Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

TREASURY LAWS AMENDMENT (BETTER TARGETED SUPERANNUATION CONCESSIONS AND OTHER MEASURES) BILL 2023

This Bill makes targeted, responsible reforms to support better economic, fiscal and regulatory outcomes.

Schedules 1 to 3 to the Bill reduce the tax concessions on Total Superannuation Balances exceeding $3 million.

The Government's proposed objective of superannuation is 'to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.'

In line with this objective, the measure implemented by these schedules is a modest, responsible change to better target tax concessions in superannuation. From 2025-26, the concessional tax rate applying to future earnings of superannuation balances above $3 million will be a headline rate of 30 per cent. Earnings corresponding to amounts below $3 million will continue to be taxed at 15 per cent.

This measure maintains concessional taxation within superannuation, and does not place a limit on the total amount that can be held within superannuation, beyond what is constrained by relevant contribution caps. It ensures that concessions are better targeted at amounts that deliver income for a dignified retirement.

In 2025-26, the additional tax on earnings imposed by the Bill is expected to apply to around 80,000 people, meaning 99.5 per cent of individuals with a superannuation account will be unaffected.

This change will increase revenue by $950 million over the five years from 2022-23. In 2027-28, the first full year of revenue collection, the measure is expected to increase revenue by $2.3 billion.

Schedule 4 will allow the Commissioner of the Australian Charities and Not-for-profits Commission, the ACNC, to make disclosures about new or ongoing investigations where the disclosure would prevent or minimise the risk of significant harm.

Secrecy provisions currently prevent the ACNC from disclosing whether it is investigating alleged misconduct by a charity. This adversely impacts public trust and confidence in the sector and in the ACNC as an effective regulator.

This reform will allow the ACNC to assure charities and donors that it is acting on issues of public concern and strengthening compliance, which will boost public confidence that the sector is doing the right thing.

By increasing public trust and confidence in charities and the ACNC, this reform will help to ensure donors and philanthropists continue their support for the sector. This will contribute to the Government's election commitment of doubling philanthropic giving by 2030.

Schedule 5 changes the frequency of the Financial Regulator Assessment Authority (FRAA) review cycles. Increasing the FRAA review cycles to every five years will support the FRAA to deliver more comprehensive reviews of ASIC and APRA. It will facilitate the delivery of more considered recommendations than is possible under the current biennial review cycle, which will improve the effectiveness of our financial system regulators.

Regulators will also have additional time to respond to recommendations between reviews, allowing future panels to assess implementation meaningfully and direct their focus more productively.

Schedule 6 amends various laws in the Treasury portfolio to ensure those laws operate in accordance with policy intent, make minor changes to improve administrative outcomes and remedy unintended consequences, as well as correcting technical and drafting defects.

Schedule 7 provides licensing relief to facilitate access by Australian professional and wholesale investors to global investment opportunities so they can diversify their financial holdings. This improves outcomes for millions of Australians as these services are commonly used by superannuation funds, among other financial firms.

To date, this relief has generally been provided by way of ASIC instrument. However, this legislation will elevate this relief to primary legislation and improve oversight for the regulator. This gives certainty to the industry that financial institutions and eligible investors can access the financial products and services offered by foreign financial service providers.

Schedule 7 provides targeted exemptions for foreign financial services providers that are either authorised in a comparable regulatory regime, a market maker in respect of derivatives that are traded on prescribed licensed markets, or providing financial services to professional investors.

Schedule 7 will also exempt certain foreign companies from the fit-and-proper person assessment when applying for a standard financial services licence in Australia, if they wish to do so. This only applies to companies regulated by a comparable regulator and is a restricted licence that enables them to service wholesale clients.

Schedule 8 updates the payments system regulatory framework to address the risks posed by new and emerging technologies.

The amendments expand the definitions of "payment system" and "participant" to ensure the Reserve Bank of Australia (RBA) has the ability to regulate all participants and payment systems, including digital wallet providers and Buy Now Pay Later service providers.

Further, it also introduces a new ministerial designation power that will allow the Treasurer to designate payment services or platforms that present risks of national significance, allowing them to be subject to additional oversight by appropriate regulators.

Schedule 8 gives the RBA greater powers to regulate a broader range of players in the payment system, as well as extending these powers to other relevant regulators where there is a material risk to the 'national interest'. These changes will modernise our payments regulation framework to ensure it is fit for purpose, now and into the future.

The Legislative and Governance Forum on Corporations were notified in relation to amendments in Schedules 6, 7 and 8 in accordance with the Corporations Agreement 2002.

Full details of the measure are contained in the Explanatory Memorandum.

SUPERANNUATION (BETTER TARGETED SUPERANNUATION CONCESSIONS) IMPOSITION BILL 2023

This Bill inserts a new Division 296 in the Income Tax Assessment Act 1997, which imposes a tax rate of 15 per cent for superannuation earnings corresponding to the percentage of an individual's superannuation balance that exceeds $3 million for an income year.

Full details of the measure are contained in the Explanatory Memorandum.

Ordered that further consideration of the second reading of these bills be adjourned to the first sitting day of the next period of sittings, in accordance with standing order 111.