Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Hansard source

I rise to speak on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2] and indicate again that the opposition will not be supporting this bill. It is the second time that the bill has been before the Senate, and the reasons that we have given for rejecting this legislation have not changed—in fact, they have only been increased. They are increased in light of the government's deceitful and unfair budget.

The campaign against this tax by the coalition parties has been riddled with inconsistencies. Whether in opposition or government, the Liberal and National parties have a great deal of difficulty in deciding whether they hate this MRRT because it raises too much revenue from the mining sector or too little. On the one hand they say it is a disaster because it does not raise enough revenue and, on the other, they say it is a disaster because it has cruelled the mining industry in Australia. Well, you cannot have it both ways and both propositions cannot be correct. The government says we need to get rid of this because it does not raise enough money—and, really, if that is the case, how is it damaging the mining industry? We have heard all of this before—the same, tired scare campaigns we have come to expect from those opposite.

It is instructive when considering the MRRT to recall the debate around the petroleum resource rent tax. We were told at that time, when the Hawke government sought to introduce this, that we would see the end of offshore exploration in Australia. The legislation was implemented and enacted and not reversed by those opposite when they came to power in 1996 and it has raised for Australia since that time the equivalent in today's dollars of around $39 billion. I do not think anybody would suggest any longer that there is no offshore exploration going on because of the PRRT or no production going on because of the PRRT.

The bill also needs to be opposed for a range of other reasons. This government has attacked working Australians in its budget and it continues to attack working Australians through this legislation that is before the chamber. I first want to focus on the issue of retirement incomes—a significant concern for many in Australia, including in my home state of South Australia. I would make the point that we had an information session in the electorate of Hindmarsh at which Ms Macklin, the shadow minister, was able to explain to many Hindmarsh residents some of the changes proposed by this government—and certainly there is a great deal of concern in the community about the government's agenda.

The Treasurer has told Australians that we need to work longer—in fact, we need to have the longest working life in the world—and that we need to all work until we are 70 before we become 'leaners' on the Australian taxpayer, to use his word, not mine. He tells Australian workers, whether they are manual labourers, nurses, police officers—people doing tough jobs—that they have to work longer and they do not deserve a pension until they turn 70, because it is not sustainable. Given that backdrop, what is the Treasurer's current approach, as set out in this bill, to the retirement incomes of Australians as demonstrated in this piece of legislation?

This legislation and this government make it harder particularly for low- and middle-income Australians to save for their retirement. The government's position includes the most retrograde steps we have seen in superannuation in a very long time. When those opposite were in opposition, they promised no adverse changes to superannuation. Well, what Australians have seen is adverse change upon adverse change. The original MRRT repeal bill which came before the other place last year proposed a delay in the increase in the superannuation guarantee. But, of course, that position has worsened since then, because the budget contained yet a further delay in the increase in the superannuation guarantee—which, in keeping with this government's typically chaotic approach, was not originally reflected in this legislation. Under the previous, Labor government and under the current law of the land the superannuation guarantee was due to reach 10 per cent on 1 July next year. Now the government amendments will see this start date moved back to 1 July 2018. This is worse even than the original repeal bill by one year. So we have an ongoing, persistent continuation of delay in ensuring Australians can work to fund their own retirement. The question the government has never answered is how these changes make the retirement system in this country more sustainable or take pressure off the aged pension system, and the reason they cannot answer that question is it does not. It is an unfair and irresponsible measure.

The increase in the superannuation guarantee and the establishment of the low-income superannuation contribution, which I also want to discuss tonight, would have enhanced Australia's national pool of savings and superannuation by about $500 billion, so it is not a small amount of money we are talking about. In relation to the aged pension, Treasury analysis shows that a continuation of the previous government's policy settings would have halved the proportion of older Australians on the full-rate aged pension by 2050. In other words, the previous government's policy, which the government is moving away from, would have made our aged pension more sustainable and given people more opportunity to live their retirement without being entirely dependent on welfare. But of course this position is too much of a win-win position for the Treasurer, whose position is instead this: 'We are going to make it harder for people to save for their own retirement, and we're also going to make them work longer.' In fact, we are going to give them the highest working age in the world. There is not a single country with a pension age of 70 and not one projected to have a pension age of 70 in the OECD by 2035, which is when this government is proposing to introduce the age of 70 as the age of pension entitlement.

We hear from those opposite a lot about superannuation tax concessions and how they should be protected—a lot of rhetoric about the protection of superannuation concession—but, as they engage in that rhetoric, what do they do? They launch into an attack on low-income Australians. When we came to office in 2007 low-income earners in this country received a tax concession on their superannuation savings of exactly zero per cent. It is not fair. High-income earners receive substantial tax concessions for their superannuation because they are saving for their retirement. We all understand the policy logic of that, but what is not right is that high-income earner receive substantial tax concessions but low-income earners receive zero per cent tax concession. It is not good policy and it is not fair.

If you look at the combination of the government's policies—that is, the removal of the low-income super contribution and the rephasing of the superannuation guarantee—what we will see is $75 billion less in Australian retirement incomes by 2023. That is not that far away, and yet this government has the hide to lecture Australians about how long they should work at the same time as the government is undermining important advances in ensuring Australians from all income levels can receive tax concessions for their superannuation. What this government is saying to low-income Australians—to cleaners, to factory workers, to manual labourers, to clerical workers around the country—is this: 'We're not going to give you any support to save for your retirement. We're not going to give you any tax concessions, but we are going to ensure that high-income earners continue to get large tax concessions.' This is in the context of the previous government putting in place a policy that ensured we would give low-income workers in this country some tax concessions and pull back the tax concessions for high-income earners in a very modest measure—just a little bit to ensure there was equity in the system. Those of us on this side of the chamber say shame on this Treasurer and shame on this Prime Minister for treating the low-income workers of Australia with such contempt and such arrogance. The government that said they do not want any adverse changes in superannuation has made an adverse change if you have ever seen one: a tax hike for people on low incomes in Australia.

In terms of the impact on low- and middle-income earners—and I would remind the National Party, although I do not think the Leader of the National Party in the Senate is here—this is a regressive change which will affect low- and middle-income earners and will affect disproportionately individuals in rural and regional Australia. Mr Bowen in the other place has drawn attention to a report that said 24 of the 25 electorates hardest hit by the abolition of the low-income earners superannuation contribution are in rural or regional Australia. If you rank Australia's electorates and look at which electorates are worst hit by the effective tax hike on low-income workers, 24 of the 25 are rural or regional electorates. You would think in that context that you would have the National Party standing up in the party room and saying: 'No, this is bad for our voters. This is bad for the people we represent.' But what we have is silence.