Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Hansard source

I will make one point, firstly. Senator Cormann, of course, questions the long-term viability of the mining tax funding a range of measures that we have announced: the superannuation guarantee, the effective elimination of the contributions tax on superannuation for low-income earners and some other measures which I might get to if I have time. But if Senator Cormann is so concerned on behalf the Liberal-National Party coalition about long-term revenue impacts, why have they signed up to the superannuation guarantee?

I am pleased to say that, after some 20 years, the Liberal Party have accepted compulsion. They have always opposed it in respect of superannuation, and I find it fascinating that Senator Cormann and others can complain about long-term sustainability when they have signed up to a major expenditure item on the budget over the long term—that is, the superannuation guarantee. I find their philosophical shift fascinating as well, but that is a matter for them to resolve. The good thing is that they are supporting the superannuation guarantee.

In terms of the costings for each measure, that was well explored at Senate estimates hearings by Senator Cormann, and I have to acknowledge that he did a sterling job. What was revealed at Senate estimates as we went through the costings of each of the measures announced in the tax package was that, on each and every occasion when it has been appropriate to update each of those measures in that tax package, this government has done so. And we have done so totally consistent with past practice, as Senator Cormann well knows.

Senator Cormann wants long-term costing estimates beyond the forward estimates. I did point out at estimates hearings to Senator Cormann that this was not the case in respect of the GST package. We did not get long-term forecasts beyond the budget estimates, and that was a major tax reform. We did not have the long-term costings forecast, and I must say that when in opposition I did ask for that in terms of Better Super, the tax-free super tax package, which had cost implications well beyond the forward estimates.

So we have followed exactly the precedents set and the consistent fiscal parameters of the previous government. There is one exception, and that does relate to the superannuation guarantee. The government has provided a projected cost—I do not have the figure here—of the superannuation guarantee beyond the forward estimates, which is I think a final figure for seven or eight years because it is phased in over seven or eight years. That is a good example of the open, honest approach to long-term fiscal costing of a measure that does increase in cost. There is a significant cost to the budget in the superannuation guarantee, and that is brought about by the fact that the superannuation contributions tax is a cost to government revenue because the moneys flowing to superannuation via the superannuation guarantee are effectively taxed at a lower rate than income tax for a significant proportion of Australians.

While I am on this issue, another important element of the tax package is that Labor will effectively remove the contributions tax for some 3.6 million Australians. That is a very important reform because, effectively, low- and middle-income earners, two-thirds of whom are women, are overtaxed on their superannuation, and we intend to implement that reform. What is interesting is that the Liberal Party have signed up for the superannuation guarantee, despite their philosophical doubts, and I notice they had a bit of a debate in their party room about that, which was well leaked to the media today. Despite the Liberal Party's doubts, they claim, about the long-term fiscal sustainability of the increase in the super guarantee, they have still signed up to it. But they have signed up to it without the revenue, which is the mining tax.

So the Liberal Party are in an impossible position. They come in here and lecture us about long-term fiscal sustainability but they have signed up to a very significant budget measure over the long term that will cost the budget money, but they have refused to sign up to, and in fact are going to reverse, the mining tax that pays for it. (Time expired)