Andrew Bartlett (Queensland, Australian Democrats) Share this | Hansard source

I will not take all my allocated time to speak on document No. 13, the quarterly report for 1 January to 31 March 2006, of the Australian Taxation Office on the Government Co-contribution Scheme. My comments are reflected in comments I made on document No. 5, a report already discussed. I take this opportunity to say that the super co-contribution scheme is something that the Democrats had a significant part in establishing. It is an example of how you can reach agreements or make deals with other parties and be open about them, defend them and promote their benefits. That usually means reaching compromises, and part of the arrangement here was that the Democrats support a reduction in the high-income earner superannuation tax. It was at 15 per cent; we supported it coming down in exchange for the superannuation co-contribution scheme, a scheme to assist low- and middle-income earners to have additional superannuation contributions provided by the government.

It is not a panacea to improve the superannuation savings of low-income earners, particularly women, but it is of partial assistance. I did want to draw attention to this document and document No. 5, the previous quarterly report, to show just how significant the amounts of money have turned out to be. Indeed, there were enormous underestimates, initially, about the expenditure. In the first financial year the expenditure was projected to be $115 million and it was $309 million. In the 2005-06 financial year the projected original expenditure was $235 million; that has now expanded to nearly $600 million, and it is increasing further. It is an enormous amount of money in one year.

I draw the attention of the Senate and those interested in this issue to research notes on the Parliamentary Library website dated 4 November last year which were by Leslie Nielson into the super co-contribution scheme and its performance to date. There were some concerns about whether this was the best targeted use of money for low-income earners. I can think of better ways to spend that amount of money to assist low-income earners, but I can certainly think of a lot of far worse ways. There is no doubt that it is helping low-income earners. The conclusion of that research notes that this scheme has delivered a number of benefits, in particular to low-income employees, particularly women, who appear to have gained significant contributions to their superannuation fund balances, and these benefits will of course compound over time by increased investment earnings.

It does note that the scheme is not necessary a panacea for all the perceived problems of low superannuation balances, and it certainly is not. But I believe that it has made a significant contribution. Part of the reason why the amount of expenditure is greater than was initially anticipated is that it has been increased further since then, and that obviously means greater expenditure. Even on the original amount that was made available, the uptake has been much larger than was originally suggested.

We hear protestations from the Family First senator in this place that he does not do deals, despite palpable black-and-white evidence to the contrary, which I outlined yesterday. But doing deals is not necessarily a bad thing; the issues are what is in the deal and being open about it. This is one example of a deal that the Democrats are quite open about having done, and we are quite pleased with how it has panned out. If you are looking at the positive and negative side of the ledger as to what was agreed to be put in place and the expansion of this scheme, it has come out very much on the positive side. The fact that it has been a positive for low-income earners is something I am pleased about.

There is an issue about some of those low-income earners being in high-income households. There is the stereotype of the doctor’s wife or a person with a high-income earning spouse being able to get extra government subsidy to assist with their superannuation entitlements when they are on a low income. There is some validity in that, but I would also say that there is a lot of validity in an individual having their own superannuation entitlements and not, into the future, being totally dependent on their spouse for their superannuation. That is important. I would also say that the evidence shows that that is not as big a problem as was suggested.

It is worth drawing attention to this scheme and the way it has played out in reality. We have those reports, and again that was something we required as part of the legislation. I think they have shown that it was a good deal—a good deal for low-income earners.

Question agreed to.