TREASURER:
We are very pleased that the superannuation measures to produce fairer and more flexible and sustainable superannuation have passed the Parliament. These measures will come into effect next year on 1 July, in the main, and this represents the most significant change, to protect the flexibility, ensure sustainability to superannuation, we have seen in more than a decade. These are changes that enable the system to be able to be future-proofed to ensure that those who are saving for their retirement can have a clear set of understandings about how these measures now work. It gives the industry time now to make sure that by 1 July next year the arrangements are put in place. But the other important thing about achieving this important milestone today – a milestone that, I note, many suggested would not have been achieved and that this was not something that this Government would have been able to bring through this 45th Parliament – but yet again, this week, the Government has demonstrated that we get on with business in this Parliament, that we can get measures through this Parliament. Important changes that setup the future of whether it is retirement incomes or changes to registered organisations or other measures that are improving the governance of this country. What is also important about these measures today is of the $40 billion in Budget improvement measures that were set out, $20 billion and more have now been passed by this Parliament in just the last few months. We are making considerable progress in implementing our Budget program. That is obviously important in terms of the ratings agency commentary that has been made, but there is still $20 billion of work to do in terms of all the Budget measures that are there to be passed through this Parliament on both revenue and on expenditure.
That task remains before this Parliament. They've made it very, very clear that if we are unable to have this Parliament support the Budget’s consolidation plan then that rating is at risk. So, that is a very clear warning to the Parliament. As I said earlier on Adelaide radio today, this issue is a big challenge as to whether the Labor Party is going to step up to their economic responsibility. If those Budget measures do not pass the Parliament and if the ratings agency then takes the actions that they have clearly warned, then the Labor Party would have inflicted a ratings downgrade on this country. They have an opportunity to reverse their views on these measures as they reflect on these things over Christmas. We welcome the support that we have had for the measures to date but there is much more work to be done. In addition to the fiscal side of this, there are some important changes to be superannuation, which I am very pleased have been able to be passed today and Kelly will outline some of those again for you today.
MINISTER O’DWYER:
Millions of Australians today are going to benefit from the superannuation changes that have passed through this 45th Parliament. Australians are a very hardworking and aspirational lot and we believe it is important to give them the right tools to be able to help them to save for their retirement. The Government has pursued a number of measures that will allow them to do just that. One of those measures, which will benefit more than 800,000 Australians, is to level the playing field so that no matter who employs you, how you're employed, you will be able to, from 1 July next year, take full advantage of your concessional contribution cap. This is important for people who are working for small businesses. This is important for people who run small businesses but whom might earn some income on the side as part of their employment. They should not be disadvantaged by our superannuation system and they were until today. We think it is important that they, like other Australians, should be able to secure their retirement future and their retirement income, and we are helping them to do that.
The Government, through our measures, has spent about a billion dollars back into the superannuation system to help those Australians to save for their retirement. We also think it is critically important that people who have interrupted work patterns or who might have lumpy income are able to also save for their retirement. The current model in superannuation says that, basically, you have got to be working full-time to be able to take advantage of your concessional contributions. This doesn't work for women who are taking time out of the workforce to care for children; it doesn't work for people who have taken time out of the workforce because they're caring for an elderly relative; it doesn't work for people as well who have irregular income. But, again, through our flexibility measures, we are changing this and we are allowing people from 1 July in 2018 to be able to catch-up on their concessional contributions. Now, this is good news for more than 230,000 Australians. In fact, for those Australians who have got less than $500,000 saved in their superannuation, which is millions of Australians, we think it is very unfortunate that today in the Senate and in the House previously, the Labor Party actually opposed these flexibility measures. Because superannuation isn't simply a revenue grab. It is about making sure the system is sustainable. It is about making sure that it is fair and, above all, it is about making sure that it is flexible. And it is about making sure that we look after all Australians, not just a few.
QUESTION:
Treasurer, given how much political pain there has been about this super reform for most of this year, the first question is – was it worth the political pain? A related one, which is, do you think it will cost you at the next election given the concerns on the conservative end of the political spectrum about the increase in super taxes?
TREASURER:
I think this is a sustainable reform, I think it is a fair reform, I think it is a necessary reform. We have a world-leading superannuation system in this country and this makes it even more so. And this is always your job when you hold these sorts of posts. Yes, we acknowledge that we had to make the case and we had to make the argument, and we had to take it through the Parliament, with our colleagues, and work through all of those issues, but that's the work of government. That's the work of reform. Much is often written about ‘where's the reform’ by commentators. Well, it is looking you right in the face. Today's reforms that passed through the Parliament were not easily won but they were important to achieve, and the Government remained resolute in pursuing these for the reasons that Kelly has just outlined. It needed to be fairer. It needed to be more flexible. It needed to be more sustainable. We took the difficult decision to go and pursue that and we took it to an election. We actually were upfront with the Australian people about it and we made our case out there and we got the feedback. Now, this is in contrast to what the Opposition did. The Opposition, in the amendments that they sought to move in the House and supported in the Senate, that was their secret plan on superannuation – to tax it more. They never told Australians before the last election that they were going to walk away from catch-up concessional contributions or to walk away from allowing small business owners and home businesses and contractors and others who also have wage income from not being able to access their concessional contribution. They didn't tell them that. They didn't tell them they wanted to tax them more on their contributions by lowering the Division 293 threshold. They lied about all of that – absolutely all of it and then had the gall to give the Government lectures in this Parliament about superannuation. At the next election there is only one party that is going to be seeking to tax superannuation more and that's the Labor Party. They've made that very clear in the Parliament. We have pursued these reforms because we think they have been very important to retain the integrity and the sustainability of a world-class superannuation system. So, yes, David, it was worth it.
QUESTION:
How much of these revenue measures will deliver an improvement to the Budget bottom line? There is a very real prospect that flat labour growth and falling company receipts will more than offset that and we will see that on December 19 in MYEFO. Would the Government consider further revenue measures to ameliorate those falling revenues?
TREASURER:
The Government is pursuing the Budget measures that we outlined. There's $40 billion of them and more than $20 billion of them have now passed this Parliament. And we have got another $20 billion to go. So we are going to continue to pursue that. On 19 December you will get an update on the Budget position, in the normal process, after the September Quarter National Accounts have been finalised and other collections data has been brought together. Then you will have a far better picture, as will the Government, about the nature of where things sit at this point. We are aware of the revenue weaknesses that have arisen from the slower growth in wages but also company profits, and things like that. As a Government, what we are focusing on is getting expenditure under control and ensuring the integrity of the tax base and to ensure that the measures that we have are sustainable over time. Today's success in getting this through the Parliament, I think, shows the balance of those factors. We will continue to go down that path. We will continue to go down it. It is only the Labor Party that is proposing to have higher taxes. The Labor Party is actually proposing higher taxes and, amazingly, have a higher deficit as well to the tune of $16.8 billion and that is after they've reversed company tax cuts in the forward estimates and after they included the additional revenue from putting additional tax on super that relate to these measures and they still end up with a deficit of $16.8 billion. How they think that will convince any rating agency anywhere in the world that that's a good plan is beyond me.
QUESTION:
Treasurer, I am a little unclear from that answer though. It sounds like what you're saying is in the first instance you've pursued the $20 billion or so worth of savings measures. Are you taking revenue measures off the table for the rest of this term? Are you taking them off the table at MYEFO? Are they on the table?
TREASURER:
We're pursuing our Budget. We're in the middle of our Budget, we are halfway through implementing those Budget measures and we are very pleased with the success we have been able to achieve in what has been a very brief period of time. I think you would all agree in the last Parliament we weren't able to progress as quickly as this in terms of getting important Budget measures through. Some of those Budget measures we have had success in getting through in the last few months had sat on the table for three years. So we are making great progress. That gives me reason for optimism James.
QUESTION:
So to be explicit you rule out taking any further superannuation tax changes to the next election?
TREASURER:
This is our package. This is why we did it holistically, this is why we did it comprehensively. Where the system can always be improved for the benefit of superannuants, that's always an objective of every Government, but when it comes to the tax measures that sit around superannuation this is what we have done and we need to have the stability and certainty of these measures now being in place.
QUESTION:
How confident are you in bringing a surplus in 20-21?
TREASURER:
I am as confident as I can be on the basis of the parameter projections that are in the Budget. The real question is the Budget will return to balance where we can be most confident when the Labor Party accepts its economic responsibility to pass the savings that are in this Budget. That's what it boils down to. The question of whether that balance is achieved has nothing to do with the passion and determination of the Government to pursue that objective. We've set that out. We actually took it to an election. We set that out absolutely and we're pursuing that. The question mark sits on the Labor Party. They're the ones standing in the way of measures being passed that would give a greater level of confidence about those issues. Now, the statement will come out in December and that will update what the impact of parameters and other impacts are, and you will see that there. The projection is for the Budget to return to balance in 20 to 21 and there is nothing at this point that would suggest that that would be different.
QUESTION:
Of the $20 billion remaining to be passed, in the context of you mentioning the passage of measures from three years ago, the so-called zombie measures that have passed, are you therefore saying the rest of these zombie measures will be brought to the Parliament early next year, is that the objective?
TREASURER:
Some of them are already there. So, of course. They're all part of that $40 billion target that we have and we will continue to pursue them and we remain in active discussion, sadly, just with the crossbench, because the Labor Party are the ones who refuse to face up to their economic responsibility in this Parliament. They therefore put the crossbench in the crosshairs on being able to pursue important changes that restore the Budget to balance. So we will continue to pursue that.
QUESTION:
We are going to see a world where both the US and the UK have much more competitive tax rates than Australia…
TREASURER:
Yes.
QUESTION:
What is going to happen when you can't get tax cuts through?
MINISTER O’DWYER:
Can I just put that into context because I think it is a very important point, Jo, that you've raised. Fifteen years ago we had the ninth lowest corporate tax rate amongst advanced economies and today we have got the sixth-highest amongst the 35 OECD countries. That is very, very significant. We know already that with the UK and with the US, they are pursuing a very aggressive tax agenda which will see company tax cuts across the board so that they can be even more internationally competitive. They're even talking company tax rates as low as 15 per cent. Now, we rely on investment in Australia. We rely on it. It is critical, which is why we have a tax enterprise plan that we have announced as part of the Budget. It is why we are pursuing these measures. It is very disappointing to us that there are around about 4.5 million Australian who are employed by small businesses in this country. There could be even more if those small businesses had even more money to invest in their business and the Labor Party is actually blocking them from getting a company tax cut from 1 July of this year. They're doing that because they refuse to allow us to increase the threshold for small businesses from a $2 million turnover to a 10 million turnover. They are penalising small business, they are penalising our economic growth opportunity, and they are penalising Australian jobs. They need to get very real on the sort of international environment that we're in today and the need for our country to be able to continue to grow.
QUESTION:
If push comes to shove, and it is a choice between keeping some of the measures you took to the election, things like the company tax cut, or keeping a 20-21 surplus, keeping that Triple-A credit rating what's the priority?
TREASURER:
We seek to manage all of these objectives and I don't share your pessimism on these issues. We're $20 billion out of $40 billion down the road already in just the first several sitting weeks of the 45th Parliament. In a Parliament in which the commentary was nothing would be able to get through and even the measures that the double dissolution was being fought on would be impossible to achieve after this election, well, the last week or so, and more, have proved those commentaries absolutely wrong. I think what we've demonstrated as a Government is the ability to work these issues through the Parliament. We will continue to do that. We will continue to work those issues through. You have to be mindful of the impact of your economic policy and what the objective is. The objective is to increase the amount of work people can get, the number of hours they can get, the amount of wages they can earn and the amount of profits companies can earn. That's how you lift your revenue. You don't do it by squeezing the tax lemon until you get arthritis. What you do is do things in the economy like cut the tax rates particularly for small and medium-sized business which gives them the room to do this. What Labor is doing by blocking this is risking Australia being stranded – economically stranded. They are looking to Bernie Sanders and Jeremy Corbyn for their tax policy advice. Not where they should be looking, to Theresa May and, indeed, Donald Trump. He announced it after we announced it in our Budget. I'm sure he will give the Australian Government credit for that in some point in time. Nevertheless, it is a great idea, it works to support investment and jobs and that is why we believe in it. The Labor Party used to believe in it. They used to believe in it. I don’t know what they've caught since then which means they have gone in exactly the opposite direction. That is why we remain committed to it.
MINISTER O’DWYER:
So much did they used to believe in it that, of course, the Shadow Treasurer, in his book Hearts And Minds, which was his real commitment, we presume, to, you know, his economic vision for the nation, spoke about it several times. About his commitment to actually lowering the company tax rate to 25 per cent so that we could be internationally competitive. But this is the problem – is that Labor are only interested in their political self-interest, not in the national interest. We are interested in the national interest and will continue to fight for it.
QUESTION:
[Inaudible]
TREASURER:
We're very pleased to have achieved the result we have today with the passage of these superannuation bills. They are important changes. They are important reforms. They have been hard-won but they have been secured, just like the registered organisations, just like the omnibus bill, just like all the other measures that people said wouldn't get passed in this Parliament. So, we'll just get on with the job and right now we'll get onto Question Time.