Luke Howarth (Petrie, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I was saying earlier that this policy is bad for Australians. It's not going to be good for young people, and it does change the goalposts. Now more than ever, in a cost-of-living crisis, it's never been more important to ensure our superannuation schemes remain focused on those they are designed to bring security to. The Albanese Labor government promised two years ago that life would be easier, and they went to an election on a promise of trust around that. This government went to the 2022 election with the claim that they wouldn't touch superannuation. On the night of the election, the Prime Minister said, 'We can protect universal superannuation.' Again, in February 2023, after the election, the Prime Minister promised 'no major changes to superannuation'. These are big changes to superannuation, whichever way you look at it. I'll continue to explain. The problem that I have here is that the Prime Minister did say there would be no changes to superannuation, and it is a matter of trust, because there are a number of election commitments that the Albanese government has broken—things that the Prime Minister said before the election he wouldn't do and then, after the election, has done. The Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 is one such broken promise.

We saw Julia Gillard, when she was Prime Minister, make that broken promise about the carbon tax. I'm sure there have been prime ministers on my own side that have paid the price, because it does come down to trust. If you say something to the Australian people and then you go back on that, clearly, that's a big issue, and people no longer trust you. Your word should be your bond. That's what this current Prime Minister has said a number of times: 'My word is my bond.' But then he's broken promises deliberately. One, of course, is on superannuation—this one right here. Another broken promise, of course, was about electricity pricing, when he said there would be a $275 reduction. We heard today in question time about a small business, a gym, in the member for Lindsay's electorate, where the bill had gone from $12,000 annually to $27,000 annually. That is a broken promise. I know that, in my own electorate of Petrie, people's bills have continually gone up and up. Then, of course, there was a promise about stage 3 tax cuts, and this is highly relevant because it does go to trust. The Prime Minister, as well as other members of the government—senior members on the front bench—said lots of times that stage 3 tax cuts were here to stay and that they were rock solid and guaranteed: 'My word is my bond'. It was not that they would be changed a little bit or changed in some way but that they would be unchanged: 'You can vote for us at the 2022 election—unchanged.' Of course, we know the government has changed that as well. There are three clear examples of broken promises.

Further in relation to this bill, in relation to the changes that the government is making—which they said they wouldn't—let's be clear: it is a doubling of taxation on quite a few Australians' retirement savings. And why? This government obviously dislikes, I would say, anyone who it doesn't think votes its way or who doesn't have super in a super fund that it wants. This will primarily affect people who run self-managed super funds. There's nothing the matter with running a self-managed super fund. A lot of people do it. My wife and I ran one before I came into this place. I certainly don't have this much in super. But the point I would make is that it is a changing of the goalposts. Ultimately small-business people and farmers are the ones who will be affected disproportionately, and I'll go on to explain why.

In Australia, under the Albanese Labor government, with the support of the Greens party in the Senate, with this change people like some public servants who are on defined benefits, judges and perhaps the Prime Minister, who came into this place in 1996 and will receive a parliamentary pension, get different treatment for their superannuation than a farmer or a small-business person, or perhaps a new politician—someone who was elected after 2004. So, when the Prime Minister makes these changes and he listens to the Treasurer and says, 'Look, I think we should break this promise, for this reason,' this change doesn't really impact him, because he gets a parliamentary pension for the rest of his life when he retires. I think that's an important point to make.

Let's be clear about what this means. Labor's divisional 296 tax is an unindexed wealth tax. It's a tax on aspiration, and as many as two million Australian people may face these taxes as they approach retirement. Some of these people have a lot of money in super—millions of dollars in super. Of course, we have another bill before the House in relation to super and what it means, and that's changed over time. I said earlier that when superannuation was brought in it was meant to ensure that people could save for their retirement, and the welfare bill that we see in the budget, which is well over a third of the federal budget now and probably growing each year, would reduce as Australians and particularly younger Australians in their 20s would have enough money in their superannuation that there's no way that if they retired at 67, or even 62 or 71 or whatever age they decided to retire, that they would need to go on an Australian government pension.

These changes will affect young people as well. I think of my own son, who's in the Australian Army. He's 21 years of age, and he's on an average wage. In 40 years time, when he's 61, he will be caught up in this tax—no doubt about it—because what is the threshold that the Albanese Labor government is imposing here, $3 million, going to be worth in 40 years time? We've seen just in the last two years how quickly, with inflation, rents have been impacted. For someone who had $100,000 in the bank at the 2022 election, do you think $100,000 in the bank two years later is still worth $100,000? No. It would probably buy you $87,000 worth of goods at the time, because the cost of everything has gone up. Inflation has gone up. And you're imposing on young people—people in their 20s, teenagers, younger people who are about to vote in the next election—a tax that is not indexed and that will severely impact them.

This is poor policy, and it changes the goalposts. Someone's used the example of these people who have saved for decades in some cases, or maybe even over the last 20 years, or since super came in or when the Howard government ended, in 2007 I think it was—17 years ago. That was a time when you could put a lot more money into super. Those changes have stopped. You know you can put only $27½ thousand into super this financial year to receive a discounted rate of some 15 per cent or whatever it is—not like the old days, right?

The people who do have a lot of money there, because they got it there years ago, will not be around forever. They're all getting older. They're retiring or about to retire. They're going to die off. But this government wants to whack 'em—and for what? A couple of extra billion dollars. Maybe the government, since the election two years ago, shouldn't have put in another $315 billion in spending over the forward estimates. They could have restrained that a bit, especially in this inflationary environment, and they wouldn't have needed to break their promises on this superannuation bill and on the stage 3 tax cuts.

The Prime Minister isn't good with the figures. We know that. We saw that at the last election when he was asked about the unemployment rate and he was asked about interest rates. Recently, on this bill, he said, 'Oh, it'll impact one in 200 people,' yet the finance minister, in the other place, said it will impact one in 10 people. Which one is it? Is it one in 10 or is it one in 200? And if the government can't explain this bill, how can Australians understand it?

We want all Australians to understand what their superannuation is. There are policies that the former government put in place—this government, to their credit, have kept them—like the First Home Super Saver Scheme, that actually puts more money into super. Super funds receive more money from the First Home Super Saver Scheme because it encourages young people—who are perhaps in their first job after finishing university, they might be on 60 grand a year—to salary sacrifice into their super. And rather than paying 30 per cent tax from 1 July, they'll only be hit with 15 per cent tax. They can then pull that back out for their first home. The super funds win because it teaches young Australians about salary sacrifice. The younger people win because it helps them get a deposit for their home a lot quicker. It's good policy, and I congratulate the government on keeping that, even though those opposite voted against it when we brought it in.

As far as the Albanese Labor government is concerned, and according to Treasury's own case studies, this policy will double the taxes on retirement savings on an average earning—we're going down the pathway in this country where it will basically increase taxes from 15 per cent to 30 per cent after they said 'no changes'.

This is a tax on hardworking Australians as well. As I said before, a regime that proposes a different approach for a farmer in the member for Forrest's electorate or a small-business owner in the member for Moreton's electorate than the approach for a public servant, a judge on a defined benefit or a federal politician elected before 2004 is not good policy. We know it will primarily hurt people who want to run self-managed super funds because they would tend to have more in there. It may hurt some people in industry and retail funds as well, but the government shouldn't be trying to target one group of people. If you make a promise, stick to it. You're meant to govern for all Australians. You're crowing about a $9 billion surplus, even though next year it goes to $43 billion in deficit—

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

We don't have any mugs!

Luke Howarth (Petrie, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

but the reality is that this government can't be trusted. The member for Moreton might interject, but the reality is that you went to the last election—

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

We don't have any lying mugs!

Luke Howarth (Petrie, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

saying, 'No changes to stage three tax cuts,' through you, Deputy Chair, 'no changes to superannuation,' and now you're going to stand up and justify why your government has broken three promises that I would rule out.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

You said you'd have a surplus!

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Member for Moreton, the member for Petrie will be heard without interjection.

Luke Howarth (Petrie, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Well done on the COVID pandemic! I know that I've never seen anything like that, through you, Deputy Speaker.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Nine years!

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

The member for Moreton! I will not repeat myself.

Luke Howarth (Petrie, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Thanks, Deputy Speaker. I was just saying that—I won't continue on with that interjection, but the reality is it's a broken promise.

Combined with other changes as well, like the response to the quality of advice review that will impact financial advisers—the government were supposed to run a program there for 12 months. They're only doing it for a few months, which puts more taxes on financial advisers at a time when Australians need financial advice more than ever. I'd call on the minister that I shadow to look at that, to try and fix that up because Australians need financial advice. They need financial advice in their super as well. We don't want a regulatory approach from the Albanese Labor government that favours one form of superannuation over another.

This is a big one: tax on unrealised capital gains. Taxing unrealised capital gains in superannuation means Australian retirees will pay tax on money that they haven't even made yet. They haven't made the money, but the Albanese Labor government wants to tax them on it. This is unheard of; it is unprecedented and it would set a new standard if this bill passes with the Greens support in the Senate. I know we're not voting for it. The coalition is not voting for this bad policy, particularly after the government said they wouldn't touch it and then broke that promise. Representations made by the Treasury that the taxation of unrealised gains is already a feature of the country's tax system are misleading because the only example of this within the Australian taxation system is in the taxation of capital gains where an individual or a company ceases to be an Australian tax resident. Well, that's not the case. This is on Australians living in Forrest, living in Swan, living in Petrie, living around Australia.

As a good analogy I can think of for young people, it would be like the government saying to you: 'Listen, you buy a carton of beer and you spend 200 dollars on cartons of beer every year. The tax on those cartons of beer is about 25 per cent, so you owe us $50.' This is before they even bought or drank the beer. That's what's happening. They're basically saying: 'You're spending 200 bucks on beef for the year? Twenty-five per cent of that is tax. You haven't purchased it yet, but we know you're going to. You haven't drunk it yet, but we know you're going to. We want our $50.'

It would also mean—and many people who are currently homeowners would understand this; we don't trust the government's commitment that they won't tax the family home or even any property. Think of your own property where perhaps you bought a property for $500,000. The reality is that that property today might be worth $1 million. You've had a $500,000 increase in that asset. It would be like the government, before you even sell the house, saying, 'We want tax on 500 grand.' That's what they're doing to super funds. That's what they're doing. Farmers in particular, like in the electorate of the member for Forrest, might have a property of 500 acres, raising sheep, dairy cows or whatever it is. They bought that property years ago. They're providing milk, meat or other food, and on paper they get a valuation from the state government, whether it's Western Australia or another state, saying: 'You bought that property for $1 million. It's now worth $4 million.' The government in this legislation is saying: 'Right. That $4 million is in your super. You haven't sold it yet. It's over $3 million. We want tax on $1 million.' And where are they going to find that money from?

Nola Marino (Forrest, Liberal Party, Shadow Assistant Minister for Education) Share this | Link to this | Hansard source

Year on year.

Luke Howarth (Petrie, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Year on year. This is unheard of. Please understand that. Backbenchers in the Albanese government should be going to the Prime Minister and the Treasurer and saying: 'Maybe we've gone a bit too far on this. Maybe that's not a good idea. Maybe my kids'—the fact is that this does not go up each year. Three million dollars is the cut-off. Most things are indexed with inflation or CPI, but no. To all the backbenchers over there who have kids or grandkids: your kids will be impacted by it too. Maybe your kids will run a business or a farm one day to provide food to Australians. The Albanese Labor government is going to hit these people.

And it's moving the goalposts. When Paul Keating, John Howard, Bob Hawke—all those former prime ministers—said, 'Yep; let's go with super. Put money into super so that you're not a burden on the taxpayer when you retire,' they set the goalposts up. They've kicked the ball. The football's in the air. It's heading for the goals, and the Albanese government is getting those goalposts and shifting them 50 metres to the left or the right. The goal misses, and you pay more. It doesn't matter that you're retired. Your farm has gone up. The property in the middle of Perth that you bought for $1.2 million years ago, because it's in the CBD? That's worth $5 million. 'You owe us tax on two million bucks even though you haven't sold it.' That's the reality, and it's a poor example. The Assistant Minister to the Prime Minister should go back to the Prime Minister and say: 'Every Australian has property. We want all Australians to get into their own home. We want them to run their own businesses. Let's not tax them for it. There is no need to do this.' They’re being tricky with this, saying 'Oh, well this will be legislated on 1 July 2025,' it's after the next election, because the next election is due in 12 months, in May 2025, 'We're not breaking an election promise because this doesn't kick in until two months later.' If you really want to do that, take it to the next election in 12 months and win the next election. I hope you don't, but if you win the next election then you'd have a mandate to legislate this. Right now, you don't. There is no mandate. It is a broken promise, and the people of Australia need to know that. The young people in this country need to know that.

With inflation increasing and wages going up, of course, as well—the government crows about that; well done to them if that's the case—the lack of indexation in these proposed bills will impact many, many more Australians, including our kids and our grandkids, because it does not consider homeownership status, combined balances and the level of wealth outside of super. I'll leave it at that, but, unlike the government, the federal coalition opposition and, if given the opportunity at the next election, a Dutton government—under the leadership of the opposition, we're opposed to this. We are opposed to this. We will take a clear policy to an election, and during our term in government we won't break an election promise on superannuation like the members of the Labor Party are doing right now.

There is no argument about the importance of the stability of our retirement system and the importance that it has in ensuring that future Australian governments don't have increasing levels of welfare. We want every Australian to be able to have the support they need and to be able to fund the decent retirement that they need. The stability of that system is being undermined by the Albanese Labor government, and the trust of governments is undermined when prime ministers and politicians break election promises, and that is what this is about. The Prime Minister said one thing before the election, and he's doing a very different thing now that he's in government. It's not good enough, and I'll leave it at that. We'll be voting against the bill.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the raft of reforms included in the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023 brought by the honourable member for Whitlam. I note the member for Petrie's contribution. I did not hear him commit to rolling back this legislation should they win the next election. He must've forgot to mention that in his 30-minute wandering diatribe, but I'm sure he'll be able to fix it up later.

I congratulate the honourable member for Whitlam for bringing this bill to the chamber. As a brief aside—I'm sure the Prime Minister is not listening—I would just say to the member for Whitlam: How about those Dragons on the weekend? Wasn't that magnificent? They are now equal ninth on the NRL table with five from ten. That's a good pass when it come to the Dragons of late.

Anyway, returning to the legislation, the Albanese government is committed to strengthening and safeguarding Australia's world-class superannuation system. It was Labor who designed and implemented the superannuation system, and through the years Labor has protected and strengthened it to ensure that Australian workers are set up for a dignified and secure retirement. It was the Keating Labor government back in 1992 that made superannuation compulsory. This necessary and responsible measure took the pressure off the pension system, and, thanks to that, Australians have saved a total of $3.3 trillion and counting—an amount that is amazing when you think of the number of people in Australia.

The Superannuation (Objective) Bill 2023 focuses on legislating the objectives of superannuation. It ensures that future policies must be compatible with the objective of safeguarding the retirement futures of all Australians. We knowthat we won't see what happened during COVID, where we saw the coalition urging hardworking Australians to raid their superannuation in order to make ends meet. That's what happened under the Morrison government during the pandemic—$38 billion in private stimulus, effectively. That will cost the people that had to raid their superannuation about $85 billion by the time it comes to their retirement, because they miss out on the magic of compound interest. And what did they use it for? We know from research that it was spent on things like bull bars, trips to Bali, boob jobs, lap bands and back decks. My understanding is that those things will not give you a long-term financial return—not in the way that compound interest does.

We have made sure that superannuation is protected. We've heard from those opposite the idea of people using their superannuation funds to help them buy their first home, and we know the problems that could have for an already overheated property market. Superannuation is not designed to be a second bank account. Its purpose is 'to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way'. That's what superannuation is about. Today the Albanese government seeks to strengthen our superannuation system with targeted and responsible reforms which will make the system fairer and more equitable.

The $3.3 trillion—and counting—invested in superannuation is not evenly shared amongst Australians; of course it's not. Those who are nearing the end of their working lives obviously tend to have much more substantial balances. A significant number of these people have benefited from different contribution caps throughout the years. As it stands now, about 0.5 per cent of the population has a superannuation account of more than $3 million. Now, $3 million is not small change, and that ain't the half of it.

As we saw with the positive changes to the stage 3 tax cuts—with all working Australians benefiting from the cuts, not just the wealthy—the Albanese government is committed to making changes for the better. The change that we are proposing to make to our superannuation system is all about making it sustainable and fairer. This bill introduces a modest change that will affect, as I said, less than 0.5 per cent of all Australians—those lucky, no doubt hardworking, 80,000 people who have a superannuation account with a balance of over $3 million.

This is a responsible change for Australians and for the budget. It's the focus of this government to implement changes to ensure that the generous superannuation tax breaks are better targeted and more sustainable. Currently, earnings from superannuation in the accumulation phase are taxed at a concessional rate of 15 per cent, so obviously there's a tax incentive to save. This will continue for the 99.95 per cent of Australians whose superannuation balances are below $3 million.

From 2025-26 the concessional tax rate applied to earnings on superannuation balances above $3 million will be 30 per cent. For the first $3 million, no problems; for each dollar over $3 million, you'll be taxed at 30c in the dollar. These accounts are beyond what is necessary to fund a comfortable retirement, as judged by the ASFA Retirement Standard.

The small group of people affected by this reform will continue to benefit, as I said, from that generous rate of 15 per cent on earnings for balances below the threshold. The first $2,999,999.99 will still be taxed at 15c in the dollar. Furthermore, there will continue to be no limit on the size of superannuation account balances, beyond the constraints of those annual contribution caps.

This targeted reform is predicted to generate about $2 billion of revenue in its first full year, unless those 80,000 people rearrange their financial affairs. This change will assist in easing the pressure caused by spending on necessary and valued government programs. As one of my constituents said:

At a time when we have huge demands on our country in aged care, health care, the NDIS and security to name a few, it is clear that money could be spent more wisely elsewhere.

Labor governments are dedicated to protecting working Australians, and a key component of that is ensuring that our superannuation system is equitable and sustainable. The bill also proposes a raft of reforms which support better regulatory outcomes. The first of these is additional power for the Commissioner of the Australian Charities and Not-for-profits Commission to make disclosures about new or ongoing investigations, minimising the risk of harm. This reform is the result of consultation with the charity sector to develop appropriate legislative safeguards. Currently the ACNC can be prevented from disclosing an investigation into alleged misconduct by a not-for-profit organisation. Enabling disclosure is an important reform which will build public confidence in the sector and the ACNC's role as an impartial regulator. Australians who donate to charities from their hard-earned wages deserve to trust that there is transparency in the oversight of the sector. The reform will assure both charities and donors—most Australians are very generous when it comes to supporting charities—that issues of public concern are being dealt with, building confidence in the not-for-profit sector, as well as ensuring trust in philanthropy, which is, as I said, core to Australian values.

The bill will ensure further regulatory improvements, with changes to the review cycles implemented by the Financial Regulator Assessment Authority. It will increase the review cycle from two years to five years, supporting more comprehensive reviews of the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority. The increased cycle length will enable regulators to implement recommendations between reviews and more meaningfully assess the implementation of new measures.

The amendments also include a change to improve the ease of access for Australian and professional and wholesale investors to global investment opportunities. Up until now, this has been provided by an instrument of ASIC. The reform means that financial institutions and investors can access financial products and services offered by foreign financial services providers, diversifying financial holdings. It will improve outcomes for millions of Australians through facilitated access for superannuation funds and investment organisations. The reform also streamlines access by foreign companies by recognising the regulation of comparable foreign regulators and exempting certain foreign companies from undergoing aspects of assessments when applying for a standard financial services licence in Australia—that double regulation.

Schedule 9 of this bill also provides safeguards to address the risks posed by new and emerging technologies, by updating the payment system regulatory framework. The Reserve Bank of Australia will be able to regulate all participants and payment systems, including digital wallet providers and buy-now pay-later service providers. It further protects Australians by giving the Treasurer the new designation powers that allow the minister to designate payment services that present risks of national significance and then implement additional regulations.

The extensive measures included in these amendments are important to safeguard our superannuation system. They promote confidence in the not-for-profit sector and improve outcomes for hardworking Australians. I commend the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023 to the House.

Kate Chaney (Curtin, Independent) Share this | Link to this | Hansard source

I understand and support the intention of the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, but there are problems with it that mean I will not be voting for it. I want to outline both why I support its intention and why I can't vote for it in its current form.

Superannuation tax concessions should be fair and reasonable. We need a superannuation framework that allows and incentivises Australians to set themselves up for a dignified retirement and reduced reliance on the age pension. This is not only good for individuals; it's also good for the country. We need tax concessions to encourage contributions to superannuation and to compensate people for locking away their money for a long time. I understand the concern that these concessions are currently being used beyond the purpose of a dignified retirement, as a wealth management tool. When you hear that one person has $544 million in their superannuation account, it's hard to say that that that's what's actually needed for a dignified retirement. I appreciate that, beyond a certain level—and we can debate what that level is—tax concessions on superannuation effectively subsidise wealth accumulation.

There are some things about the structure of this change that I do like. Under the change, the higher tax rate of 30 per cent will be paid only on the proportion of balances that exceed $3 million, so any part of your super balance that's less than $3 million will continue to be taxed at the concessional rate of 15 per cent. The vast majority of people have less then $3 million in their super accounts—even in my relatively wealthy electorate of Curtin, where our average super balance is double the national average. The average super balance is just over $500,000, even in the wealthiest suburb of Cottesloe and Peppermint Grove, and this is a sixth of the $3 million threshold. For balances under $3 million, the effective tax rate paid by retirees is typically closer to seven or eight per cent when you include franking credits and capital gains tax discounts.

It's my view that paying an effective tax rate of seven or eight per cent up to $3 million and a tax rate of 30 per cent for part of your super over $3 million still creates a pretty strong incentive to contribute in the interests of the individual and the country. The proposed change affects only 0.5 per cent of all Australians who have superannuation accounts. I want to be clear that this is a small number of people and they are probably going to be fine, but I have some serious concerns about the structure of the change which makes it impractical and potentially unfair, even if this does affect only a small number of people. As a matter of principle, we need to ensure that changes we make are consistent with commonsense approaches and fairness.

I have four main concerns with the bill, and if these concerns were addressed I would support the bill. They are: taxing unrealised gains; double taxation; not indexing the threshold; and there being no transition period. Taxing unrealised gains will create liquidity issues for taxpayers. It is unreasonable to expect taxpayers to fund a tax liability that relates to the appreciation in value of an asset when they haven't sold the asset and received money with which to pay any tax liability. Even as far back as 1975, the Tax Review Committee, when considering the topic of taxation of capital gains, commented that the impracticality of taxing capital gains as they accrue is universally recognised. The tax can only attempt to deal with realised gains. The taxing of unrealised capital gains leads to unacceptable problems in the periodic valuation of assets and generates severe liquidity difficulties for taxpayers, as well as compliance costs. It would disproportionately impact self-managed super fund holders and those with a large illiquid asset like farmers. Assets fluctuate in value, and an asset that eventually gives rise to no gain may nonetheless have given rise tax liability. The government's proposal would go against these longstanding principles of tax law that only realised capital gains are taxable. It will create an undesirable and inappropriate precedent for future tax proposals. It could also disincentivise investments in long-term assets, instead incentivising a short-term approach to reduced liquidity risk. University of Adelaide analysis showed that 13 per cent of self-managed super fund holders would not have had adequate liquidity to cover this new liability if it had been introduced in 2020.

A more workable alternative to taxing unrealised gains must be found—to defer payment until the asset is sold or to calculate tax based on a self-managed super fund's actual taxable income. I will be supporting amendments to this effect. If this issue is not addressed before the bill passes, it will reflect very poorly on this government's financial nous and willingness to listen to genuine and practical concerns. The intention of the bill can be achieved without taking on this ridiculous impracticality.

My second, and related, concern is that this bill creates a situation where people can be taxed twice. If the paper value of a property increases in one year, under this bill tax is payable on that unrealised gain. If the property is then sold in a future year, capital gains tax will be payable on the actual gain realised, so you pay twice. It seems wrong that this could be the intention of the bill. Even worse, if the paper value of an asset increases and tax is paid on that unrealised gain, and then the value decreases before the asset is sold, it looks like the tax paid on the gain that was never realised cannot be recovered. I've submitted questions to the PBO about this scenario but in this busy budget week haven't yet had this clarified. If this is the effect of the bill, I urge the government to address this unfair situation. Taxing the same gain twice goes against fundamental principles of taxation and would be very disappointing.

The next issue is the lack of indexation of the threshold. Today, $3 million seems like a lot of superannuation, but $3 million in 2064 won't look like it does now. It's been submitted that, for a 30-year-old today, this cap is effectively more like a $1 million cap, in today's dollars, by the time they retire. Indexing these sorts of thresholds allows the intent of a policy to continue into the future, instead of gradually ratcheting down the benefit of superannuation saving over time. Not indexing the $3 million threshold has the potential to embed further intergenerational inequality. Younger people have a hard enough time as it is without being disincentivised to save for their retirement. The same issue arises with indexing almost any threshold, including income tax brackets. Not indexing is a sneaky way of effectively changing the policy year by year. Setting this up properly from the outset would include safeguarding its intention into the future by indexing the threshold.

The last issue relates to transition. I recognise that most people—59,000 of the 80,000 affected nationally—are of retirement age, so they can restructure their financial affairs before the change comes into effect in 2025 if they can find a more tax-effective approach than the new rate of 30 per cent for the proportion of their balance that exceeds $3 million. People have made financial decisions based on the current tax treatment, and they may not have made them had they known that this change was coming. Because superannuation laws lock up people's own money, we need to be extremely cautious about making changes without permitting people to rearrange their affairs accordingly. Any change to superannuation makes the system less predictable and therefore disincentivises people from making voluntary contributions. Allowing a transition period would mean people could change their financial arrangements to prepare for this new set of rules. Everyone should be able to plan their financial affairs in light of the current regulatory environment, rather than being caught out and unable to adjust.

A number of constituents have contacted me with concerns about this change. For example, Michael Travaglione said:

My family and friends are up in arms about the super tax changes—not because it hits super investors (who have saved funds in super for over 50 years) with more tax, but rather because it breaks an existing tax principle in taxing unrealised (or paper) gains (that may NEVER be realized). It will become a fee fest for accountants, lawyers & an army of time wasting valuers/advisers that will further reduce Australian productivity.

I initially told constituents that I would support this change, subject to a number of issues being ironed out as part of the short consultation process. The failure of this government to listen to stakeholders and experts on this issue means we'll end up with an impractical, complicated and unfair version of what could have been a perfectly acceptable policy.

I have no problem with putting a cap on superannuation tax breaks above a certain level, but it has to be practical and fair. I'm disappointed that these issues have not been resolved through the consultation process, so as a result I will be supporting appropriate amendments, and, if they're not accepted, I will not be supporting this bill.

Aaron Violi (Casey, Liberal Party) Share this | Link to this | Hansard source

As a first principle, we should never forget that superannuation is your money. It's not the government's money; it's not the superannuation fund's—it's your money. It's your money to deliver quality of life in your retirement. It's not a piggy bank for the government to tax and spend or to direct into priorities that they determine it should focus on. It is you forgoing your wages today to save for the future, and it is money that is taken from your wage without your choice. We all agree to that social contract; everyone supports that principle. However, what we're doing with superannuation is asking Australians to make decisions today on their retirement plans—to forgo money today—that will impact them in 20 and 30 years time. We need to provide them with certainty when they make that decision, and that certainty is a key part of the superannuation social compact. It's disappointing and unfortunate that the Albanese government has chosen not to provide that certainty for the Australian people.

When this policy was announced last year by the Treasurer and those opposite, there was a moment in question time that really summed up either the lack of understanding or the lack of care of the Prime Minister, the Treasurer and those opposite when it comes to people's superannuation. We on this side asked a question about a young person that would be impacted in 30 years and the percentage of Australians who would be impacted. I remember it clearly: the reaction of those opposite was to laugh at that question—an important question because, if you are 20 years old today, if you are 30 years old today, the decisions we make in this House today will impact you at that time. I appreciate, I understand and I remember well my early 20s, where you're not thinking about your superannuation and you're not thinking about the future. That's our responsibility—to make decisions today on behalf of the Australian people today and into the future. So for this government to laugh at young people's futures in 30 years time reflects poorly on them, and I hope the Prime Minister will take a moment to think about his behaviour because quite often he's happy to laugh at those doing it tough and those that need their superannuation.

Let's be clear. Let's be very clear. This is a broken promise by this Prime Minister, by this Treasurer and by this government. Australians are sick and tired of the Albanese Labor government continuing to tell Australians one thing and then do another. It's just so clear that they have the wrong priorities and a strong track record and consistency—it's just about the only thing they're consistent on—for broken promises. The PM, when he was opposition leader, talked the talk, but it's clear that he cannot deliver in government. He's all talk and no answers.

Mr Albanese, the Prime Minister, was elected on a promise to reduce electricity bills by $275. Instead, electricity prices are soaring. The Prime Minister was elected on a promise to 'make life cheaper and easier'. Instead, grocery prices are increasing, housing costs are rising, and there's no end in sight for Labor's cost-of-living crisis. The Prime Minister was elected on a promise to honour the coalition's stage 3 income tax reforms that fought bracket creep for hardworking Australians. He told the Australian people, 'My word is my bond,' and then he broke his word and he broke his bond with the Australian people. The Prime Minister was elected on a promise to leave superannuation alone, explicitly ruling out changes to superannuation. Instead, now his broken promise on superannuation taxes means that, with soaring cost-of-living pressures, Australians will be worse off today and into the future. At a time when Australians are struggling with high inflation, a GDP per capita recession, a record increase in interest rates and soaring energy prices, the message these super changes send is clear: Labor wants you to pay more.

But it's not just another broken promise; it undermines confidence in our superannuation system. As I said previously, the long-term nature of superannuation savings means that confidence in the entire system is undermined when ad hoc changes are made and promises are broken. Labor's changes to super and their failure to index these changes will punish young Australians, and it's those Australians who will pay the price in their retirement. It's very much the two-card trick. They know that many young Australians, as I said previously, in their early 20s and 30s aren't thinking about their superannuation, so they're happy to play around and not index this knowing that they can get the tax revenue moving forward. But it's the reality that it's the young people of Australia who will be impacted in the future by these changes and the decisions made today.

Analysis from the Treasurer's own Treasury department shows that a 20-year-old today earning an average wage over their lifetime will pay higher taxes under this scheme. Analysis by the tax office and census data reveal that more than two million Australians who are under the age of 25 today will be slugged in their retirement with Labor's latest tax grab. That's assuming that between now and their retirement there are no other tax grabs on superannuation from Labor. Given the Assistant Treasurer has called superannuation a honeypot, I think it's extremely likely that there'll be more changes and tax grabs, that this is just the first step in this broken promise and they'll continue to raid superannuation.

One of the submissions on the draft bill and around the lack of indexation was from Australian Super. They said:

Indexation of the threshold at which the measure applies would lead to greater certainty and promote stability and confidence in the system. This is important, given the long-term horizon of superannuation savings. This is important as members who are complying with the purposes of superannuation have a right to know how the earnings on their superannuation will be treated for tax purposes while it is compulsorily preserved.

…   …   …

Thresholds in the superannuation system that relate to an individual's balance or their contributions are indexed. This includes the transfer balance cap, the concessional contributions cap and the non-concessional contributions cap.

So there is no reason why the government couldn't index this other than that they want to bank some savings, moving forward, to continue their tax-and-spend budgetary agenda.

They're also throwing conventional tax wisdom out the window, because this change will tax unrealised capital gains, meaning that Australian retirees will face tax bills on money that they haven't even earned yet. The government are going to tax you on money you haven't even earned. This is going to hit small-business owners, farming families and self-managed super funds the hardest. It's going to apply particularly to farmers.

In its submission to the Treasury consultation on the exposure draft of the bill, the National Farmers Federation gave examples of how the proposed new tax would affect farmers who have placed family farms into a self-managed super fund and who use lease payments from the next generation as their retirement income. Let's be clear: in my community we have many family farms, many of them where mum and dad are in their 70s, 80s or 90s and are retiring. Their children and grandchildren want to work on the farm, but the money required to buy the land isn't practical for anyone, so they'll put the farm into the superannuation fund to look after mum and dad and rightly pay a commercial lease to fund their retirement.

Kylea Tink (North Sydney, Independent) Share this | Link to this | Hansard source

So sensible.

Aaron Violi (Casey, Liberal Party) Share this | Link to this | Hansard source

It makes a lot of sense. It's so sensible. It allows generational change in farming. But this decision is going to change the rules. It's going to say to a family farm in my community and many other communities across the country: if the land value of your farm is $2.8 million today and next year it goes up to $3.2 million—and that's a paper value, not money in the bank; it's not a realised asset but a paper asset—you're going to have to pay tax on $3.2 million. But guess what, Madam Deputy Speaker? It's worse than that. If there's a drought and the value of land drops, and the value of your farm goes back to $2.8 million or $2.9 million—anything under $3 million—you don't get that money back from the Albanese Labor government. So you've got to sell the asset to pay for this, and if its value goes down you don't get it back. How can any of those opposite think it's fair-minded to do that? Are they so out of touch with the Australian people? Are they so out of touch with how communities like mine, farming communities, operate and small businesses operate? They're going to wave this through because they don't have the ability to analyse for themselves the decisions of the Treasurer and the Prime Minister; they just follow the line.

It's so frustrating, because this is going to have a tangible impact on so many communities who are just doing their best to get by—just so the Prime Minister can bank a fake saving. Let's be honest: it's a fake saving. What's going to happen is most of those people that are using this will just rearrange their tax arrangements to move it to another vehicle. Those that are really using this because they genuinely need to for their superannuation will be punished, and those that are taking advantage of the system—I'm sure some people are—will work out another way around this. But it's okay because the Prime Minister and the Treasurer have banked their fake savings so they can talk about their surplus and pretend they're being responsible economic managers.

But it's the impact on communities that makes me so angry. This government talks about consultation, but it's a sham. Every time, it's a tick-box process. In their submissions to Treasury, several stakeholders criticised the taxation of unrealised gains: the Business Council of Australia, Chartered Accountants Australia and New Zealand, CPA Australia, Deloitte, EY, the Financial Services Council, the SMSF Association and the Tax Institute. Surely those opposite—I know there are economists in the room here—would know that taxing unrealised capital gains isn't practical and isn't worthwhile, but they are going to wave it through because they need their fake savings. Meanwhile, farmers in my community cop it in the neck because of this out-of-touch government.

EY concerns have been summarised:

… the taxation of unrealised gains will result in:

But in many cases these assets are the family farm, where people live. These are people's homes. These are people's small businesses that those opposite are telling them they need to sell, because of a paper gain.

EY also raised:

To be clear: this legislation will force people to sell their assets based on paper profits, and it's a disgrace. We talk about super and we talk about allowing people to retire. Well, this government is cutting the retirement out of farmers and small-business owners in my community. It's making their lives harder. Those opposite—economists—know that it's not practical to tax unrealised capital gains, but they'll wave it through. They'll support their Treasurer and their Prime Minister because they don't want to rock the boat. Let's be really clear about this: the Treasurer is making these changes so he can get some paper savings in the budget and spend it somewhere else. We all know that those paper savings are not going to be delivered, because people change their tax arrangements, but those opposite are prepared to throw Australian farmers and small-business owners under the bus for their own needs. They've got two options: either they're out of touch or they don't care. Both reasons are an absolute disgrace.

(Quorum formed)

Kylea Tink (North Sydney, Independent) Share this | Link to this | Hansard source

While people in my electorate of North Sydney broadly support the intent and principle of the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, they're also very concerned that the legislation is being poorly executed and will create a dangerous precedent within our taxation system. They are also concerned this legislation is really a trojan horse, designed to put an end to self-managed super funds and instead preference the large commercial superannuation—sorry, Deputy Speaker. I call your attention to the state of the House. There is not a quorum in this chamber at the moment.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I'm not too sure if you can call one straight after another or if there needs to be a period of time between the two. If the member would just indulge me, the Clerk's going to get advice on it. Continue with the speech, and I'll interrupt you once the Clerk comes back to me.

Kylea Tink (North Sydney, Independent) Share this | Link to this | Hansard source

They are also concerned this legislation is really a trojan horse, designed to put an end to self-managed super funds and instead preference the large commercial superannuation entities, as those can better be influenced by the government of the day in terms of priority areas for national investment.

At this point, I need to declare a deep personal belief that the money held in superannuation vehicles belongs to the person who has put it there. To me, the superannuation structure introduced in our nation over 30 years ago was established to significantly decrease the number of people who would be reliant on the age pension in later life. To this end, the system introduced then and modified since offers preferential tax treatment of the funds to compensate people for forgoing immediate access to earnings of the present day.

With all of that said, I recognise that this legislation proposes to rein back generous tax breaks for super balances that are beyond what is currently perceived as necessary to fund a comfortable retirement, and generally I'm comfortable with that idea, even if in its execution it's inelegant. However, both I and my community believe the mechanics proposed in this bill are poorly conceived and will result in unintended consequences and that the government's complete refusal to enter into constructive discussions about how this legislation could better work only adds weight to the arguments that this legislation is about much more than large balances.

Currently, investment earnings in superannuation funds are taxed at 15 per cent, and this is clearly well below the top marginal tax rate of 45 per cent on ordinary taxable earnings. As I have already said, however, the concessional treatment was originally designed as a way of encouraging people to save for their retirement. I agree with the government that the treatment was not intended to assist people in accumulating excessive wealth, nor was it designed to enable wealth transfer between generations. In this context, people across my community of North Sydney understand the intent behind this reform and generally support it.

But in attempting to address this issue, which applies to very few Australians across the board at the moment, the government is seeking to introduce legislation which could have far wider implications. It's these implications that my community is concerned about. We must absolutely address fundamental inequity in our society, but it is not reasonable for the actions we seek to take to achieve that outcome to set a precedent that could be used to completely reshape the way in which unrealised gains are currently dealt with in our tax system in Australia. The proposed measures will undoubtedly add further complexity and cost to what is already a complex legislative framework, and it's hard to not see this legislation as a direct assault, specifically on people's rights to self-manage their super funds.

The following issues are of particular concern. Firstly, the $3 million threshold is currently not indexed. Secondly, the calculation of earnings, including unrealised gains, sees people taxed on money they may never actually see. This approach is unprecedented, not only here in Australia but around the world. There are the cashflow and liquidity issues this bill will cause for those with illiquid assets held in super and, finally, the effect on individuals in defined benefit schemes. Dealing with each of these in turn—

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

If I can just interrupt the member: I gave advice earlier that I'd come back to you once I'd got advice from the Clerk. The Clerk has advised that whilst there is a standing procedure for a 15-minute interval to transpire before a second one can be called, because you're looking to call a quorum on yourself, you can do that. But the Clerk advises that your clock and the available time allotted to you will continue to go, so you'll just be cutting into your own time. I hope that gives advice to the member.

The advice was that if you call a quorum the clock will keep on clicking and it'll just be eating into your time.

Kylea Tink (North Sydney, Independent) Share this | Link to this | Hansard source

Thank you. Dealing with each of these in turn, firstly, the lack of indexation on the large balance threshold amount means that over time this measure will impact many more ordinary Australians who have done nothing more than they are required to do under law in terms of meeting their superannuation payments. The government has told us that from the 2025 financial year the concessional tax rate applied to future earnings for balances above $3 million will apply to around 80,000 people. But modelling by the Financial Services Council shows us that if the cap remains unindexed then the true number of people impacted in their lifetime will be closer to half a million, including more than 200,000 Australians under the age of 30.

One of the purposes of indexing the superannuation cap would be to ensure that each generation receives the same benefits and outcomes from the system. The example provided by Financial Services Council is I think particularly powerful. According to them, a 25-year-old IT professional earning $100,000 and with a current superannuation balance of $35,000 should reach the $3 million threshold by the time they retire at 65. They would then fall foul of this new legislation, having done nothing more than what was required of them during their working life. How can this be considered fair? I don't understand why the government has to this point in time rejected the calls of many to introduce indexation on this legislation. And I fear that the omission is deliberate and that the government is indeed seeking to claw back more tax over time while claiming that their initial policy affects just a few. As it stands, the lack of indexation is also incongruent with our current accepted tax principles. Everything else in our super system is indexed: contribution limits, the transfer balance cap, and lump sum benefits. So why would the large superannuation balance threshold not be similarly indexed? When I talk to people in my community about this bill, even those who support it wholeheartedly see the lack of indexation as absurd.

Secondly, the taxation of unrealised capital gains means people will be taxed on money they may never see. This is deeply problematic and a significant and concerning departure from most of the income tax regime, where taxes are assessed only on actual, realised gains. It also violates generally accepted tax principles across most OECD countries, where capital gains tax applies only on realisation. Concerningly, there are no refunds available for tax already paid when earnings turn to the negative. Sure, there would be loss to carry forward against future taxes, but that's of no use for people who take their money out of super to cover the cash shortfall.

I note that while many of the people impacted by the reform proposed in this legislation likely use a self-managed super fund structure, it's not only that cohort that will be affected. In fact, members of APRA regulated funds with large account balances will face potentially more significant consequences due to their lesser control over the timing of realising capital gains.

There are further issues with the calculation basis for earnings on balances in excess of $3 million. They include that, as it currently stands, gains made on assets held for over 12 months are subject to a reduced tax rate compared to assets disposed of within 12 months of application. Meanwhile, investment losses are not refundable and can only be used to offset future gains.

Thirdly, those with defined benefit superannuation funds will also have their annual pension added to the balance of their super, likely pushing them up and over the $3 million threshold. This includes the pensions payable to retired judges, their widows, widowers and spouses. Indeed, retired judges of federal courts have recently said that they're particularly concerned about this outcome as they do not control any capital amount upon which the proposed tax on their pension may be notionally calculated.

Finally, self-managed super fund owners with illiquid assets such as property are likely to face difficulties under this bill, as taxing unrealised gains assumes investors have the necessary cash reserves to cover any tax liability. This is obviously not always the case. This proposed legislation then offers no redress for individuals impacted by genuine liquidity issues, such as an option to pay their liability through a deferred debt account. This will be particularly disruptive to small businesses and farmers, with many of them currently holding their business premises or farm in their super fund.

The additional tax applied to unrealised capital gains within the superannuation fund, as proposed by this legislation, will mean some small business owners and farmers will struggle to pay their annual tax bill on land assets without selling the land itself. Indeed, according to recent research by the University of Adelaide, over 10 per cent of self-managed super fund members affected by this reform would not have had sufficient liquidity in their fund to cover the tax liability if this bill had been introduced on 1 July 2020. The solution is not just as simple as selling these assets. Considerations including transaction costs, market timing and macroeconomic factors make selling illiquid assets far from easy; not to mention the fact that holding them in super in the first place is all about the income they may generate upon retirement. You can't have income from something you no longer own.

Ultimately, this government has displayed little appetite for true community engagement around this legislation, and certainly has not appeared to be interested in considering any of the alternative design models presented. Ultimately, the alternative designs were sensible, appropriate, well-designed and would have significantly improved this legislation. Yet the government has chosen to ignore them and not engage in any meaningful way to come to a more sustainable and reasonable position. This brings me back to my initial concern that, despite all the rhetoric around this reform, this agenda is not just about taxing the rich. It's about trying to shut down the self-managed super fund option.

Ultimately, there are substantial issues in this legislation that should concern far more Australians than those that are just unfortunate enough to be deemed wealthy by this government. The people who will be affected by these issues have done nothing wrong. They haven't engaged in dodgy tax practices or aggressive tax planning. They have, however, made long-term choices between superannuation and other options, based on the reasonable assumption that the restrictions placed on accessing super represent the trade-off for long-term tax concessions. They've complied with the superannuation rules to date and have been told for decades to hold any assets they don't need until retirement in their super. Now these people will be adversely affected.

The people of North Sydney agree the super system should not be used to avoid paying tax. Currently, the system provides concessional tax arrangements for the accumulation of retirement savings, but reforms to make the super system more sustainable and equitable must be sensible and measured. The bill before us is not sensible and it is not measured. I'm left wondering: are we shaping into a conversation around the taxing of unrealised gains in other asset classes including our own homes?

I do not believe I can vote in favour of this legislation as long as it contains this power.

In closing, I'd like to move the amendments as circulated in my name. This reform can and could work, but it will not work in its current form.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Zoe Daniel (Goldstein, Independent) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

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

Recently I spoke in this place about the objectives of superannuation. My belief is that the purpose of superannuation is the provision of an adequate income such that all Australians can be sure of a comfortable standard of living in retirement. In that setting, superannuation can supplement or substitute for the age pension. Preservation, retirement income, equity, sustainability and a dignified retirement should be at the heart of our superannuation policy.

I also recently addressed my concerns that the opposition are waging a war against superannuation by floating a policy to allow Australians early access to superannuation for housing. Flying in the face of good sense and good policy—and the opinion of many respected economists—the conservatives have suggested that allowing Australians to raid their super could improve housing affordability and help first home buyers enter the property market. Under the opposition's proposed scheme to withdraw $50,000 a person, people would need to have superannuation savings of $125,000. That is a sum that the average Australian does not accrue until they're well into their 40s. It begs the question: who is this policy supposed to help?

Many people who are genuinely struggling to buy a home have so little super that allowing them to withdraw it early would make absolutely no difference to them. But, paradoxically, allowing people to withdraw their super for housing would increase the purchasing power of those who have a high income and, often, a relatively high super balance as well. In fact, they're the group who are already most able to buy. Giving them access to faster capital will push up home prices across the board. It'll make it harder for those who are already struggling to get a foothold in the market.

We actually have a useful model for the financial effects of asking young people to raid their super to buy a home and, in effect, sacrifice their future for the present-day aim because help is not otherwise forthcoming from their government. This model is provided by the COVID early release of super scheme, which cost this country more than double the amount forecast by my predecessor as member for Kooyong, Josh Frydenberg. His COVID raid on super has been forecast to cost this country as much as $85 billion by the end of this century. The generation of young people affected by that will face a double whammy—it's a generation with a greater reliance on the age pension, on top of its lower tax revenues from superannuation.

Industry Super Australia has modelled that, for every $1 taken out of super early during COVID, the taxpayer will ultimately pay $2.50 more in age pension costs. That means that all of today's 20-year-olds will pay at least $3,000 more in tax to cover the higher pension bills caused by this scheme. A 30-year-old who withdrew the maximum of $20,000 from their super during the pandemic will be $93,600 worse off at retirement, plus they'll have that extra tax to pay for the age pension.

While the erosion of superannuation balances via an early release scheme is a real and, in my view, damaging policy development for taxpayers in the country, at the other end of the spectrum superannuation has increasingly become a wealth creation opportunity in this country, and today's debate concerns that development. Since the early 1990s, when compulsory superannuation was introduced, there have been increasing concerns over the generosity of the tax concessions that apply to superannuation balances. The current government has determined that those generous concessions should be better targeted and sustainable, and they have attempted to achieve that in the bills under consideration today.

The Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, or the omnibus bill, contains amendments to a variety of acts set out across eight schedules. For the purposes of today's debate, I will focus on schedules 1 and 3. These address the main purpose of the omnibus bill, which is to reduce the tax concessions available to individuals who have a total superannuation balance greater than $3 million.

The Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023 will enact those limits. Specifically, it will impose a tax rate of 30 per cent on superannuation earnings derived from balances of an individual superannuation account that exceeds $3 million in an income year. The Assistant Treasurer and Minister for Financial Services has stated that 99.5 per cent of Australians with a superannuation balance will actually be unaffected by this change. Or, put another way, in the 2025-26 financial year the change should apply to less than 0.5 per cent of all Australians with a superannuation account, which equals about 80,000 people. By the financial year 2027-28, it is expected that the reduction to the tax concession will increase revenue by over $2 billion.

There are two key concerns in relation to these bills; both have been spoken to and will be the subject of amendments introduced in this place by my colleague the member for North Sydney. Briefly, the first concern, which has been raised from a number of quarters, including by many submissions to the Treasury consultation process—including from superannuation funds—was that the $3 million threshold ought to be indexed over time, and I will address that a bit later.

The second concern was that the bill as proposed—and now as introduced—contains a measure that would result in tax being levied and payable on unrealised capital gains. Taxing people on money that they have not yet received is a departure from traditional tax treatment, which in this context presents some significant difficulties. For example, should an investment decline in value after a period of appreciation, it's quite feasible that, over time, any tax paid on the unrealised gains may never actually be offset by a realised investment gain—that is, a person may never actually receive a realised investment gain over the life of their asset, despite having been taxed as if they had. It's been suggested that people will inevitably have to hold cash or highly liquid assets in order to pay that tax on unrealised gains. This would be particularly unfair for farmers and small-business holders who may lack sufficient funds to pay the tax because of the illiquid nature of their assets.

In its submission to the Economics Legislation Committee inquiry, the Financial Advice Association Australia argued that this reform would unfairly target such taxpayers and would discourage investment in illiquid assets. The FAAA submitted that, given the size and nature of illiquid assets such as farms or small businesses, they cannot be easily sold or otherwise liquidated to accommodate a superannuation liability arising under division 296. Further, they suggested that, in the long term, this will force more individuals to divest illiquid assets from their superannuation account and acquire more low-risk liquid assets such as stocks or government bonds.

The 106-page Economics Legislation Committee report into the bills was released last week and has considered these issues in some detail. Many submissions to that committee noted that the bills would help restore the original intent of the superannuation system as a vehicle purely—or, ideally, solely—for retirement savings and that they were therefore a step in the right direction. For those who questioned the fairness of the reforms, it was noted that high-income taxpayers already carry a plurality of the tax burden and support a considerable proportion of government expenditure.

In relation to the indexing of the $3 million threshold, the committee heard that some who were opposed to it, such as ACOSS, believed that the $3 million threshold was too high, given that it captures only a small number of people. In contrast, the Grattan Institute submitted that it did not go far enough and that it not only should not be indexed but should be reduced to $2 million. The Financial Services Council argued that a lack of indexation was 'intergenerationally unfair' and that it failed to provide the superannuation industry and individual account holders with the certainty that they require. The Business Council of Australia similarly objected to the lack of indexation. The inquiry concluded that it was appropriate for the parliament to be responsible for setting the $3 million threshold.

In relation to the taxation of unrealised capital gains, the committee similarly found that, while understanding the views shared by inquiry participants, it believed that, on the balance of evidence, the approach taken in this bill is designed to be applied consistently across all superannuation funds in a sector-neutral way, making it the most appropriate way to reduce compliance burden and costs to funds and their members. The committee found that the provisions of the bills to give taxpayers 84 days to meet their tax liability, as well as the lower than general rate to be applied to unpaid debts, were relevant considerations. Further, while noting that taxation of unrealised capital gains may present difficulties for those with a high proportion of illiquid assets, the committee pointed out that all superannuation trustees have an obligation to keep sufficient liquidity within their account to meet their APRA obligations.

I'm not persuaded that this legislation should provide for indexation of the $3 million threshold in the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the related bill. Not all superannuation thresholds are indexed, and the evidence of Treasury was that it would be unusual for a young person today, on an average salary, to be captured by the tax even in 40 years time. Moreover, were this to materially change in the future, it would of course be open to a future parliament to change that threshold.

However, I am not persuaded that the significant complications that will flow from the imposition of taxation on individuals' unrealised gains are reasonable. The significant and ongoing difficulties in managing cash flows and the financial and other pressures that this change will create, particularly for those with illiquid assets such as farms, seem to me to create unfair pressure on taxpayers.

Ultimately, these bills do take important steps towards making the superannuation system more equitable and more aligned with the object of superannuation—that is, a mechanism for retirement savings and not primarily a wealth creation strategy. The fact is that most of the value of these tax concessions does flow to those who have above median incomes. Unaddressed, they will increase over time. That inequity does warrant urgent government attention. Better targeting of tax concessions, now, is a sensible way forward. It is, however, frustrating that this worthwhile move is conflated with a difficult and messy side issue: the taxing of unrealised gains. I call on the government to review this proposal as a matter of urgency. I commend the bill to the House.

Terry Young (Longman, Liberal National Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023. This bill is a terrible bill. It's a terrible bill for many reasons, but I want to touch on three. First, it's another broken promise. Just add it to the list of other broken promises: electricity bills would be $275 cheaper under Labor, mortgages would be lower under Labor, inflation would be lower under Labor, franking credits would not be touched under Labor, taxes would not go up under Labor, the cost of consultants and contractors would be cut under Labor and there would be no changes to superannuation under Labor. All of this was summarised by the big, overarching call that Australians would be better off under Labor. Instead of being a list of election promises, it is a list of broken promises and the failures of Labor to keep their word. I'm yet to find anyone in the community that I serve, in Longman, that is better off under this Labor government than they were two years ago under the former coalition government.

This bill breaks one of the promises I mentioned previously, as there will now be changes to super. We know that Labor sees super in a different way from the coalition. For Labor, it's all about getting people into industry funds, who then fund the unions, who then, in turn, fund the Labor Party. So it is in their best interests to make it as uncomfortable and costly as possible for those Australians who choose to put their money into a self-managed super fund, rather than an industry fund that funds unions and, ultimately, the Labor Party. Put simply: they see hardworking Australians' superannuation as their personal election campaign fund. In contrast, the coalition recognises that this is the Australian workers' money. It does not belong to any political party or any government of any political persuasion. It is there to help Australians fund their retirement and nothing else. Many of those with self-managed super funds have used these funds to purchase property that they may run their own business out of. Farmers may use these funds to purchase land. Both these cases are examples of people using their own super money to invest in property that frees up capital, which helps them run businesses that inject more into the Australian economy by employing more people, who, in turn, pay taxes and purchase equipment from other businesses that also pay taxes and employ people that pay taxes.

But this legislation threatens this system. By taxing these funds with assets over $3 million on unrealised gains, many of these businesses will be forced to sell these assets to pay the tax bill on money they've never even earned. This means some employees will lose their jobs, and the purchasing of new equipment will slow dramatically to assist in paying this tax bill—not to mention what happens if that business is sold. Say a business was taxed for something being worth $3,200,000 and then sold it for $2½ million. What happens then? There's a $700,000 shortfall which has not been explained, but only Labor could not see this.

When speaking to people who are in this situation, most tell me they are not over the moon to pay extra tax, but they'd live with it if it happened when they actually sold the asset and made the gain. It makes sense, as you'll actually have the money from the sale. Let's put this in perspective for the laypeople out there. Quite simply, if a panel shop or a hairdresser bought a shed or a shop 20 years ago in their self-managed super fund's name for $500,000, and the premises are now valued at $3,200,000, the self-managed super fund would have to pay tax on the paper gain of $2.7 million, even though they have not actually sold the asset and received the money. Hence the reason that, in many cases, they would need to sell this asset, as I just outlined. How would you feel if the government said your annual salary next year will be $80,000 and they need you to pay the tax before you earn it? Of course you'd be angry, and rightly so.

Labor are again using the old Robin Hood MO, of taking from the rich and giving to the poor. It's a great headline but a misleading one that, as usual, leaves out the details and the true consequences of their policy, which is simply a vote grab. The problem is that this possibly affects a low- to middle-income worker even more than the so-called rich. It is these people who will lose their job and then have their home repossessed when they can't pay their mortgage. It will be these people who will be evicted when they can't pay the rent, because they've lost their job so their employer can pay this unfair tax bill. It hurts the very people they're supposed to be helping but are in fact deceiving, which is reprehensible.

It also hurts future generations of workers, many of whom will have more than $3 million in super, as wages and super contributions continue to grow. The second crazy part of this legislation is that it's not indexed. Labor are saying that $3 million in 2064 will have the same value in real terms as $3 million in 2024. Analysts at the ATO and census data tell us that more than two million working Australians under the age of 25 today will be subject to this unfair tax, as in the future they will have over $3 million in super.

Research has revealed that, when it comes to super, Australians trust themselves first, super funds second and government last. We must empower Australians to make decisions about their own financial future first, not governments. We need economic policies that support small-business aspiration and entrepreneurship; that reward work, not more welfare; that contain growth in government spending and government overreach; that deliver an incentive based tax system that returns bracket creep and supports lower, fairer taxes; and that exemplify the coalition's long-held mantra of allowing Australians to keep more of what they earn—which I note has been stolen in the last six months by the Labor party, which, of course, is the highest form of flattery. Australians need a government and policies that support aspiration and back business to create jobs, and this bill and this Labor government do the opposite. I will not be supporting this bill.

Zoe Daniel (Goldstein, Independent) Share this | Link to this | Hansard source

Superannuation is designed to allow workers to save enough through their working lives to enjoy a dignified retirement. It's also designed to ease pressure on budget funding for the age pension. It is not, as I said in my earlier speech on the Superannuation (Objective) Bill, a bandaid that tries to patch up the structural housing policy failure of successive state and federal governments by encouraging people to deplete their retirement savings. That policy was the brainchild of my predecessor in Goldstein. I opposed it before the 2022 election, and I continue to oppose it wholeheartedly now.

ANU researchers found that, because of the authorisation of the early release of super during the COVID-19 pandemic, an Australian who withdrew $10,000, the maximum permitted, may well have lost $120,000 by the time they reach retirement. As a result, more women, because they have smaller super balances than men and a more interrupted career path, will retire with less security, less independence and a less certain future. Whatever else it is, early withdrawal of super is not a housing policy.

Superannuation is also not designed to encourage tax minimisation or outsized wealth creation. I support the principle behind these bills, but there are some details I oppose, and I will support the amendments being proposed by the member for North Sydney to address them. The most recent data from the tax office shows that, in 2020-21, 28 people had superannuation balances of more than $100 million and 107 had balances of more than $50 million. That's not saving for a dignified retirement; it's using the beneficial taxation arrangements for superannuation for wealth creation, or, as the Grattan Institute would put it, a taxpayer-funded inheritance scheme. It's simply not in line with the intentions of the superannuation system.

Grattan estimates that the super tax breaks cost $45 billion a year—two per cent of GDP—and will soon exceed the cost of the age pension. Grattan adds that two-thirds of the value of super tax breaks benefit the top 20 per cent of income earners, who are already saving up for retirement and whose savings choices aren't much affected by tax rates. Much of the boost to super balances from tax breaks is never spent, says Grattan. By 2060, one-third of all withdrawals from super will be via bequests, up from one-fifth today. Some argue that tax breaks on super ease spending on the age pension. Not so, according to Grattan, which says that the cost of super tax breaks far outweighs the age pension savings that they produce, with the bulk of benefits going to higher income earners who would never receive the age pension.

So I do support the principle of increasing to 30 per cent the concessional rate of taxation applied to future earnings of super accounts with balances above $3 million. I note that the existing concessional rate of 15 per cent will remain for balances below the $3 million cap. That is as it should be. A balance of $3 million ought to be sufficient right now to provide for a dignified, self-funded retirement. I've spoken to members of my community about this—Goldstein is arguably one of the communities where some constituents will have very high balances—and those I've discussed this with have said that this change is tolerable. However, there are two major qualifiers. One is the government's refusal to entertain indexing the cap. Not to do so is the superannuation equivalent of bracket creep. As time goes on, inflation is bound to reduce the real value of superannuation balances of $3 million. In turn, that will reduce the quality of life for those retirees who have legitimately planned for a dignified retirement without depending on taxpayer support.

AustralianSuper, the country's largest superannuation fund, argues that indexation of the threshold would lead to greater certainty and promote stability and confidence in the system. Indexation is accepted as principle for several government payments. I've advocated for tax indexation, for example, to depoliticise bracket creep and increase certainty for taxpayers in regard to income tax. For consistency, much as these are very high superannuation balances, the government ought to agree to indexation of this measure. Therefore, I will support the amendment proposed by the member for North Sydney for the cap to be indexed.

There's one other major problem with the legislation that's been raised with me by representatives of holders of self-managed superannuation funds and Goldstein constituents, and that goes to the treatment of unrealised gains. What the government is proposing is out of line with their treatment in other areas of tax policy, where capital gains are normally taxed on realisation, not accrual. The Grattan Institute, which others have outlined, doesn't think the legislation goes far enough and points out that taxing unrealised gains could create tax flow problems for some self-managed super fund members who hold illiquid assets such as property and who will be required to pay tax before realising those gains.

The Australia Institute also notes that problems with accrual taxation include the fact that taxpayers may not have liquid resources to pay the tax. The SMSF Association commissioned research from the International Centre for Financial Services at the University of Adelaide. Their analysis was based on data from more than 700,000 self-managed super fund members from 2020-21 and 2021-22. The research found that the legislation could have a negative impact on up to 50,000 self-managed super fund members, who would suffer a mean additional tax liability of more than $80,000. This is a particular problem for people who are asset rich and cash poor. For instance, farmers who have placed their properties into their superannuation funds under existing law may now lack sufficient funds to pay the tax.

The National Farmers Federation noted in its submission to Treasury on this legislation that, unlike salaried employees, farmers do not make regular superannuation contributions throughout their working lives; instead, their land asset is effectively their superannuation. The NFF estimates that as many as 30 per cent or more of farm businesses may have their land in self-managed super funds, pointing out that, as part of the successions planning process, land assets are commonly transferred into a self-managed super fund. The next generation then takes on the running of the business and makes a lease payment to the retiring farmer. This lease payment becomes their retirement income. The problem, according to the NFF, is that, while the value of agricultural land can fluctuate by as much as 20 to 30 per cent in one year, the lease value does not change at the same rate. In short, in a year where agricultural land values rise significantly so will the tax liability for the people affected, even though their modest income from the lease has not risen to match. That could leave farmers in such a predicament that they have no alternative but to sell the farm.

Some small businesses could well be similarly affected if the premises are owned by a self-managed super fund because the owner acted in line with the existing tax treatment of superannuation accounts. The authors of the Adelaide University study also argue that maintaining existing tax settings for superannuation could yield more tax revenue for the government over the medium to long-term. The authors state that that is because this new tax will still be levied on capital gains but only when the underlying assets are eventually sold. Under normal asset price appreciation over time, the overall tax base will be greater.

I support the second reading amendment proposed by the member for North Sydney on indexation, as well as her amendment on unrealised gains. I'm concerned that the government has not listened to consultation on these matters, appearing to have made rigid decisions about this legislation, even before consulting. So, on balance, while I do support the core principle of the bill, I am sufficiently concerned about these outstanding issues, particularly the precedent set by taxing unrealised gains, that I will not support it.

Helen Haines (Indi, Independent) Share this | Link to this | Hansard source

These bills, the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023, are about making sure our superannuation system fulfils its objective of providing for people in their retirement. To fulfil this objective, I agree, as do many of my constituents, that excessively large superannuation balances should not receive generous tax concessions and that it is not the pure intention of superannuation. I support the objective of this bill. But, as it's currently drafted, it has the potential for some very serious unintended consequences. It must and can be improved, but I must say that, until these improvements occur, I can't support the bill at this time.

These bills seek to achieve their objectives by imposing an additional 15 per cent tax on superannuation earnings where the balance of superannuation exceeds $3 million. It's estimated that only about 80,000 Australians have this amount of money in their superannuation savings—not many by national standards. I support the overall intention of this bill, and it's why I supported the government 's Superannuation (Objective) Bill 2023, which was passed by this place earlier this year. I agree that the aim of our superannuation system should not be for it to be used as a vehicle to avoid tax, sometimes with the intent of building wealth to pass on to the next generation. Superannuation is about safeguarding Australians' retirement. That's what it's about. Unfortunately, past government decisions have not adequately considered the pure purpose of superannuation, leading to some damaging consequences.

One such decision is the former coalition government's early-release-of-super scheme, introduced as an emergency measure at the beginning of the COVID-19 pandemic. This scheme allowed about three million Australians to withdraw $38 billion from their superannuation early, before their retirement. Modelling by the Super Members Council, the representative body for industry super funds, now shows that this scheme has serious long-term consequences for our economy. They've found it will ultimately result in more Australians relying on the age pension and lower tax being received from future superannuation. According to the Super Members Council analysis, a 30-year-old who withdrew money from their super under the scheme will be over $90,000 worse off when they enter retirement. This means more people are likely to rely on the age pension. To cover this shortfall, estimates showed that all of today's 20-year-olds may pay out about $3,000 more in tax. We also know that, under the early-release-of-super scheme, more women than men withdrew their superannuation, and this means that down the track women will be disproportionately impacted compared to men, reinforcing a problematic situation where already women retire with far less superannuation than their male peers. Government policies that treat superannuation as if it's cash on hand fail our future generations, and that's simply not good enough. It's why we as legislators must safeguard superannuation for its specific intention, and that is to safeguard a dignified retirement.

While I support the objective of this bill, I have also listened very carefully to the concerns expressed about the form in which it's currently drafted. That's what an Independent member of parliament needs to do. I take my position as a conscientious legislator very seriously, and I've scrutinised this piece of legislation, as I do every piece of legislation that comes before me, on its individual merits. I've asked myself: what is the problem that this law is aiming to solve? I've looked out for potential unintended consequences and whether these can be mitigated, and I've asked: is this bill good for the nation, is it ethical, and does it demonstrate good governance? Specifically, I ask: what does this mean for the people I represent, the people in Indi? This bill ticks some of these boxes. As I said earlier, I support measures to ensure superannuation is setting up a dignified and sustainable retirement system. This is ethical and it is good for the nation. But I have two major concerns with this bill that suggest that it should be improved to achieve its objective and avoid unintended outcomes that really could be perverse for the very people whose futures we're trying to protect. Until these concerns are addressed, I will not be supporting these bills.

First, many superannuation companies and tax experts are concerned that this $3 million is not indexed. We don't currently index any taxation—that I admit. We don't index income tax brackets. But, as we saw with the debate on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill, the problem of bracket creep, of pushing taxpayers into higher tax brackets where they pay more tax without a material change in their income, is going to be very hard to address without applying indexation. It also creates uncertainty and instability for taxpayers—something that the Tax Institute of Australia is very concerned about. So we must put indexation of taxation on the table for discussion. This is a big, national debate we really need to have. That includes indexing the $3 million cap under this bill.

The second concern that I have is that the bill in its current form is taxing unrealised capital gains. This raises some very genuine and serious concerns, and the member for Goldstein has just outlined many of them. I'm really concerned about the unintended consequences for a very specific group of people I represent. These are people who hold their family farms in self-managed super funds. This includes family farms from my electorate of Indi and, of course, family farms all over the nation. It's very common for farmers to not make regular superannuation contributions. Instead, their land is effectively their superannuation. In order to succession plan, the next generation then takes on the running of the business of the family farm and makes lease payments to the retiring farmer, usually their mother and father, which is effectively their parents' retirement income. These lease payments do not necessarily increase with an increase in property values.

If this tax on superannuation above $3 million goes ahead, these farming families may not receive the lease payments or rental yields to meet the annual tax bill on their land assets without ultimately having to sell the land itself. This, dangerously and seriously, has very negative potential consequences for succession planning of family farms, and this is already a deeply challenging task for rural Australia and a deeply challenging issue right across my electorate.

The two problems I've identified can be addressed, first, by indexing the $3 million threshold and, second, by excluding agricultural land assets from the calculation of total superannuation balance using the Australian Taxation Office's existing definition of 'primary production asset'. These, I believe, are reasonable and simple amendments that would not take away from the important intent of the bill: to make sure our superannuation system fulfils its objective of providing for people in their retirement. I'm disappointed that the government has failed to take on these recommendations, but I'm hopeful that they will in the Senate. These are reasonable amendments that are being put before the House. I think it is the role of parliament, after all, to debate, to improve and to pass good law that benefits all Australians. So until this bill is improved, I won't be supporting it in the House of Representatives, and I encourage my colleagues in the Senate to make the changes necessary so that, ultimately, I can support it.

Sam Birrell (Nicholls, National Party) Share this | Link to this | Hansard source

Like the member for Indi, I represent a farming region. There has been a regrettable attack on agriculture by this government. We've seen it in many ways in the last few weeks, and in the previous few years as well. It's something I'm very concerned about. I don't think people on the opposite side understand agriculture, I don't think they understand how agricultural businesses work, and I don't think they understand the importance of agriculture to Australia's economy, and that is absolutely regrettable. This legislation, the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and a related bill, is an example of that. It's not the only thing, but it's a key reason I've got some serious concerns about this piece of legislation. Labor's superannuation changes are set to disproportionately impact family farms held in self-managed super funds if they exceed new thresholds. Let's face it: this legislation is just a superannuation tax grab that will allow Labor to tax unrealised capital gains on self-managed super fund held farms across regional and rural Australia. The very real danger is that farmers may not have the cash flow to pay the tax on the unrealised capital value in their property that was part of that self-managed super fund. The general concept of taxing an unrealised capital gain is a flawed piece of policy. It's a first in Australian superannuation policy, and it has the potential to create cashflow issues for taxpayers. It is absolutely unreasonable for people to fund a tax liability for an asset that has gone up in value while they have not sold the asset and received the money with which to pay the tax. That just doesn't make any sense, and anyone who's run a business or worked in private enterprise should understand that.

Taxing unrealised capital gains exposes superannuants to market volatility, and they'll be worse off if the value of their investments has significantly declined when it comes time to sell. Taxing unrealised capital gains denies the benefits of compounding, which is critical to good retirement outcomes. Compounding was what superannuation was all about. When what I would regard as a competent Hawke-Keating Labor government—I think that was probably an aberration—first put in superannuation, the compounding effect was the key part of it, and many people have managed to have a dignified retirement, including people in my family, as a result of the changes that were put in, and I congratulate that government for that. But to start trying to raid it the way the current Labor government is—a very different government to the Hawke-Keating government, I might add—is just not on. This tax will reduce investment, because superannuants will direct investments to less volatile financial products.

Now, for those opposite, who, by their constant legislating of policies that are anti-farming and have perverse and detrimental impacts in the regions, let me explain how farming works in many cases. Many families and farm owners, including the wonderful fruitgrowers, vegetable growers, and dairy farmers in the seat of Nicholls, have set up self-managed super funds as their future retirement savings. It's good financial practice. But these people did so unaware that a Labor government was going to get in and come for their assets with more taxes. As many people understand—including the member for Dawson, who has been a farmer, and myself, who has worked in farm management—farming is a risk-reward business. But the reward is not guaranteed. Returns fluctuate. In a bad season the return might be just enough for a cropping farmer to buy seed in order to take the same risk the next season and plant a crop—and bless the people who have the guts to do that in Australia's interest. Often there's no return.

I've had some fruitgrowers in Nicholls, growing clean, healthy Australian fruit, and I've talked about them in the past and about what they do for this country and what they do to make sure that there's a great, healthy Australian product for our children—the risk they take for that. Some of them have been hit by hailstorms two years in a row. That's pretty tough, because you lose a crop. Not only do you lose a crop, but sometimes the hailstorm is so severe that you can get reduced yields in the years succeeding that. The previous coalition government sought to look after those industries through a subsidy on hail netting. It's one of the practical things the coalition government has done, back when we had a government that looked after farmers. The farmers are working through that, but they haven't got the money to do it all, so some of them have lost significant amounts of crop from hailstorms.

Taxing unrealised paper assets in agriculture when the cash flow is seasonally dependent is setting a dangerous precedent. It's bad policy and, like so many policies from the government, it's going to have adverse consequences for regional businesses. And it attacks productive industry. This is what I've been going on about. Since the budget was delivered the other night—and it's got a lot of anti-agriculture stuff; it's also got a bit of anti-mining stuff in it—it really does redirect industry support away from what we've been good at in the past, that is, agriculture, and directs funds towards things that are more ideologically attractive to the current Labor government. It really makes it more difficult for people to do the things that have grown Australia's wealth. And one of the key things that has grown Australia's wealth has been agriculture—so incredibly, effectively done in the seat of Nicholls. You can see probably why they want to do it. In 2027-28, the first full year of receipts collection, the measure is expected to increase receipts by $2.3 billion. An extra 15 per cent tax rate, from 15 per cent to 30 per cent, will be applied on the earnings of super accounts worth more than $3 million.

There has been a lot of feedback from concerned industry and farming groups, but the government has ignored that. A good government listens to stakeholder groups, because a good government understands that MPs and people who work for departments in Canberra don't know everything. It may come as a shock, but they don't know everything. When you get out there and talk to the people who have taken the risk and run the farms, run the mines and work in private industry, you get a really good perspective and you get better policy outcomes—newsflash.

The government has ignored the feedback from concerned industry and farming groups and is pushing the legislation through, despite not being able to identify, with its Treasury modelling, how many primary producers or family business owners would be impacted. The Assistant Treasurer and Minister for Financial Services said, in his second reading speech, that this bill 'ensures that concessions are better targeted at amounts that deliver income for a dignified retirement'. Actually there's no change to the tax rate for amounts that deliver a dignified retirement. All it delivers is higher taxes for those with larger superannuation accounts.

Everyone knows I'm a first-term MP. I've enjoyed watching question time, because there have been a lot of interesting precedents that I've noticed in question time. One of the most interesting question times I've sat through was when the Assistant Treasurer and Minister for Financial Services was asked questions about how this policy would roll out and what would be some of the consequences. What happens if the unrealised capital gains fluctuate either side of $3 million? Does a farmer have to sell part of their land to try and pay the tax bill, even if they've had a bad year? The minister could not answer those questions, and it's the first time ever I've seen the opposition leader get up and offer him another three minutes to have another go. I think that that proves that this legislation was undercooked then, and I've seen nothing, since reading it, that suggests to me that it's not undercooked now.

What will Labor do with the additional $950 million that they collect over the five years from 2022-23? Take your pick of the greatest hits: more destructive policies like the excessively rapid transition to renewable energy, which is damaging landscapes in parts of regional Australia, including my electorate of Nicholls; vehicle emissions targets that'll make it harder for farmers and people for whom electric vehicles aren't appropriate to buy the vehicles that they need; or funding—and this is the worst bit—of destructive water buybacks. I think I've been pretty vocal in this place about water buybacks in the Murray-Darling Basin. I believe there could be some pretty unpleasant stuff once we start trawling through the budget papers, but really, talk about productivity. It is one of the most productive food bowls anywhere in the world, and you want to take away what makes it productive—unbelievable!

Labor's broken promise on super is a tax on the future of young Australians. I've focused a lot on the attack-on-agriculture component of this, but the next generation of Australian workers will be hugely impacted by Labor's extra tax take on superannuation accounts. This is because of the absence of indexing. It will compound the number of young workers captured over time by this tax. These tax hikes, which Labor promised it wouldn't impose, will affect so many people. Okay, in the sort of rich-poor class culture war that we have in this country, where you want to steal from the rich and give to the poor because you want to make a bit of a hero of yourself, $3 million is a lot of money. I don't mind that some people have worked very hard to build up assets to get that $3 million in superannuation. But the point is, because it's not indexed and because CPI is rising faster than it should have—and let's hope inflation gets under control, but with this budget I don't like the chances—it means that so many more people are going to be captured with superannuation balances of $3 million into the future. A young person now who's worked pretty hard—who knows? they might be in their 30s—might have a superannuation balance that's ticking on $600,000 or $700,000. If they keep working hard, as we want them to, if they keep earning more money, as we want them to, and if they keep their aspirations, as we're desperate for them to for this country's future, their superannuation balance is going to tick upwards of $3 million—and that's not going to be a huge amount of money in 20 years—and all of a sudden they'll be hit with a massive tax, because they did what we asked them to do. That's not the way an Australia that encourages aspiration should operate. This will have serious impacts on young Australians in the future and it will have serious impacts in regional Australia.

As usual, there are some consequential changes that are positive. The Commissioner of the Australian Charities and Not-for-profits Commission will be able to make disclosures about new and ongoing investigations where the disclosure would prevent or minimise the risk of significant harm. There's always something good in a bad bill, so people have got something to talk about—that's what I've noticed in my new parliamentary career. But it doesn't matter how many pretty ribbons you use to tie this up. This package has at its core a broken promise, because they said they weren't going to touch super, and a new and unfair tax. It's an attack on agriculture and an attack on the aspirations of young Australians, and I won't be supporting this bill.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak, yet again, on another promise this Albanese Labor government has broken. This time it relates to superannuation. This is the money that Australians are forced to set aside for their retirement. Well, Labor have now decided that they want to get their hands on this money.

With this legislation, the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023, the Albanese government seeks to reduce the tax concessions on total superannuation balances that exceed $3 million. This package of legislation has three major flaws that must be discussed. The first flaw is the fact that these bills, as I've mentioned, represent another broken promise from those opposite. Those opposite went to the election in 2022 promising zero changes to Australia's superannuation framework, yet with this legislation they are proposing to double the superannuation taxes on one in 10 Australians by the time those people retire.

Those opposite will pretend that this policy change will impact only the very wealthy—who, ironically, they now plan to help with energy price relief; maybe they do like the wealthy after all—but that couldn't be further from the truth. These tax hikes will affect people across so many professions—and these are people who are just starting out in their professional career—including tradies; police; nurses; accountants; FIFO workers, many of whom live in the Pilbara region in my electorate; and farmers. Maybe that's not today. It's maybe not today that they will have $3 million in their superannuation fund, but there is a possibility they will do, without a doubt.

From a government that campaigned at the last election on a platform of trust and transparency, this package stinks of gross hypocrisy. But no-one around Australia should be surprised, as this is just the latest in a long line of broken promises. As we know, the mob opposite have got form. On over a hundred occasions prior to the last election, the Labor Party promised to follow through on the already legislated stage 3 tax cuts, yet according to recent reporting the Treasurer asked his department for advice on changes to the stage 3 tax cuts as early as June 2022, one month after the May 2022 election. So it appears those opposite were preparing to break this promise to the Australian electorate just one month after they'd made it.

This Labor government wants taxpayers across the country to believe that the revised tax cuts are monumental and will make a real difference in helping to change and manage the cost-of-living crisis that those opposite are responsible for. Well, it's a nice story but it's a real shame for those opposite that the facts always get in the way of their rose coloured narrative. In reality, an earner on an annual wage of around $85,000 will receive just $15.46 more a week under the reforms. It might make a difference for some, but I don't think that it will make a huge difference to a lot of people. The OECD also recently released their Taxing wages 2024 report and, sadly, Australia's personal income tax burden grew faster than in any other advanced economy last year. How embarrassing is that? Funnily enough, Labor members failed to mention that to their constituents when highlighting their tax policy.

Of course, the central message that Labor used at the last election was that life would be cheaper under them—that life would be better under a Labor led government. I'll admit that some of those on Labor's frontbench are pretty good spinners—they may be better than, or maybe not worse than, Shane Warne—but even they couldn't possibly say that Australians are better off than before they came to office. You would have to ask the average Australian on the street, 'Are you better off since May 2022?' Those opposite can't hide from the fact that everything has gone up under them: housing, rent, electricity, gas, insurance, petrol—you name it, and it's a fair bet that it costs more under those opposite. Of course, mortgage stress is causing massive pain for so many Australian families, including in my electorate of Durack. Despite promising cheaper mortgages, the typical mortgage for Australians is now more than $35,000 worse off. Getting homegrown inflation down and providing the conditions to enable the Reserve Bank to reduce interest rates should be the highest priority for this government. However, sadly, it looks like last night's budget won't deliver any lasting relief for mortgage holders.

Steven Hamilton, an economist writing in the Australian Financial Review, described last night's as the most irresponsible budget in recent memory. He went on to say that during an inflation crisis, with the Reserve Bank on the precipice of a further rate increase, it was 'downright reckless'. Last night, the Treasurer announced $315 billion in new spending. That's $30,000 in extra spending for every Australian household. Not only will this be reckless spending which will keep homegrown inflation higher for longer but their spending addiction is the reason that Labor need to introduce legislation like this, which increases superannuation taxes.

Here's another quote that no one will soon forget: 'My word is my bond.' Remember that? I'm sure everyone in this place and around Australia remembers that gem from the Prime Minister. Those opposite must absolutely cringe when they hear that. It pains me to say that the Prime Minister's word and bond are, sadly, about as reliable as my dear Freemantle Football Club! You really want to trust them; you wake up in the morning and you think, 'Today is going to be a good day,' but, unfortunately, they just keep failing to deliver on their promises.

The second major flaw with this superannuation legislation is the disastrous impact it will have on younger Australians. The Albanese government has failed to index this superannuation penalty. According to analysis conducted by the Treasurer's very own department, a 20-year-old today who earns an average income will pay higher taxes under this scheme. Up to two million Australians could be captured by this by the time they retire. Why has Labor decided to harm so many younger Australians with this legislation? These are people who are just starting out on their careers today. To cut a long story short, Labor believe that they can take the youth vote for granted. That's why they can raise their taxes and not address the issues that matter to them the most. You could go out and ask any random group of young Australians what their priorities are and I think we all know we can guarantee that housing is right up there. And yet entering the market has never been harder, and those opposite have absolutely no credible plan to help our young people achieve the Australian dream of home ownership. I say that they have stolen that dream—those opposite have stolen the dream of home ownership.

Last night's budget confirmed Labor are planning a migrant intake of 1.67 million people over the next five years. Young people are already struggling to find affordable housing, with rental vacancy rates across the country reaching record lows under this government. Labor's grand plan, however, is to continue their failed policy of immigration fast outpacing new builds. It's clear Labor is committed to a big Australia policy, no matter the consequences.

Once we are back in government after the next election, we will return migration to sustainable levels and provide support for first home buyers to enter the market and finally achieve the Australian dream. One of the ways we are going to do that is through allowing access to superannuation. Our super home buyer scheme will allow first home buyers to invest up to 40 per cent of their superannuation, up to a maximum of $50,000, to help with the purchase of their first home, and there stands a huge contrast between the approach of the coalition and those opposite. The coalition is open to allowing young people to access their superannuation to give them the best form of security for their retirement—that being, owning their own home.

Meanwhile, the Labor Party is steadfastly opposed to this proposal but is instead fine with increasing taxes on those superannuation savings. The Labor Party should not count on the youth vote at the next election if they continue to fail to deliver on their main priorities.

The final aspect of this legislation which deserves condemnation is the fact that unrealised capital gains are captured. What this means in practical terms is that many retirees and superannuants will face tax bills on money they haven't even earned yet. The concept is truly bizarre. This is, of course, going to disproportionately hurt Australians with self-managed superannuation funds. The Australian this week posed an interesting scenario that will be of particular interest to farmers within my electorate of Durack. Imagine a farmer whose super fund owns the farm. There are many thousands of families set up in such a way. He has a couple of good years, so he pays the unrealised gains. Then a five-year drought hits—not such a weird and wacky idea; it's possible in our country—and his enterprise is essentially worthless. Do you think Labor will support returning the unrealised gains to him, return them back to the farmer who is battling to feed his animals? Of course not.

The National Farmers' Federation have raised their concerns, expressing:

These reforms could be like a sledgehammer to succession planning for family farms.

The nature of farming means the businesses are structured differently, so rather than making regular superannuation contributions, many farmers hold their homes and businesses in Self-Managed Superannuation Funds (SMSFs).

In many cases, older farmers will hold their farm in an SMSF and lease it to their children, providing both retirement income for them while giving the next generation an opportunity to start farming.

It's clear, between this targeting of self-managed super funds and the refusal to allow young people to use their super to purchase their first home, Labor is simply trying to bolster the industry super funds, the same funds that donate millions to unions across the country and ultimately to the Labor party. How are these donations supporting people in their retirement?

To conclude, I will not be supporting these bills—how could you possibly? They do nothing to combat the cost of living, which is what the government should be focused on, and will disproportionately impact younger Australians—as if they are not doing it tough enough. They represent a terrible betrayal of trust and only serve to fuel Labor's unhealthy spending addiction. Things never change. Remember, when Labor run out of money they come after yours.

Jenny Ware (Hughes, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023. At the outset, I will be opposing these bills. The Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 has the stated intention to reduce the tax concessions on total superannuation balances which exceed $3 million. In effect, this means that instead of paying 15 per cent, which is the existing rate on balances over $3 million, the tax rate will be doubled. There are three main reasons why I say that this bill should be opposed. Firstly, it represents a broken election promise—yet another broken election promise. Secondly, the $3 million threshold figure is not indexed. Thirdly, and lastly, it also taxes unrealised capital gains.

I turn, first of all, to the issue that this is a broken promise from the Albanese Labor government. Australians save hard for their retirement. We did not hear a single word during the election campaign of 2022 that said that any changes were going to be brought to superannuation. As a matter of fact, the now Prime Minister and other ministers said that there would be no changes to superannuation. Superannuation is a long-term investment. Hardworking Australians go and receive financial advice. They go and see their accountants when they make decisions about their superannuation. They are entitled to do that based on promises made by an opposition going into an election campaign that there will be no changes to that superannuation regime.

If we turn and look at the principles of superannuation, superannuation is Australians' money. It's not the government's money; it's our money. It's the money of Australians who have worked hard, saved and put aside some money. Some of it is compulsory, but there are also many Australians who have taken advice for years and have been aspirational. They have been told: 'Put aside some money now, and then you won't be on the age pension. You won't be a burden to the taxpayer when you get old, and it will also provide you with choice in the sort of retirement that you have.' When we have a government that comes in and suddenly starts taxing and changing the way that superannuation will be treated, this is a broken promise and a broken contract with the Australian people.

On our side, we want to encourage people to put money into superannuation. We want to see Australians with more choice about how they can use their retirement savings. The tax hikes that are proposed in this bill will affect people in almost every single profession. They'll affect tradies. They'll affect our police officers, our nurses, accountants and public servants. These tax changes will hurt all hardworking Australians. Superannuation policy must reward work, particularly as we live in a country that has compulsory employer contributions. It must assist Australians to have choices in their post-work retirement life. Therefore, Australian governments should be extremely cautious about raising tax on Australian super and particularly introducing changes to superannuation that have come as a big surprise after the election of 2022. I say that these taxes, overall, will undermine the very principles of superannuation.

One of the most contentious aspects of this bill is the lack of indexation. Almost unanimously, all submissions to Treasury, when this bill was placed in consultation, came back from stakeholders saying that the failure to index the $3 million is a major issue. It hasn't been indexed to take account of inflation, to say, 'Well, $3 million today is going to be very different to $3 million in 10 or 20 years when we've had successive years of inflation.' At this rate, the average 20-year-old today, who is earning an average wage, will pay this tax. If this tax is supposed to be directed towards higher income earners and people who have a much greater superannuation balance than the average Australian, why then is this government looking at slugging the average 20-year-old? It's simply unfair, and the indexation should be introduced.

The other major reason that I will not be supporting this bill is that this represents a taxation of unrealised capital gains. This violates the principles of the Australian taxation system. Capital gains are always taxed on realised profits, not on accrual. This is particularly unfair to taxpayers who, under existing laws, have placed large illiquid assets, such as farms or business premises, into their superannuation fund and may now lack the sufficient funds to pay this tax. This was an issue that was particularly raised by the National Farmers Federation. They used the example that farmers are not on a wage, not on a set salary, so sometimes they will move a farm or a premises into their superannuation fund, and this will now be part of new, much higher tax regime. But the farmer may not have the funds available to pay that tax. So what will happen there? This is a completely unfair attack on farmers.

Similarly, there are many small businesses that may move some business premises into their superannuation fund for exactly the same reason. Many businesspeople, small-business people in particular, do not earn a static wage, a static salary, and so they will look at other ways that they can save for their future, doing it by existing laws and under current advice from financial advisers and accountants. So, again, there will be many businesspeople impacted by this tax who had no idea about this tax going into the election in 2022.

I mentioned the National Farmers Federation, and other stakeholders consulted on and responded to the draft bill. The comments of Mr Tony Negline from Chartered Accountants Australia & New Zealand were particularly relevant. He said:

These changes will unfairly impact on people who are in or approaching retirement who followed the rules, and are also a tax trap for young players.

That's not me saying it; that's the head of Chartered Accountants Australia & New Zealand. Then Mr Peter Burgess from the SMSF Association said:

Taxing unrealised capital gains is a tax on market movements and changes in asset values, not income—an alarming precedent as it represents a fundamental change in how tax policy is implemented in Australia.

I'll conclude by saying that there are three major problems with this bill. It's poorly thought out and poorly constructed, it represents yet another broken election promise and it's a fiscal attack on farmers and small businesses. Its failure to introduce indexation means that many Australian workers will be caught up paying this tax, having already made long-term financial decisions. Lastly, taxing unrealised capital gains simply flies in the face of Australian taxation principles. It will particularly impact farmers and our small-business people. For all of these reasons, I'll be opposing this bill.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

As you well know, Mr Deputy Speaker, I always enjoy rising in this place to speak about matters of superannuation. But I look at this bill and I rise to speak with a sense of trepidation. If we go through this bill there are a number of schedules, and some of those are quite innocuous, shall we say. But, as is the want of those opposite, as always, it is never the headline you look at with this government; it is always the detail, because, as the old saying goes, the devil is always in the detail. Tonight I want to focus on the first three schedules of the bill. As I said, the other schedules make some sensible changes, but the first three schedules of this bill are extraordinarily problematic.

The reason they are extraordinarily problematic starts with the fact that, first and foremost, this government, in the lead-up to the last election, promised the Australian people they wouldn't make any changes to superannuation. This bill, as a consequence, with changes that are proposed—and it's good to see the shadow minister here in the chamber—is diametrically opposed to that. This actually makes a fundamental change to our superannuation system, and in making a fundamental change to our superannuation system it directly undermines the strength and benefit of it.

My concern with this bill has been further illuminated by a comment that I will attribute to the assistant minister at the table about superannuation being a honeypot. This is not a honeypot. Superannuation is not a honeypot for the government; it is people's hard-earned savings. It is not a honeypot for industry super funds to support the Labor Party or undertake a variety of other activities that this government are pushing to now undermine the veracity and strength of the ASX through other bills that are before this place and other matters. Industry super is becoming like a leviathan with tentacles everywhere, being aided and abetted by this government to extend those tentacles through our economy to have complete and utter financial control.

As we look at this bill, this is a clear indication that the government and those that back the government—that is, the industry super funds—have a pathological dislike for self-managed superannuation, because it is possibly self-managed superannuation funds and their trustees that are going to face the biggest consequences of the impact of this bill. At the very time when we are wanting people to be financially self-sufficient in retirement in order to minimise the cost on government—and our intergenerational reports have shown over a number of years the growing cost of age pensions with an ageing population—what is the greatest avenue for people to accumulate wealth in order to do that? It is superannuation.

Yet we see here in this bill a direct attack on those people who have put in the time, effort, forethought and planning to accumulate assets in super to ensure that they are going to minimise—or completely eliminate, in this case—the need to draw an age pension. People with $3 million in super are not a burden on the taxpayer in retirement. They are not drawing the age pension. That's exactly what we want our system to be, and that is the incentive for superannuation—that you put your money in there during your working life and you pay a concessional tax rate because you will not have that money until your preservation age, such that at retirement you can access those funds and draw a pension or draw a lump sum, if you need to buy a new car or whatever the case may be. But the trade-off is that, in these cases, the people that this bill affects also are not a burden on the Australian taxpayer. So, not only have you done the right thing during your working life, in working hard and building wealth and building assets, and paying taxes along the way, but you have done the right thing by saving for your retirement such that you are not a burden on the Australian taxpayer. Is that not the system we want? Yet here we have a government that is trying to undermine that. They're trying to undermine it by introducing a punitive tax on people with superannuation balances above $3 million. In particular, the most egregious part of this bill is the component that taxes unrealised capital gains.

Many in this place would know that, prior to being here, I had a life in financial planning. I used to talk to my clients, along with their accountants, and there was many a client who had a small to medium business and was maybe looking to purchase a property to run their business from or was looking to upgrade the property they were running their business from. In conjunction with their accountants, many of those people finished up with self-managed super funds that held the building assets that their business would operate out of. That was in the late 1990s and in the 2000s. I would suggest that, with the effluxion of time and the success of many of those businesses, those people would have well more than $3 million in their superannuation funds. But, as I said earlier, they've done the right thing by the Australian people. They've run successful businesses. They've employed people. They've paid taxes. They've also done the right thing by building an asset portfolio that will sustain them in retirement. Yet now they're in the situation where they have an illiquid asset in that fund. As the member for Hughes rightly pointed out earlier, this could apply equally to farmers and a whole range of people who have illiquid assets in their superannuation funds and who have a good year.

Now, if they have a substantial number of illiquid assets in the fund, which is not against the law, it's their responsibility as a trustee to ensure that they generate the best returns possible for the members. They might have to sell that illiquid asset to fund a tax bill if they've had a good year and that asset has gone up substantially in value. There is no other place in our tax system where we tax unrealised capital gains. If they buy shares in a listed property trust, which would have the same profile of investments maybe, or a listed property trust that has investments in a range of commercial properties in one of our local industrial estates, do they have to pay tax at the end of the financial year on their unrealised capital gains?

Russell Broadbent (Monash, Independent) Share this | Link to this | Hansard source

No!

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

No, they don't. They don't, as the member for Monash has quite rightly points out. So why are we in a situation here where we are debating a bill that is going to disproportionately impact superannuation funds that have balances of over $3 million with a tax regime that applies nowhere else in our economy?

It is an egregious impost on Australians who have done the right thing by our country over many, many years. They have secured their future and also have continued to provide for and support our Australian economy, since many of these assets in the super funds, particularly the unlisted assets, are wealth producing. If it's a farm, it is producing food, cattle or other produce for the health, wellbeing and prosperity of this country. Why are we then imposing an additional tax that could mean, possibly, that people will have to sell part or all of that asset to pay the tax bill if they have a really good year? It is the same for our small to medium businesses in the industrial estates that are spread across all of our electorates right across the breadth of this nation. What are we doing to those businesses? If they have a good year or, as we have seen over the last few years, the yields and values of those assets increase significantly, what does that mean now? Do they have to sell the business premises that they operate out of? Where do they go, and what do they do then if the new owner doesn't want them to be in that shed? These are businesses that employ Australian people. They pay payroll tax, superannuation and a whole range of things. They contribute to our society and generate wealth, and we are creating an unnecessary burden on them because their owners have spent the last 10, 15, 20 or 30 years doing the right thing by our country and accumulating assets to provide for themselves and their families in retirement so that they don't have to be a burden on the Australian taxpayer. It is a complete and utter disgrace.

This bill should be opposed by every single person in this place because it is a travesty that we are seeing the government singling out a group of people who've done the right thing by our country and, as a consequence, are being penalised. These people have done and are doing the very thing that we, as successive governments of all political persuasions, have encouraged and supported them to do. And for what benefit? For the Treasurer to be able to stand up last night and manufacture a budget surplus off the back of work that previous governments have done. What is the value and purpose of the budget surplus they produced last night when they are stitching up Australian people who have worked hard their whole lives and imposing a punitive tax regime on them because they have had the temerity to be successful?

As I said earlier, there will be a disproportionate effect from this. I can go out and invest in a listed property trust or any other listed asset that has illiquid assets in it, and the managers of that fund don't have this burden. That is a complete and utter disgrace, and the government should hang its head in shame. I am proud that as a coalition we are opposing this bill.

Russell Broadbent (Monash, Independent) Share this | Link to this | Hansard source

The first thing I want the Australian people to know is this: we have the actual minister responsible for this bill at the table, we have one Labor member and perhaps another one coming in that is on duty—maybe swapping over—but there's not one member here from the ruling party of Australia prepared to defend this legislation in the House tonight. That's why you're getting a running commentary from coalition members in the opposition.

There were three things that happened before the election campaign. Firstly, the then Albanese opposition said: 'You have nothing to fear from electing a Labor government to this country's leadership, because we are not going to change the stage 3 tax situation at all. We're not going to change the tax.' Secondly, they said: 'We won't touch your superannuation. We won't go near your superannuation.' Thirdly, they said, 'In regard to COVID, we will have a royal commission into our COVID response.' What happened when the Prime Minister became Prime Minister? He failed on all three. There is no royal commission; he changed the superannuation arrangements, which he said he wouldn't change; and he changed the tax arrangements. I'm not here to argue with the Deputy Treasurer about whether this is fair, right or wrong. I'm only saying that they broke the trust of the Australian people, which they asked for before the election campaign. People voted for the Labor Party in good faith, in the full belief that there wouldn't be a change to superannuation. You may say, 'But this is only a change for wealthy people.' No, this is a change for people that have worked hard. I'll come in a minute to farmers and how this affects them.

The important thing is this: when politicians present themselves to the Australian people and say, 'Here is our plan; if you elect us, this is what we will do,' we, the Australian people, expect they will do what they said they would do, not change the basic fundamental arguments that they raised within the election campaign. I'm not saying they're broken promises; they're broken trust agreements with the Australian people. Trust in politicians, in this nation and around the world, is at an all-time low. Go and talk to people in the street about what they think about politicians.

I've been in and out of this place since 1990. I've faced 13 election campaigns. Sadly, four of them were unsuccessful. But I'm here, and I have a memory of Labor governments that took away from single mums their parental payment to care for their children. They cut the maximum age for it from 12 years of age to seven years of age. Then the Albanese government comes in, raises it from seven to 12 and says: 'Pat us on the back. Look what we've done for single mothers.' I was here when you took it away. I raised, time after time, that it's right that, when a child turns 12 and can get themselves off to school, mum can get out, get a job and get on with life, but, when children are seven years old, I think mums are very protective of them, especially single mums, and they have to make special arrangements if they're working.

I said I'd talk about farmers, and I don't want to run out of time. Every time you're in the chair, Deputy Speaker Vasta, I tend to run out of time on very important issues, and I don't intend to do that tonight. From a farming perspective—and I'm from a farming electorate—many farmers use their self-managed super funds to secure and protect their assets, or whatever it is in their business, and pass them on to future generations. These are assets that have been built up over many years of hard work. Often these farmers have started out as share farmers on dairy farms. They've finally paid for their herd, and, after that, they started looking for an opportunity to put a deposit on a dairy farm. It's very difficult. It's very hard work, seven days a week, non-stop, with the whole family involved. I pay tribute to every farmer tonight, but, more importantly, I pay tribute to dairy farmers.

If you drive up my driveway, Deputy Speaker—and I hope you do one day—and you just get near the house, you will notice two milk cans. Those milk cans aren't there because they're pretty; they're rusted, old and rotted in the bottom. But, every time I drive up my driveway, I remember that I come from a dairying community and our businesses, which were the original grocery store and then the drapery store, were born out of the money made on dairy farms. In those days, you could have a 40-acre dairy farm and buy a Holden every two years, and hopefully you shopped at Broadbent's. Having said that, I am reminded that, every time I drive up my driveway, my wife says, 'Get rid of the milk cans.' I can't get rid of the milk cans, because they're part of who I am. I come from a dairy community.

Yes, those assets have been built up over many years. I commend the member for Nicholls, who spoke today on this bill, for his words of support for farmers in his electorate. I would have to echo the same sentiment so that we don't take for granted the sacrifice and risk that farmers and their families take to feed the nation. As the member for Forde said, they put food on the table. Milk doesn't come out of cartons and bottles; it comes out of cows. It comes out of sweat and hard work. Beef comes from grass-fed cattle, if you can afford grass-fed beef anymore. The cost of living is really putting some pressure on that. We haven't quite got to the stage of having a $100 leg of lamb, but, by gee, we're not far away. I remember the statement from the member for New England.

This bill, like other policy themes under the Labor government, discourages farmers from doing their honourable work on our behalf. Worse, it disproportionately poses a serious threat to the next generation of farmers, which I'm sure the member for Forrest will bring up too. There's now enough of the next generation of farmers who don't want to continue on the farm because they know what their mums and dads have been through to get them to that point. They have always helped out on the farms, as all kids on farms do. They're helpers on the farm. It's been a family commitment. But, because they have seen how hard it is to make money on a farm today, they want to be doctors and lawyers and all those sorts of things, as the song goes. They don't necessarily want to be farmers. So you haven't got the family coming through saying, 'I want to be a farmer.' Under this proposal, if you make it even harder for farmers and the next generation, they're going to walk away.

The next generation of farmers that do want to farm already feel abandoned by the government through policies such as committing to closing the live sheep export businesses. It sends a message: 'It's live sheep now. It's live cattle next. We're coming after you, and we're coming after farmers with all sorts of environmental restrictions that the previous generations never had to deal with.' The biosecurity levy is another one where the government is passing the buck on to farmers. Biosecurity is a responsibility for all of us, not just for farmers—every one of us. I've been through a stage where we had disease on farms and you couldn't walk onto a farm without washing your boots and you couldn't take your car onto the farm, just in case. You couldn't transfer tractors from one property to another, just in case you picked up something and took it onto the farm. Biosecurity is absolutely important. That's why I was against the importation of apples from New Zealand when there was a disease over there. We railed against it and pushed against it. What happened? The disease just snuck into Australia by chance. Now it's here, we have no objection to importing the apples from New Zealand. We should never have imported apples from New Zealand, and we should put up barriers for our own protection, our bioprotection, because what protects our food and our farmers protects us.

What we eat is very important for our children. When I and other people my age were growing up, all the food that we ate came from within, probably, 10 kays of where we lived. You might have had some canned food now and again, but not a lot. There wasn't a lot around. Our food was seasonal, healthy and good for us. Milk didn't come in bottles; it came in a billy at the front gate, straight from the farm. Our bread was delivered by the bread man. It was a wonderful time to be alive, eating the freshest food created and grown on the Koo-Wee-Rup Swamp. You couldn't ask for a better food source than the Koo-Wee-Rup Swamp. I know that today all of you are still eating the asparagus that is grown in the Koo-Wee-Rup Swamp and the potatoes that are grown in the rest of my electorate. That next generation of farmers are going to be offended by this.

To put forward another position to the Deputy Treasurer: if you change the rules, you have to compensate the individual who is affected by that change of rules. That's called trust. You can say, 'Righto, if you've invested in your superannuation fund and it's over $3 million, we're going to change your taxation arrangements,' but at that point you should allow anybody to withdraw their funds from their superannuation and invest them in any way they would like, no matter what age they are, because you have changed the rules. If they want to invest it in property, in shares or in other forms of investment, do the right thing and let them. They said, 'Oh no, you can't do that,' because who's dominating? The big union superannuation funds are directing what they can and can't do. This government does not want self-managed superannuation funds. The big superannuation funds do not want self-managed superannuation funds. Those of us who do have a self-managed superannuation fund are being forced to have a digital identity. If we don't do it by 22 December last year, we will be fined $1.1 million. Really, why do my wife and I have to have a digital identity to run our own self-managed superannuation fund? It's crazy stuff.

I can't imagine the regulation that is being put on this generation that previous generations never had to deal with. I mean, since the early eighties we have been paying capital gains tax. We're now paying land tax that we didn't pay before and that is increasing exponentially every year. I know that isn't a federal tax but it is affecting everything the federal government does because we have a rental crisis in Australia. Why do we have a rental crisis? Because landlords are selling their properties to people who are going to live in that property, so there are no rentals left. I have estate agents in country areas who are losing as many as 150 landlords every three months, then we have a rental crisis. Why do we have a rental crisis? Because state government policies are good for the renter and they establish the rights of the person renting the house. I grew up with caveat emptor—let the buyer beware. Let the Australian people make their own decisions on their own behalf. If you don't want to rent at that price, don't rent at that price. Rentals are being taken off the market, caused by government policy and only government policy.

Look, it is sad where this nation is headed by people making regulations around our farmers, around our community and around superannuation that are not backed by common sense. It isn't until you have dirt under your fingernails that you would understand many of the issues that I'm talking about tonight. Thank you for the opportunity to address this parliament and the people of Australia.

Nola Marino (Forrest, Liberal Party, Shadow Assistant Minister for Education) Share this | Link to this | Hansard source

I want to commend the previous speaker for his contribution and also that of the Opposition Whip. What we have here is what they have both spoken about, another of Labor's broken promises. It is a very serious broken promise, as we have just heard from the previous speakers, because it actually undermines people's confidence in our superannuation system. What this does say to people, especially young people who are currently saving their superannuation, is don't bother adding to your super because successive Labor governments over the years will keep changing the rules whenever they choose, like they have done here. You can have no confidence in that superannuation system or what is currently on the table. If they are doing it now, they will do it again. Even the Prime Minister, as we know, said before the election, in very grave and seemingly sincere tones, 'My word is my bond.' Clearly, the Prime Minister deliberately misled the Australian people when he gave that commitment because there has been a litany of broken promises. This is one and it is a very serious one. We saw the $275 cut and power bills based on the amount people were paying for power at the 2022 election. We saw so much said about cost of living and what those opposite would do about it, and what have we seen? The absolute opposite.

The Prime Minister promised absolutely no change to the tax cuts. He also said he would retain Operation Sovereign Borders but remove the temporary protection visas, and reduce maritime and aerial surveillance as well. As I said, there is a litany of broken promises. We've heard Labor members in this chamber saying, 'The broken promise doesn't really matter; it only hurts a few people, so what does it matter?' Well, it does matter, and trust—or the lack thereof—does matter.

Debate interrupted.