannuation has not been paid can have catastrophic consequences for members who cannot work because of injury or illness. That is why our reform, which would have alerted working people when the employer was not meeting its superannuation obligations, is important. The coalition has not taken up the opportunity in today's bill to implement that reform—it has decided not to implement it.

Another missed opportunity is the deferred lifetime annuities. The superannuation sector had clearly called for the change to be made in October last year when the acting CEO of the Association of Superannuation Funds, Ross Clare, called on the government to make the change. He said:

While we all want to live a long life in retirement, sometimes this can have financial consequences, which is why developing products which address longevity risk is crucial. With the Government committed to addressing the impediments which hinder the development and use of retirement income stream products, now is an opportune time to consider the positive adjustments that can be made to help facilitate this.

The government is not presently addressing the deferred lifetime annuities issue. It is not currently implementing this reform. Labor, on the other hand, announced in April 2013 that we would make this change. Another reform not presently being pursued is clarifying the position of certain superannuation trust deed clauses. That reform would have ensured that trust deed clauses could not be used to prevent excess amounts from being counted as contributions. In other words, it was a measure to close a tax avoidance loophole. The measure was announced because the government became aware of situations where a fund could include a clause in its trust deed designed to treat amounts that would otherwise have been considered contributions to the fund as not having been accepted by the fund if those contributions would lead to a breach of the contributions caps. Under the planned reform, the fund would have been deemed to have accepted such contributions despite the trustee clause if they had not been returned promptly and had been intermingled with the assets of the fund. This is a tax avoidance loophole that the coalition is now refusing to close.

Another point is about preventing abuse of superannuation funds. Ensuring superannuation is used for retirement savings purposes, not for ulterior purposes, is a matter of strong public and private interest, yet the government has forgone an opportunity to close a loophole in relation to acquisitions and disposals of assets between self-managed superannuation funds and related entities. Having done so, it has flouted the Super System Review Panel report recommendations, which expressed in strong terms concerns about self-managed superannuation funds and related entities acquiring or disposing of assets between one another without doing it through the market mechanisms that existed or without getting independent valuation. But the bill we are considering today has missed the opportunity to make that reform and to give effect to those recommendations.

As I said, the measures that the government is now backing—including lighter touch regulation tools and equipping regulators to tackle promoters of illegal early payments—are Labor reforms. They are Labor reforms that arose because Labor has a commitment to superannuation and continuing to improve our superannuation system, in the interests of working Australians. We will always work to try to improve superannuation, and that is why I agree that it is important that regulators have a full suite of powers to ensure compliance with superannuation laws. Sometimes a heavy hand is required, which the Super System Review referred to as the 'nuclear option', but oftentimes regulators just need light touch regulation for self-managed superannuation fund trustees so that they can give the education notices, the process change notices and the lower administrative penalties, and that is why I am pleased to stand up and support that measure in the bill.

As I have also said, I am pleased to support the balance of the bill, and I am also very pleased with Labor's history of always supporting compulsory superannuation.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in favour of the amendment to the second reading of the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014 that has been moved by the member for Fraser. I agree that the phase-out of the net medical expenses tax offset is a sensible savings measure and it is the right thing to do. It was first proposed by the former Labor government, and we congratulate the coalition for getting on board, finally, with this proposal, recognising that it is a sensible policy and it is the right thing to do.

The NMETO is a poorly targeted measure. Whilst it aims to compensate those with high incomes who can afford to pay up-front their out-of-pocket health expenses, it is a luxury that many households in our community simply cannot take advantage of. Many people with little or no taxable income are unable to benefit from this scheme, and that is why it an unfair measure and it is right that it should be removed, as this legislation proposes. If we are genuine about all Australians having access to universal health care, then it is right that schemes like this, which favour those with the financial capacity to pay for private healthcare expenses now or later, should be abolished.

The former Labor government announced this measure in last year's budget. It was reported by my local paper that this phase-out could result in a saving to the federal budget of close to $1 billion over four years. That is a lot of health dollars that could be better spent. That is the key point of the argument that I wish to make today. The question is: what will the new coalition government do with the savings generated by this measure? The savings generated by this measure, we argue, should be reinvested in providing universal health care to all Australians, ensuring that they get the care that they need, not just the care that they can afford.

In this debate, the Parliamentary Secretary to the Treasurer has said—and for a moment, when reflecting on his comments, I thought perhaps he had joined the Labor Party!—that these changes refocus health expenditure on Australia's universal Medicare arrangements. Those words could have been taken word for word from the Labor Party platform. The parliamentary secretary went further to say that the focus for the Commonwealth should be on getting the primary healthcare response right and continuing to support our current arrangements in health care. If only we could believe the parliamentary secretary. Whilst these comments are something that I agree with, these comments are just words and could not be further from the truth in terms of government action. It is yet another example of how this government is not matching its action with its rhetoric.

The Prime Minister and his government are intent on destroying universal health care, including Medicare. They are working to create a two-tiered system, further disadvantaging those who have smaller household budgets. It is critical for the government to commit to investing in policies that target assistance to medical expenses for those most in need. I am talking about our pensioners, our low-income earners, the people whose budgets are tight. That is where we need to be focusing our attention.

What we are seeing, though, from the government is Australia going backwards. They are proposing policies that will target the most vulnerable, who will be worse off. Policies such as the GP tax that has been proposed will only create poor health outcomes for some of the most disadvantaged families in our communities. Take, for example, some of the households in my electorate of Bendigo. Their budgets are already quite tight. I am concerned about the effects that a GP tax will have on bulk-billing and GP visits in the Bendigo electorate. Under the former coalition government—cast your mind back to when John Howard was the Prime Minister—bulk-billing in the electorate fell as low as 49.9 per cent in 2003. That was a very low rate that we experienced just over 10 years ago. Under the former Labor government, however, they were able to reverse that figure so quickly that it got back up to 74.6 per cent, just before the change of government. So the bulk-billing rates are back up high. This meant that people were getting to the doctor when they needed to.

Despite these rates being high, Bendigo still is ranked 99th of 150 electorates. We are not the best at bulk-billing, but we do have a higher rate than we used to. This is despite the fact that at least 30 per cent of households in the Bendigo electorate are living on less than $600 a week. This is not even minimum wage that 30 per cent of the households in my electorate are surviving on. It means that they do not have the room in the budget for a GP supertax. It means that, rather than paying to go to the doctor, they will forgo going to the doctor.

If the tax was introduced and levied—and just doing a rough calculation on $6 per GP visit taken last year in the electorate of Bendigo—the government would be taking an extra $4.5 million out of the pockets of Bendigo households. This is another example of the government saying that we should be reinvesting and making sure we have a universal healthcare system while at the same time proposing a GP tax, which would see more money taken out of household budgets. The government needs to back off on this tax and back off Bendigo households because their budgets are tight and they cannot afford further out-of-pocket expenses.

This tax would result in fewer people in my electorate attending a GP. It would increase the pressure on hospital emergency and urgency care departments. For those who are not from country electorates, hospitals that are downgraded and do not have emergency departments would have urgency care departments—and there are at least three of these in my electorate—where there are no on-call doctors and patients are triaged by nurses. If people stop going to their doctor because they do not have the means to pay an up-front fee, they will start arriving at these urgency care facilities only to find that there is no GP on call. This will create extra demand and extra pressure on our public healthcare system.

We should be encouraging people to attend their GP to stay healthy and to get involved in preventative health. We heard the parliamentary secretary say in his speech that we want to be a country that focuses on preventative health, but we are not seeing the actions of this government match that talk. We have seen this government talk about disincentives and discouraging people from seeing their doctor and maintaining their health. Here is another example of how the parliamentary secretary's words do not quite match his actions. He said, 'These changes refocus health expenditure on Australia's universal Medicare arrangements,' yet, as I have just highlighted, this is the same government that is talking about imposing a GP tax. You cannot have it both ways: either you support Medicare and universal access or you are going to water it down and start charging people if they require medical care. Primary preventative healthcare measures save money not only for the individual but also for the health system. They mean that we are not dealing with people in crisis, people with acute conditions, in emergency care, or urgency care if they are in the country, because they have not been maintaining their health.

It is about time we heard some more positive policies from the Abbott government on how they are going to put patients, families and carers first. It is no secret—the Australian people and this chamber know—that the true party for universal health care is Labor. We will always stand here and defend the right of every Australian to have access to health care when they need it, not when they can afford it. I also note that the parliamentary secretary in his second reading speech referred to the National Disability Insurance Scheme, a scheme that many on this side of the parliament are quite proud of. In his speech he said:

The National Disability Insurance Scheme … is expected to cover all related expenses previously covered by the net medical expenses tax offset for those eligible for a funded plan from the NDIS.

That is another example of how the government can use tricky language. He said 'is expected'. Does that mean that some medical expenses will not be covered? The parliamentary secretary went on to say:

The government is committed to delivering a sustainable NDIS across Australia to support people with significant and permanent disability.

What does 'sustainable' mean? Does that mean that there will be a limit on what an individual can claim? Does it mean that there will be a limit on who can claim? That is another example of the tricky language by this government, and that was not the first time on the National Disability Insurance Scheme.

Last November the Assistant Minister for Social Services spoke about the need to address expectations. I fundamentally reject the notion that Australians with a disability, those who have fought so long and hard for this scheme, should lower their expectations on the NDIS. This is the most significant policy reform since Medicare. It is about helping those in need now, not when they can afford it. Again this is tricky language by this government, which is focused on making cuts to the NDIS and starting to soften the community for those cuts.

Currently the NDIS trial in Geelong is delivering exactly the kind of care and support we thought it would deliver. It is changing people's lives. Let me give you an example. Kate and her family live in the Barwon Heads NDIS trial site. She spoke recently about the importance of this for her son. Her son William, because of his disability and the way the scheme is rolling out, will receive an additional $15,000 worth of support each year, including extra support on weekends and the equipment he needs so he has the opportunity to meet with his peers and socialise like most 15-year-olds. Kate said:

While this may seem costly to some, it makes a lot more economic sense than if I could no longer work and had to go on social benefits.

Yet, despite this good news, despite having this opportunity and despite the NDIS rolling out in Geelong and Barwon Heads exactly as we saw it would, all we have heard from the Abbott government is talk about how the costs are blowing out and how it has to be 'sustainable'. It is time the government came clean and told Australians, particularly those with a disability, the truth on the NDIS. What is going to be funded? What will not be funded? Who will receive funding? What does it mean by 'sustainable'? In a truly universal system, in a system that ensures that everybody gets the support they need not support they can afford, there would be no such word as 'sustainable'. Under Labor, the NDIS when fully rolled out would have provided support for an extra 100,000 people with a disability in Victoria, including 3,400 in my own electorate. Of those in my electorate, 1,400 would have received extra support who do not currently receive any or adequate support. I ask the government: are these people in my electorate still on your list? Are they on the cost blow-out list? Are they on the list that you are saying is unsustainable?

Whilst we agree that the phase-out of the NMETO is a sensible saving, will the government do the right thing and re-invest the savings generated by this measure into universal health care? They should be invested in Medicare and in the NDIS so that all Australians—regardless of their disability, regardless of their capability—get the care they need when they need it, and not just when they can afford it.

Steven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I thank those members who have contributed to this debate on the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014. Schedule 1 to this bill introduces civil and criminal sanctions for a person who promotes a scheme that has resulted in, or is likely to result in, the illegal early release of superannuation benefits. Illegal early release schemes are generally promoted to people as a means of accessing their superannuation benefits before they are eligible to do so. There are currently no specific penalties for promoters of illegal early release schemes who are not themselves trustees of a regulated superannuation fund, as promoters often enlist other parties to act as the trustee of a superannuation fund used in an illegal early release scheme. The penalties in the existing superannuation law are limited in their ability to discourage such schemes. The amendments made by this schedule give the Commissioner of Taxation the ability to seek penalties for all promoters of illegal early release schemes, regardless of whether or not they are a trustee of a superannuation fund. Introducing these penalties will act as a deterrent to promoters of such schemes and will help to strengthen the integrity of our superannuation system.

Schedule 2 to this bill amends the Superannuation Industry (Supervision) Act 1993 to introduce administrative directions and penalties for contraventions relating to self-managed superannuation funds. These include the power to give rectification directions and education directions and to impose administrative penalties. Administrative directions and penalties for trustees will form part of the range of options available to the commissioner to respond to noncompliance with superannuation laws.

Schedule 3 to this bill will phase out the net medical expenses tax offset. There will be transitional arrangements for those currently claiming the offset. From 1 July 2013 those taxpayers who claimed the offset for the 2012-13 income year will continue to be eligible for the offset for the 2013-14 year if they have eligible out-of-pocket expenses above the relevant thresholds. Similarly, those who claim the offset in 2013-14 will continue to be eligible to claim the offset in 2014-15. The net medical expenses tax offset will also continue to be available for taxpayers for out-of-pocket medical expenses related to disability aids, attendant care or aged-care expenses until 1 July 2019.

Schedule 4 adds three organisations to the list of named deductible gift recipients in division 30 of the Income Tax Assessment Act 1997. Taxpayers can claim an income tax deduction for gifts to organisations that are DGRs; DGR status assists these bodies attract public support. The new DGRs listed are the National Arboretum Canberra Fund, the Bali Peace Park Association Inc. and the Prince’s Charities Australia Ltd. In addition, the name of the Sir William Tyree Foundation of the Australian Industry Group is being changed to the Sir William Tyree Foundation.

The government does not support the amendment moved by the opposition. The amendment moved by the opposition is quite fascinating. It has absolutely no relevance to the bill that is before the House. It is nothing more than a broadscale amendment moved by the opposition to give them something to talk about in this debate, because the debate is otherwise noncontroversial. I was quite astounded to hear some of the contributions that were made, not by members on this side, who I thought were eloquent, but rather by members on the opposite side who, alas, I cannot say were quite so eloquent. In particular, the contribution of the member for Bendigo was quite extraordinary. I know that the member for Bendigo is a relatively new member of this House, but to hear her come up with such choice phrases—I wrote one down—as 'no such word as sustainable' in relation to the NDIS is really extraordinary. Is it beyond the reach of the Labor Party to grasp the concept that when it comes to providing social welfare and entitlements to Australians there need to be boundaries. I can understand why the member for Bendigo was preselected, if she has that sort of approach. Perhaps I should not be shocked, because it would seem in many respects to be entirely consistent with Labor's approach in government.

When Labor was last occupying the Treasury bench it clearly had no concept of the word 'sustainable'. That underscores in many respects why the legacy of the Labor government is $123 billion worth of budget deficits over the forward estimates and a debt trajectory that would have seen us reach $667 billion of peak debt had there not been policy changes, which is the very reason why we were elected at the last election. The Australian people said to the Australian Labor Party that they want sustainability. I think Labor needs to get the message. The Australian people do not want the approach that failed them, the approach that was adopted by the Australian Labor with respect to not just the NDIS but a raft of other policies. Labor's approach said, 'We don't care how much money we have to borrow on behalf of Australian taxpayers. We don't care how much money we borrow and how many generations it will take to pay the debt back. We just want to live in a way where we can issue out the largesse and Australians can live comfortably and not worry about that tricky little thing called sustainability.' Let me make clear to the member for Bendigo: sustainability is a pretty important thing.

When I hear the member for Bendigo waxing lyrical about how it is going to cost the constituents of her electorate $4.5 million on the basis of some speculation in the media and of her back-of-the-envelope calculations, I ask myself: where was all the faux concern when the Labor Party introduced the world's biggest carbon tax?

I guarantee that the cost to constituents in Bendigo is a lot more than $4.5 million. I have no doubt that the world's biggest carbon tax has a magnitude of 10 or even 100 times that when taking into account the human costs—costs to businesses in Bendigo, costs to families in Bendigo, costs to singles in Bendigo and costs to pensioners in Bendigo—because the people who are paying the most, the people who feel the carbon tax the most, are those who are in the lowest income quartile. These people in many respects could be termed as energy poor. They are the ones who are paying obscene prices and obscene proportions of their income to service the carbon tax paid by the electricity producers under Labor's scheme. There were no comments from the member for Bendigo about that—she just turned a blind eye to the fact that the constituents in Bendigo are paying for Labor's carbon tax hand over fist. That is the reason why we, on this side of the House, bristle a little bit when we hear members of the Labor Party waxing lyrical about media speculation when the lived experience for people in the electorate of Bendigo is that they are paying through the nose to service Labor's carbon tax.

If Labor want to move ridiculous amendments, as they have with this bill, then they should realise that the Australian people can see straight through the Labor Party's approach, the politics that they apply and the political games that they play. Based on my lived experience in my electorate and based on the election result, the Australian people are sick of Labor's approach, sick of the kind of games that we saw with this amendment and sick of the kind of contribution that was made by the relatively new member for Bendigo.

The bill is uncontroversial in that it is a savings measure. It incorporates a number of savings measures that the Australian Labor Party put forward and the coalition has built upon, as part of our fiscal repair job—a repair job that is going to take decades; a repair job that is going to see generations of Australians indebted as a consequence of Labor's spending spree over the last six years. The most extraordinary thing with respect to these savings is that Labor continues in the Senate to remain opposed to some of their very own announced savings such as the research and development tax changes, the higher education savings and the savings from changing the childcare rebate—all announced by Labor but now opposed by Labor. It just goes to underscore how bankrupt the opposition has become when it comes to matters of principle. That notwithstanding, I commend the bill to the House as being a step in the right direction to make sure the fiscal repair job continues and I am grateful especially to coalition contributors to this debate.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

The question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.