John Watson (Tasmania, Liberal Party) Share this | Hansard source

I move:

That the Senate take note of the document.

The latest quarterly report by the Australian Taxation Office on the Australian government’s superannuation co-contribution scheme for the period 1 October 2006 to 31 December 2006 is very welcome news in that it confirms previous reports as to the success of the scheme in attracting additional personal contributions to the superannuation savings of so many Australians.

Back in November 1995—and that was quite a while ago—I was Chair of the Senate Select Committee on Superannuation. The committee was very concerned and believed there was a need to promote the need for urgent action towards overcoming the poor superannuation savings of particular groups in our society. The committee issued a report entitled Super and broken work patterns at that time. It looked at the difficulties faced by groups of people such as women who were unable to maintain constant work patterns because of child-bearing or other family reasons. The success of superannuation is dependent on regular contributions over a 30- to 40-year timescale, with the magic of compounding growth giving rise to hopefully a satisfactory level of retirement income. This report looked at the lower income groups in general and tried to address some of the challenges which the set-up of superannuation placed in the way of so many people being able to accumulate sufficient retirement income to ensure a comfortable lifestyle in retirement.

One of the main recommendations of that report was that measures be taken to redress the tax imbalance experienced by low-income earners. By introducing the co-contribution scheme for low-income earners the coalition government has not only redressed the balance but also taken a major positive step towards encouraging people in this situation to contribute towards their own superannuation. Initially the scheme offered dollar-for-dollar matching of contributions, up to a maximum of $1,000. The scheme has now been made even more generous. It currently offers a co-contribution of up to $1,500 a year to match contributions of $1,000. Of course, there is a sliding scale depending on the level of income.

As many commentators have noted, and as I have on many occasions, this co-contribution scheme must be one of the best investments available to anyone at the moment. Thankfully, many Australians have grasped the opportunity to build their superannuation savings through this scheme. I note that many of the major industry funds are advertising the benefits of this and encouraging many of their members to take up this government offer. I am also pleased to note that over 30,000 people in my home state of Tasmania have received co-contributions and boosted their potential retirement incomes accordingly.

The success of the scheme was indicated in the first three years of its operation. Government contributions now total something like $2 billion. It is a very significant and worthwhile amount. Many of these contributors will be people earning their incomes through broken work patterns and through part-time, seasonal or other irregular work. Many will be women whose past work patterns may not have given them an opportunity to build up good superannuation savings and they are now able to boost these savings with the help of this generous scheme.

I note that the recent major superannuation reforms announced in last year’s budget included the ability for self-employed people to contribute to and benefit from this scheme from 1 July this year. This is a very positive step forward. This report shows that Australian workers are continuing to accept this scheme as a winner. With the government contributing $1.50 for every $1, this is indeed good news for superannuation savers in Australia.