Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to 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.

Nigel Scullion (NT, Country Liberal Party, Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Have you got spies in there?

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

I will take the interjection. The Leader of the Nationals in the Senate says, 'Have you got spies in there?' I do not need spies to tell me that you are not talking about it or, if you are, you are pretty ineffective. It is quite clear that the policy that you are supporting, which has gone through your party room and cabinet, hits the people who voted you here, the people you are here to represent, more than anybody else—in fact even more than Labor voters. That is the reality.

We are voting for the removal of a tax break that gives low-income earners just some semblance of concessionality in the face of very substantial concessionality for superannuation contributions of high-income earners. Who would have thought that in fact the Labor Party, the Greens and the Democratic Labor Party would be standing up for rural and regional Australia so much more than the National Party when it comes to superannuation and retirement incomes? What is the phrase—'Lions in the bush and lambs in Canberra'? I think that is pretty apposite here. We have a lot of roaring out there. You see that in the FOFA amendments. You see that in Senator Williams talking big. You see that in National Party senators telling everybody how much they are here to represent the bush. Meanwhile they are backing in the Liberals with policies that do over regional and rural Australia. There is no other way to explain it and there is nothing to justify it.

Senator Scullion interjecting—

I welcome the interjections. If you are so clear that this budget is good for rural and regional Australia, why don't you stand up and speak on it? This is a tax hike on low-income earners. So why don't you say to 3.6 million Australians, many of whom might have voted for you, 'I think you should have a tax hike, but I think we should absolutely protect all the tax concessions that high-income earners in this country get when it comes to superannuation. That is the National Party position.' Explain to them why that is good, why that is the right position, and why it will help them to save for their retirement and be less dependent on the age pension as your Treasurer demands. He is very quiet now.

Government senators interjecting—

'Out of respect'! Thank you. I am not sure that you even got called, that is how gentle your interjections were.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Agriculture) Share this | Link to this | Hansard source

We are polite.

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

I think you are embarrassed, actually. The other constituency that is adversely affected is of course the small business community. What is the coalition doing in this legislation? Increasing the tax rates on small business. So it is a tax hike for low-income earners and a tax hike for small business through changing the threshold for the instant asset write-off. This increases the tax burden for small business and it also increases their red tape burden. The instant asset write-off was a Labor measure that enabled business to make an investment that it could write off quickly with a minimum of paperwork and an improvement to cash flow. When we came to office the threshold was $1,000. We increased it to $6½ thousand in a measure welcomed by small business around the country. We made an election commitment to increase it further because we want to back investment by small business and employers. What does this government do, the party of small business? It takes it right back down to $1,000. It was at $6½ thousand, increased by the Labor government. We promised to increase it to $10,000, but this government said, 'Actually we're going to reduce it right down to $1,000'—in other words, you start paying tax far earlier for any investment and on a far greater proportion of income. There is also a change in the depreciation of motor vehicles. That is gone under this legislation. So the government is radically changing not only the instant asset write-off but also the way in which it applies to motor vehicles—again hitting some of the very people the government purports to stand up for.

In the last few minutes that I have left I want to deal with the attack on the cost-of-living support for Australians that is contained in this legislation. What we see in the bill that is before the chamber is the abolition of the schoolkids bonus, which is $410 a year for primary school students and $820 a year for high school students. Of course, this adds up if a family has a couple of kids. Over the course of their schooling life, it amounts to around $15,000 worth of support—all gone under this government. On a daily basis over recent years, and certainly in this last period of time, the Prime Minister has been beating his chest about what he claims is a $550 reduction in the cost-of-living pressure for Australian families, a figure which is questionable in itself. If you look at what the government are now saying, they are moving away from that figure because they know it is not sustainable.

Senator Colbeck interjecting—

Well, the Prime Minister acknowledged $820 a year—it is obviously substantially more for a single high school student—which is abolished in the legislation that he is putting to this chamber. That is only one of the measures which this government has put forward. I described this budget at one point as a vicious assault on low- and middle-income Australia. I think Senator Abetz at the time took issue with what I was saying. But if you look at who this government is asking to bear the burden of its budget, it is low-and middle-income Australia, the people who are least able to afford the cuts which are being imposed by this government. Among the worst things about this budget is that it has been brought down against the backdrop of the lies told by this Prime Minister prior to the election. Australians were told repeatedly that there would be no cuts to health, no cuts to education. They were not told about so many of the cuts that are contained in the government's budget—and that is the backdrop to this legislation. It is not only this legislation, and the cuts in it, that the Labor Party opposes. What we oppose is a government that told Australians before the election that they would not have to worry about cuts and then handed down a budget which, as its centrepiece, has cuts to health and education.

In conclusion, the reasons for opposing this legislation have not reduced since it was last rejected in the other place. In fact, they have increased because of the arrogant approach of this government—the attacks on the retirement incomes of Australians, on low- and middle-income Australians, making it harder for people to save for their retirement. The government has said on a number of occasions that it simply wants to get rid of all the associated spending measures with the MRRT. What I would say to this chamber is this: the government should be able to stand up in this place and articulate to new crossbench senators the reason why these are bad policies that should not be a priority. They should come in here and tell Australians why it is that billions of dollars should be spent on gold-plated paid parental leave but low-income Australians have to take a tax hike on their super. They should come in and explain why it is that they want people to work longer and harder before they can retire. They do not want people to be leaners but, at the same time, they are making it more difficult for people to save for their retirement.

The measures in this bill are bad policy and they are set against a budget which is not only full of broken promises but an attack on low- and middle-income Australia.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I rise to speak against the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2] for the second time. Senators have already rejected this bill once but, obedient to their political masters in the fossil fuel lobby and heedless of the damage that their budget will do to ordinary Australians, the government are trying again.

Only this government would say that we are in a budget crisis and then axe a revenue-raising measure. Only this government would bring down the harshest and most unfair budget in living memory and simultaneously try to give a tax break to some of the world's largest corporations. In the limited time that is available to me this evening, I seek leave to move the second reading amendment standing in my name, to protect the low-income super contribution.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Ruston, you do not need leave; you can just move it.

Larissa Waters (Queensland, Australian Greens) Share this | Link to this | Hansard source

I move the second reading amendment standing in my name:

At the end of the motion, add:

  but the Senate is of the opinion that the repeal of the Low Income Superannuation contributions should not be concealed in this legislation as it will:

(a) diminish, by around $27,000, the retirement savings of one in three Australians,

(b) negatively impact on almost one in two working women and 80 percent of women who work part time, and

(c) will place further pressures on future governments due to increased costs to the aged pension.

The low-income super contribution is a tax rebate to low-income Australians earning less than $37,000 per year. It is a rebate of $550 per year, which is aimed at supporting their retirement savings. It addresses the discrimination in our super tax system, which favours high-income earners. That system sees low-income earners paying more tax on their super contributions than they did on their take-home pay, while high-income earners pay the 30 per cent flat rate on contributions, even though their marginal tax rate is higher. That means that high-income earners get a tax break while low-income earners do not.

The repeal of the low-income super contribution will impact disproportionately and unfairly on women. As the Australian Greens spokesperson for women, I indicate that the Greens strongly object to its scrapping. Women are more likely to be in casual and part-time employment and are more likely to have caring duties which take them away from paid work for a time. On average, women retire with $112,600 in super, while men retire with $198,000. There are many contributing factors, including caring responsibilities and unpaid work, career breaks and overrepresentation in casual and part-time work. But the fact remains that this bill, with the removal of the low-income super contribution, would deplete the retirement savings of one in every two working women and 80 per cent of women working on a casual or part-time basis.

By seeking to junk the low-income super contribution the Abbott government is making a cash grab on the retirement savings of one in three workers to the value of around 27,000, or 15 per cent, of their expected retirement savings. This raid on super savings will place further pressures on future governments in relation to the age pension. That is why we have moved the second reading amendment, to protect the low-income super contribution.

We come back to the fact that this will have a massive and disproportionate impact on women. It should never have been tied to the mining tax. The low-income super contribution was always about equity and removing it will further entrench the disparity that women face when they retire. The bill abolishes the low-income super contribution for all working Australians and, in particular, will have that effect on working women. This change has significant impacts on everyday Australians and, frankly, has not had the public airing and debate that it deserves.

Tonight, I would like in the very brief time left to me to acknowledge the hard work that has been done by a broad range of groups and individuals who have campaigned for this sensible and much-needed policy to be kept, particularly those working under the banner of 'Women in Super' and many unions and superannuation organisations. I think it is important to put this in the context of the other antiwomen moves that we see from this government. The Abbott government's record on women is bad and it is getting worse. The government's changes to HECS, by imposing the new interest rate on student loans, will again impact disproportionately on women. Women will pay an average 30 per cent more over the course of their working lives.

In terms of workplace gender equality reporting, we know that the Abbott government has delayed a scheduled improvement in that reporting, which would have required businesses to provide additional information on how many women they interview, appoint, promote and retain, compared to men. That leaves us with less comprehensive data on which to base efforts to close the shameful gender pay gap that we still have in this country, of more than 17 per cent.

Debate interrupted.