David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

I rise today to briefly speak on the issue of superannuation laws. Some libertarians think we should not be forced to send 9½ per cent of our remuneration into a particular saving vehicle to be accessed only when we are 60 years old. Other libertarians think the greater problem is forcing people to pay tax that funds age pensions for those who could have saved the money. They are willing to accept laws that force saving in order to reduce the numbers eligible for age pensions. I am one of these libertarians.

But we must remember the original bargain struck between the Keating government and the people of Australia. That bargain was that people would be forced to save in superannuation but that those savings would be taxed less harshly than other savings under our crushing income tax system. Retrospectively withdrawing that bargain would be unjust. Those who saved because of their understanding of the tax consequences should not then be deprived of the resulting asset through fundamental changes to the architecture of superannuation taxation. Reconsidering the bargain in a prospective way is different, although obviously tax increases that only apply to new saving decisions would not significantly increase revenue.

The debate needs to be well informed. Any proposal should be costed and published. We have a Parliamentary Budget Office eager to help. We do not need endless references to the value of superannuation tax concessions when nobody is proposing to get rid of those concessions in their entirety. We also should not hear endless references to the value of superannuation concessions when, if those concessions were removed, people would change what they do and the revenue gained would be much less. Many who now benefit from superannuation concessions would save less money in superannuation if the concessions were abolished.

Finally, it would be refreshing if there were some acknowledgement that reducing tax rates on saving is a good idea. Taxes on saving mean that two people who earn the same salary over their lifetimes get taxed differently. The person who spends most of their salary as soon as they earn it largely avoids taxes on saving, while the person who saves more of their salary because they want to do most of their spending later in life pays more tax. This is inequitable. As such, I believe that we should be seeking to reduce rather than increase tax rates on saving, including superannuation.