Annette Hurley (SA, Australian Labor Party) Share this | Hansard source

I want to explain the Labor senators’ dissenting report to the Economics References Committee’s report on the operation of employee share schemes in Australia. We were very concerned about the integrity of the Australian taxation system and were dismayed that the majority report paid little attention to the tax avoidance that has previously been carried on under the protection of employee share schemes and that the majority of senators did not appear to think that this was a significant problem. The government clearly does believe that it is a significant problem and that large-scale avoidance has been allowed to continue for far too long—mostly to benefit executives, who benefit from employee share schemes, not workers, who are entitled to small amounts under the employee share scheme.

Senator Pratt and I wrote the dissenting report. We are very supportive of employee share schemes as a way for businesses to encourage interest among workers in their own company and for workers to feel a part of the company, so there was no suggestion that employee share schemes do not have their value. But, as Senator Eggleston has just reinforced, to say that employee share schemes in Australia are not adequately promoted and highlighted and to suggest, as the majority report did, that they would be an alternative to our existing superannuation scheme is absolute nonsense.

In the US and the UK, from where the majority report got a lot of its evidence, there is no employer guaranteed superannuation scheme as there is in Australia, and that is causing those countries a great deal of trouble. The superannuation system in place in Australia allows employees to have superannuation which is broadly based over a range of companies; it is not unduly weighted on the company that they work for. This has caused severe problems in the United States when a company’s shares drop dramatically or when the company itself goes broke. The employees not only lose their jobs but also lose their superannuation. I was very disappointed to see in the majority report the suggestion of increasing employee share schemes to the detriment of our existing superannuation scheme.

The dissenting senators recognise the value of employee share ownership and of improving regulation to combat tax avoidance and to benefit Commonwealth revenues to the extent of $135 million over the forward estimates period, which would ensure equity and integrity and continued support for employees share schemes. Labor members strongly support the government’s measures on employee share schemes. I seek leave to continue my remarks later.

Leave granted; debate adjourned.