PMB – Superannuation

Monday, 22 May 2023

Mr PITT: It’s always great to follow the member for Moreton. He’s gives me so much material. For the member for Moreton’s benefit, does he really think people would put money into superannuation if it weren’t for tax incentives? Without tax incentives, no-one would do it. Nobody would put additional money into an account that gets locked away for decades unless there was an advantage for them. They simply would not do it. We are all for people looking after their own money and making their own decisions with the money that they own and that they earn.

Madam Deputy Speaker, say it isn’t so. We heard promises from now prime minister Anthony Albanese during the election campaign that there would be no changes to superannuation. There would be no changes to franking credits, no changes to unrealised gains, no changes to capital gains and no changes to negative gearing. Now, we know how much of that has turned out to be untrue. Firstly, Australians made a decision on who they voted for at the last election based on those commitments. Secondly, they made decisions on their own finances based on the rules of the day that were in place at the time, as they should. For many of them—those who have self-managed super funds, for example—who have actually borrowed money and bought hard assets, changes to unrealised gains will absolutely destroy those investments, because they will not be able to pay the tax on them. They simply won’t have the money.

I’ll declare an interest: I have a self-managed super fund. Right now it doesn’t own any hard assets. I don’t have any of those types of assets, but I have had them in the past, and changes like these simply would have meant that I would’ve been forced to sell that property, because I could not pay what is coming as a tax bill.

We have seen the now Prime Minister of this country backflip on many of these issues, particularly those around superannuation changes and franking credits. Yes, I acknowledge what the member for Moreton has said: for most Australians that’s a lot of money. It is, but people made those decisions based on the rules that were in place. Is the idea that they have to unravel the investments that they used to pay for their retirement because this government cannot control their spending in just one budget? Let’s face it, the Labor Party increased spending in the budget in May by $185 billion over the forwards. That is $185 billion that has to be paid for. It’ll be paid for by taxation from hardworking Australians right around the country, whether it’s middle Australia, whether it’s those who are on much better wages and incomes or whether it’s the ones in between. You only have to look at my own electorate. The loss of the low-income tax offset meant that 51,000 of the people that I represent lost up to $1,500 this year in tax returns that they desperately need.

Let’s look at what is actually happening. The point made by the member for Moncrieff is exactly right. On 5 May 2023 Simon Benson, that well-known senior political reporter from the Australian, wrote:

More than two million young Australians earning an average wage throughout their working life could be hit with a future super tax under the government’s plans …

Guess what? You’ll get there faster with an inflation rate of seven per cent. That’s where it is right now. If the inflation window is not within target, they will reach these numbers much more quickly than before. That is the analysis of Treasury modelling. So what has been put forward by the member for Moreton, for example, is your own modelling from your own department, in terms of the federal Labor government. Based on the advice from Treasurer Chalmers’s office, a 20-year-old earning an average wage throughout their career would have a super balance of more than $3 million by the time they reached their early 60s.

Now, I am 53 and I can tell you, Madame Deputy Speaker, that in my 20s I made a decision around a particular super fund, which had a couple of grand in it, for which, at the time, I could get a thousand bucks because I’d moved jobs. I changed and I went to someone else and they said, ‘If you sign this piece of paper, you’ll get this, but it’ll lock this other bit up.’ I’ve got to tell you that, at the time, that was a lot of money. I made that decision, and consequently I now have a small amount locked away in a fund here with ComSuper—or whatever the arrangement may well be—that I can’t get. I can’t transfer it to my other accounts and I can’t move it because I made a decision in my 20s which impacts me now. So, for all of those workers out there in that age group, this will impact you. You will get there. It will absolutely get there. It will impact you directly.

Let’s look at what happens with this money. We’ve now seen reports around Incolink in Victoria. CFMMEU chief John Setka is looking to expand the Incolink empire, and guess why? It is because they gave $20.5 million in the last financial year to the CFMMEU and they’re looking to expand that empire across the country. It’s wrong. This is why so much money being tied up in industry super funds is incredibly dangerous for the country. They simply don’t look after it in the interests of members, only in the interests of unions.

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