Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

Firstly, I would make a couple of points. This was not in the former government’s original proposals and it will impact on revenue. We will make that point very strongly. I would urge the opposition, if this is passed—and there will obviously be time when the message comes back from the House of Representatives—to really have a deep think about what they are doing here. It will impact on revenue. We are talking here about $1.2 billion in the forward estimates—from a measure that you proposed when you were in government. This will impact on revenue. We will obtain an estimate, as best we can, but it is likely to be in the hundreds of millions of dollars. I just issue that word of strong caution about what the opposition will open themselves up to. Having not flagged this approach in their own legislation before the election and putting forward $1.2 billion in revenue, we are now going to lose some part of that—and we will estimate that over the coming days. Obviously we are not sitting tomorrow. So I just issue that strong caution to you about what the opposition will open up in terms of the revenue approach.

The amendment has been put together by Senator Xenophon this afternoon. I do not want to be overly harsh, Senator Xenophon, but the structure of the amendment does reflect, I think, the late drafting of the amendment. If you look at it, there are a number of particular problems with the drafting of the amendment. Firstly, with respect to (5)(a), it says, ‘for whom the superannuation provider has a current address and who maintains regular contact with the superannuation provider’. Administratively, practically, how on earth would that be done? What is a current address? Is it a current Australian address? I am not being flippant here. Is it their current Australian address or their current overseas address—after the departing resident has left? We have had a debate about admin costs. Think about the admin costs associated with this. I would suggest that the superannuation industry itself did not put this amendment forward at the Senate hearing—did not make the suggestion of an amendment in this form.

Secondly, what does ‘regular contact’ with the fund mean—monthly, six-monthly, quarterly, yearly, five-yearly? There is no definition of what ‘regular contact’ is. Again, I think that reflects the way the amendment has been drafted. I do not know of any other provision where the commissioner is given this sort of power to make determinations.

Then there is the issue that I touched on in my opening comments. It is not the purpose of the Australian compulsory superannuation system to maintain ongoing tax concessions to temporary residents who have left the country. This has enormous implications. It is not the purpose, once a temporary resident has left this country, to allow them, from overseas, to continue actively operating a superannuation account in the Australian jurisdiction and have the Australian taxpayer pay for it, ongoing. I really do urge great caution on the opposition. They will have some time to think about this if it is passed tonight. The government strongly opposes this—very, very strongly opposes this—for the practical and the fiscal reasons that I have outlined and for the very basic reason that it does come as a surprise to me that the now opposition would support a measure that runs contrary to and indeed weakens their own policy that was announced prior to the election. I think even Senator Coonan would appreciate some of the political points that would be made in the broader community about this. I am just forewarning of the criticism that is likely to flow if this particular amendment is passed.

Senator Xenophon, we had a number of meetings earlier today. You did reconsider other amendments, and I did indicate to you when you mentioned this to me—this is not breaking any confidences—that we would not be supporting this approach and that I had some concerns about it, and I have dealt with those concerns.