Superannuation
Transcript
Date: 15 May 2024
TRANSCRIPT
Ms WARE (Hughes): I rise to speak on the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023. At the outset, I will be opposing these bills. The Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 has the stated intention to reduce the tax concessions on total superannuation balances which exceed $3 million. In effect, this means that instead of paying 15 per cent, which is the existing rate on balances over $3 million, the tax rate will be doubled. There are three main reasons why I say that this bill should be opposed. Firstly, it represents a broken election promise—yet another broken election promise. Secondly, the $3 million threshold figure is not indexed. Thirdly, and lastly, it also taxes unrealised capital gains.
I turn, first of all, to the issue that this is a broken promise from the Albanese Labor government. Australians save hard for their retirement. We did not hear a single word during the election campaign of 2022 that said that any changes were going to be brought to superannuation. As a matter of fact, the now Prime Minister and other ministers said that there would be no changes to superannuation. Superannuation is a long-term investment. Hardworking Australians go and receive financial advice. They go and see their accountants when they make decisions about their superannuation. They are entitled to do that based on promises made by an opposition going into an election campaign that there will be no changes to that superannuation regime.
If we turn and look at the principles of superannuation, superannuation is Australians' money. It's not the government's money; it's our money. It's the money of Australians who have worked hard, saved and put aside some money. Some of it is compulsory, but there are also many Australians who have taken advice for years and have been aspirational. They have been told: 'Put aside some money now, and then you won't be on the age pension. You won't be a burden to the taxpayer when you get old, and it will also provide you with choice in the sort of retirement that you have.' When we have a government that comes in and suddenly starts taxing and changing the way that superannuation will be treated, this is a broken promise and a broken contract with the Australian people.
On our side, we want to encourage people to put money into superannuation. We want to see Australians with more choice about how they can use their retirement savings. The tax hikes that are proposed in this bill will affect people in almost every single profession. They'll affect tradies. They'll affect our police officers, our nurses, accountants and public servants. These tax changes will hurt all hardworking Australians. Superannuation policy must reward work, particularly as we live in a country that has compulsory employer contributions. It must assist Australians to have choices in their post-work retirement life. Therefore, Australian governments should be extremely cautious about raising tax on Australian super and particularly introducing changes to superannuation that have come as a big surprise after the election of 2022. I say that these taxes, overall, will undermine the very principles of superannuation.
One of the most contentious aspects of this bill is the lack of indexation. Almost unanimously, all submissions to Treasury, when this bill was placed in consultation, came back from stakeholders saying that the failure to index the $3 million is a major issue. It hasn't been indexed to take account of inflation, to say, 'Well, $3 million today is going to be very different to $3 million in 10 or 20 years when we've had successive years of inflation.' At this rate, the average 20-year-old today, who is earning an average wage, will pay this tax. If this tax is supposed to be directed towards higher income earners and people who have a much greater superannuation balance than the average Australian, why then is this government looking at slugging the average 20-year-old? It's simply unfair, and the indexation should be introduced.
The other major reason that I will not be supporting this bill is that this represents a taxation of unrealised capital gains. This violates the principles of the Australian taxation system. Capital gains are always taxed on realised profits, not on accrual. This is particularly unfair to taxpayers who, under existing laws, have placed large illiquid assets, such as farms or business premises, into their superannuation fund and may now lack the sufficient funds to pay this tax. This was an issue that was particularly raised by the National Farmers Federation. They used the example that farmers are not on a wage, not on a set salary, so sometimes they will move a farm or a premises into their superannuation fund, and this will now be part of new, much higher tax regime. But the farmer may not have the funds available to pay that tax. So what will happen there? This is a completely unfair attack on farmers.
Similarly, there are many small businesses that may move some business premises into their superannuation fund for exactly the same reason. Many businesspeople, small-business people in particular, do not earn a static wage, a static salary, and so they will look at other ways that they can save for their future, doing it by existing laws and under current advice from financial advisers and accountants. So, again, there will be many businesspeople impacted by this tax who had no idea about this tax going into the election in 2022.
I mentioned the National Farmers Federation, and other stakeholders consulted on and responded to the draft bill. The comments of Mr Tony Negline from Chartered Accountants Australia & New Zealand were particularly relevant. He said:
These changes will unfairly impact on people who are in or approaching retirement who followed the rules, and are also a tax trap for young players.
That's not me saying it; that's the head of Chartered Accountants Australia & New Zealand. Then Mr Peter Burgess from the SMSF Association said:
Taxing unrealised capital gains is a tax on market movements and changes in asset values, not income—an alarming precedent as it represents a fundamental change in how tax policy is implemented in Australia.
I'll conclude by saying that there are three major problems with this bill. It's poorly thought out and poorly constructed, it represents yet another broken election promise and it's a fiscal attack on farmers and small businesses. Its failure to introduce indexation means that many Australian workers will be caught up paying this tax, having already made long-term financial decisions. Lastly, taxing unrealised capital gains simply flies in the face of Australian taxation principles. It will particularly impact farmers and our small-business people. For all of these reasons, I'll be opposing this bill.