Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I rise today to speak on the Tax Laws Amendment (2009 Measures No. 1) Bill 2009 to make a contribution in relation to the spouse superannuation tax offset. The Greens are particularly concerned about the proposed changes to the spouse superannuation tax offset. The new definition of income will include employer superannuation payments made to low-income earners in determining the eligibility of their spouse to receive a tax offset if and when their spouse contributes to their superannuation. This means that a low-income person’s total assessable income, reportable fringe benefits and employer superannuation contributions must be less than $13,800 for their spouse to receive the tax offset. This is likely to reduce eligibility for some couples to receive this tax offset and therefore discourage them from adding to the superannuation of the low-income partner.

We know that many Australians have an inadequate amount of superannuation for their retirement. For example, ABS data from 2006 indicates that, on average, Australians across all age groups only have $52,000 in their super accounts, and this reduces to $35,000 for women. So, at a time when we should be encouraging more people to save more for their retirement, we are reducing incentives for them to do so. This is short-sighted and illogical. While this amendment may save the government money in the next budget and the out years, if we do not get people contributing more to their super, particularly low-income people, this will have a long-term impact on government finances as those people seek income support in retirement. This is of particular concern for women, who generally have lower superannuation savings and, due to work breaks undertaken to raise children and other purposes, are less able to boost their super during their working lives.

These changes should be considered as part of the comprehensive changes recommended by Harmer and Henry. These amendments are being considered prior to the finalisation of publication of the broader Harmer review into pensions and the Henry review of taxation. Why is this the case? This raises questions of whether these changes pre-empt broader reforms and what may occur if they are not consistent with the government’s future response to these reviews.

The Greens want to keep in this bill the ability for the government to close down loopholes that allow middle-class welfare to flourish, but we want to ensure that low-income people are not caught up in these changes. The Greens, therefore, propose to amend this bill to exempt from these amendments people whose gross income is less than $60,424 per annum and exempt from changes to the superannuation spouse tax offset couples whose combined superannuation is less than $300,000. We believe that these amendments preserve the basic aim of the bill while ensuring that low-income people are not unfairly treated. We also believe that these recommendations will ensure that low-income couples continue to be encouraged to boost the superannuation of the low-income partner. This is particularly important when many of these people are women, who we know hold significantly lower superannuation savings than men.