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

My question is to Senator Cormann, as the Minister representing the Minister for Revenue and Financial Services. When introducing the budget on 12 May 2015, the former Treasurer Mr Hockey said, 'There will be no new taxes on superannuation under this government.' A year later, the Prime Minister says the government 'must live within its means', yet you have announced new taxes on superannuation. This is obviously to cover up your inability to live within your means. So now you have developed a taste for other people's superannuation, will you admit that you may dip into this once again, or can you commit that the superannuation taxation changes announced in the budget will be the only changes this parliamentary term?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Leyonhjelm for that question. Firstly, the coalition, going into the 2013 election, did make a commitment not to make any unexpected adverse changes to superannuation in our first term, and we delivered on that commitment. The honourable thing to do is to flag the intention to pursue reforms prior to an election and that is of course what we did in the 2016-17 budget. None of these changes have yet been legislated. We announced them as part of the budget just before the election. We took them to the election. They are reforms designed to make the superannuation tax concession framework fairer, more sustainable and fit for purpose. We put them in front of the Australian people seeking their endorsement, seeking their mandate. We were successful at the election and, as such, we not only have a mandate to implement the reforms that we took to the election but also have a responsibility to the Australian people to deliver on what we said we would deliver. We also said, before the election, that we would conduct a process of consultation in relation to the implementation arrangements for these reforms. That is a process that the Treasurer, together with the Minister for Revenue and Financial Services, has been conducting over the past few months. As soon as that process has come to a conclusion, relevant announcements on next steps and timings for the introduction of legislation will be made.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Leyonhjelm, a supplementary question.

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

You will index the $1.6 million cap on pension phase superannuation by the CPI, and the age pension by the higher of CPI and wages growth. This will lift the number of age pension recipients compared to Australians in self-funded, tax-free retirement and narrow the gap between the pension and the income of self-funded retirees. Minister, why are you promoting dependence over independence in this way?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I do not accept the characterisation that that is what the government is doing. I want to remind everyone that, as a result of our reforms, the proposal is for earnings from capital of up to $1.6 million of savings—and that is right: that cap is indexed—will be completely tax free. Earnings on capital above $1.6 million would attract the still concessional tax of 15 per cent. The structural problem that we have in Australia is that when you have a growing proportion of income generated in Australia completely tax free—zero per cent income tax—it means that every other Australian, every working Australian, has to pay more tax than they otherwise would have to in order to fund the necessary services of government. That is why we are pursuing the reforms that we are pursuing.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Leyonhjelm, a final supplementary question.

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

Minister, some of your superannuation measures impose a tax rate of 30 per cent—for example, contributions in excess of $25,000. Can you confirm that the government considers a 30 per cent rate of tax on superannuation savings to still be concessional, and can you indicate what rate of superannuation tax would not be considered concessional?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

A 30 per cent rate of tax on certain contributions into superannuation has been in place for some time. It is not something that was first considered by this government, and I know that the Senate will have the opportunity of arguing, debating and exploring all these issues in great detail when the legislation on this reform package comes before the Senate.