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

I would like to speak to this quarterly report on the superannuation co-contribution scheme. I note Senator Watson’s comments about the origins of the scheme back in 1995 and the work of the Senate Select Committee on Superannuation. I am not sure who the Democrats’ representative on the committee was at the time. I suspect it was Senator Cheryl Kernot. She certainly played a pivotal role in the expansion of superannuation back in the time of the Labor government. I think the Democrats’ contribution should be acknowledged.

I also note the contribution of the Democrats to the co-contribution scheme in general when it was expanded after the 2003 budget. That was the period when I was Leader of the Australian Democrats and I think Senator Cherry, from memory, covered the superannuation area for the Democrats. The Democrats were pivotal in getting changes to what the government put forward initially in their budget in 2003, and the result was a significant cut to the then high earners’ superannuation guarantee levy, I think it was called. At the time, the Democrats were pivotal in reducing the proposed tax cut for higher income earners and putting the savings instead into government support for low-income earners who would be putting contributions into their superannuation.

I am very keen to put on the record the Democrats’ legacy and our pivotal role in redirecting resources that were to go to a big tax cut for the highest income earners and channelling it towards lower income earners and, at the same time, via that mechanism, encouraging them to increase their superannuation contributions or, in many cases, I imagine, start their own superannuation contributions. It has been a bigger success than anybody anticipated. Certainly the figures detailed in this quarterly report indicate that it is far more successful and, therefore, from the government’s point of view, far more expensive than they initially expected that it would be. It has since been expanded, as Senator Watson said, from that dollar-for-dollar matching to a $1.50 for $1 benefit. That was done in the following budget, in 2004. I think it is important to note the Democrats’ role in laying the groundwork for that co-contribution. It was our support that enabled it to happen, because it was opposed at the time by the Labor Party and by the Greens.

In looking at the document tabled yesterday, we can see that, just in that quarter from 1 October to 31 December last year, nearly three-quarters of a billion dollars have been paid out of government funds to low-income earners. That is obviously money that will assist in building up not only those individuals’ superannuation savings but also savings in general in the community. Looking back to the annual report that was tabled towards the end of last year, the total of superannuation co-contributions for the financial year 2005-06 was very close to a billion dollars—that was provided to people who were earning less than $40,000. That was expanded so that people could get a partial entitlement up to $58,000. As Senator Watson said, a higher than average proportion of those people are women and people who, by definition, have lower incomes. I think it has proven its worth.

The total amount of $742 million so far in that quarter that I referred to suggests that this financial year it will probably go over the billion-dollar mark of extra support for low-income earners to boost their superannuation savings. Whilst there are some issues with regard to equity, I think it is far more equitable than the alternatives that were around previously and will certainly massively boost savings for many people who otherwise would not have much in the way of superannuation. We all know that there is still a significant shortfall for many people, but this will go a long way to improve that and I am pleased that the Democrats have played a role in making that happen.

Question agreed to.