MINISTER O'DWYER:
Today I am here in Hobart and I'm absolutely delighted to be talking about the changes that the Government's going to be making regarding superannuation. At the moment, there are around about 20,000 enterprise bargaining agreements, covering around about 40 per cent of Australia's workforce. 26 per cent of those allow individuals no choice whatsoever in relation to their superannuation fund. This is significant because at the end of the day, your superannuation is your money. The Government mandates you putting it into a superannuation fund and you should be able to say where that money goes. So the Government is going to make changes to allow you to make the choices that are right for you and your retirement future because who else is better placed to make those decisions? The Government is also very keen to see higher standards in our superannuation industry – world best governance standards – the reason for this is that we have seen examples in the past, in fact, in the not too distant past, which has seen the breach of members' information as was illustrated through the recent royal commission and if you had better governance standards, you could say that these sorts of situations would be much less likely to happen. So the Government has accepted the recommendations that were made by the financial system inquiry to increase governance standards, to have more independence on boards and to have an independent chairman on those superannuation fund boards and we understand as well that there were recommendations made before the Government came in under the previous government with Jeremy Cooper recommending that there needed to be one third independent directors on these boards. So together these are going to be significant changes to the superannuation industry, they're in the members' best interests, they're in consumers' best interests and they're in the best interests of those people who want to maximise their retirement income.
JOURNALIST:
Are changes to tax concessions on superannuation part of what the Government' s considering or what they'll be rolling out?
MINISTER O'DWYER:
The Government has been very clear to say that we've got a process in place that's considering tax reform. When we talk about tax reform, we're not talking about simply increasing taxes. We're looking at how we can lower taxes overall and getting that tax mix right. As the Minister for Small Business, I know that having a competitive taxation system is one that gives our businesses the freedom to be able to grow, to be able to innovate and to be able to employ more people. That's why the Government announced during the most recent budget, instant asset write-offs for small business so that they could invest in their small businesses. Those $20,000 instant asset write-off concessions are going to apply right through until the first of July 2017. So while we've taken nothing off the table we've got a very clear process in place and the framework is one where we want to have a more competitive Australia.
JOURNALIST:
Industry funds usually perform well by comparison, why do you want to change these laws?
MINISTER O'DWYER:
We want to make sure that individuals have choice around their fund. Enterprise bargaining agreements and workplace determinations dictate to individuals where their money goes in superannuation. What this means, for around about 25 per cent of those people who are covered by an enterprise agreement is that they have no choice in where their money goes. It means they are paying two lots of fees, they're paying in the case of those who have got two funds for instance, it means they might be paying two insurance premiums as well, rather than being able to bundle that together and put it into one fund. I'll give you an example, somebody wrote to me not that long ago. He was a student who's working part time at a supermarket and also working part time as a tutor at university. He is forced, through his enterprise agreements, to put money into two separate funds. That means two separate fees, that means two separate insurance premiums, and it means for him ultimately, less retirement income when he ultimately retires in the years ahead.
JOURNALIST:
Are you worried that retirees are passing their savings onto their children rather than spending it themselves?
MINISTER O'DWYER:
I think it's up to the individual as to how they spend their retirement income. It's certainly not for the Government to dictate how they spend their own money that they've earned.
JOURNALIST:
There's new research out today that obviously shows that is the situation though, is that part of the catalyst as to why the Government is looking at reforms?
MINISTER O'DWYER:
What the Government wants to do is to make sure that we maximise the income that's available for people in their retirement. We want to make sure that they are in the driving seat, that they can make the decisions about their retirement future. The Government's not there to dictate to them how they should spend their money, or how much money they should have. In fact we want to give them the choice, we want to make sure that they are making the choice about their retirement income and our changes to transparency, to governance, our changes ensure that there is choice in superannuation funds will mean just that.
JOURNALIST:
If changes to tax concessions aren't necessarily the first thing you are looking at can you detail what the changes will be that the Government is putting forward?
MINISTER O'DWYER:
As I said, there is going to be a process in place in relation to taxation changes, and getting the tax mix right. When the Government is in a position to talk about that we will absolutely do so, but we want to make sure that we have a more competitive Australia. It is really shocking to me to think that somebody on an average income, this year, will potentially be in the second highest tax bracket because of bracket creep. A lot of people query whether that is making us competitive, and whether in fact that's fair. And so, we are looking at balancing all of those issues when we consider getting the tax mix right. We also want to make sure our businesses are competitive. That's why the Government has lowered the company tax rate for small businesses by 1.5 per cent. That is very significant – a 1.5 per cent tax cut for small business – that was announced in the Budget and that will obviously continue. For those people who are part of a small business that has an unincorporated entity there is a five per cent discount for them as well.
JOURNALIST:
On the share market, are you concerned that $100 billion has been wiped off the Australian share market since the start of the year?
MINISTER O'DWYER:
Obviously we want to ensure that we have a strong and stable economy, and the Government will put in place the right policies to make sure that we get the foundations right. If we can get the foundations right, we can make sure that businesses have the confidence to invest and they have the confidence to employ more people. That is our agenda as a Government and that is our focus.
JOURNALIST:
What implications will there be for Australia and Australian tax payers if the Shanghai market continues to plunge?
MINISTER O'DWYER:
Obviously, we live in a global economy and as I said our focus as a Government is to make sure that we get the foundations right here. We need to be a competitive economy; we need to be able to ensure that our businesses are competitive. That's part of the reason we're actually making sure we get our tax mix right. That doesn't mean simply putting up taxes, no, it means making sure our taxation system is competitive. When we last embarked upon taxation reform, we made sure that that was not simply putting up taxes but cutting a whole range of taxes to make our economy more efficient. So that's the discussion we want to have with the Australian people.
JOURNALIST:
On capital gains tax, at the moment The Australia Institute says winding back the capital gains tax exemptions could save the Budget $46 million a year, is that something worth considering?
MINISTER O'DWYER:
Certainly that's the opinion of The Australia Institute and everyone's got an opinion on tax and no doubt they will continue to prosecute their case. They're talking about increasing taxes, and including the family home in that taxation mix. That's their opinion; it's not the Government's opinion.
JOURNALIST:
Is it fair that people whose family homes are worth more than $2 million are exempt from capital gains tax?
MINISTER O'DWYER:
As I said we have a process to consider taxation reform. The guiding principles behind that are about how we can make it more competitive and I am sure that everyone who has got opinion on tax can articulate those opinions. The Government is constructing a package that makes sense for all Australia.
JOURNALIST:
When can Australians expect more detail then, when it comes to changes you've been proposing to superannuation?
MINISTER O'DWYER:
We are in 2016 now and you'll learn all about it this year.
JOURNALIST:
Does the Government support Nick Xenophon's move to protect gift card holders caught up by corporate collapse?
MINISTER O'DWYER:
It's very significant when a business collapses and we have seen that most recently in the case of Dick Smith. It's very significant because it obviously impacts not only consumers, but also a number of small businesses and entities that may in fact have traded and done business with that business as well as the employees of that business. I not only have a great deal of sympathy for all of the people who are affected but I can say on behalf of the Government that the Australian Securities and Investment Commission has been very proactive and looking at the circumstances surrounding this particular collapse. They are investigating that and we will have more information in the not too distant future.
JOURNALIST:
On union governance – this is the last issue from me – how confident are you that the Government will get its legislation through to re-establish the ABCC?
MINISTER O'DWYER:
I call on the Labor Party to get real on this, to put the interests of the Australian people first. To put their retirement income futures first, to put aside their vested interest and to work with the Government in a bipartisan manner to make sure that Australians have greater transparency around their superannuation, have much better choice and competition in their superannuation and have the world's best government standards apply to superannuation. I know that the Labor Party has been caught short when it comes to governance; now is their opportunity to stand up for the Australian people.
JOURNALIST:
Is a double dissolution election being considered?
MINISTER O'DWYER:
That's a question you'd have to ask the Prime Minister, that's certainly not a question that I can answer but let me say this: we are keen to govern for Australians. We have got a big agenda, there is much to do. After the confusion, after the back biting, after the wasted opportunity that really typified the Rudd-Gillard-Rudd Government, there is much repair work to be done and we're getting on with it.