As I am sure many members of this House will be aware, self-managed superannuation funds are the largest sector in the superannuation industry, worth $400 billion. Members of these funds are advised by a range of experts, including lawyers, financial planners and accountants. The 11,000 or so SMSF auditors play a vital role in maintaining the integrity of a major sector of the superannuation system.
I cannot emphasise enough how important it is to those on this side of the House to ensure that this legislation is spot on the mark. The many people in my electorate who will be affected by this legislation will be bitterly disappointed. There are numerous self-funded retirees in my electorate of Wright and these additional changes to their superannuation make it harder and costlier for them to manage their retirement and thereby reduce the burden on the public purse.
This is simply another demonstration that this Labor government has no economic strategy and will always put its own political survival ahead of the national interest. I cannot support imposing more red tape—this bill is a classic example of that.
This legislation is another grab which will affect the people who can least afford it. I do not have a self-managed super fund but a number of people in my electorate do. It disheartens me when they bring their
statements to my office. The value of their funds is rapidly deteriorating. Early in 2007, the Labor government promised one in, one out, where every new regulation would be matched by repealing another piece of legislation or regulation. Latest figures show that since 2008 the Labor Party has introduced 18,089 new regulations and repealed 86—so 18,000 in and 86 out—an average of 11 new regulations added every single day since this government has come to power.
The first part of this bill looks at capital gains tax and how it affects those who choose to merge their funds from one to another. Let me state for the record that no problem has been identified that will be solved by these new requirements. It will merely make it more costly for Australians who wish to manage their own super fund to do so.
It is well known that the coalition supports Australians who want to look after their own retirement. However this Labor government just looks on superannuation— particularly for those who manage their own super fund —as a source of tax revenue. There is a constant battle to fiddle the books, for Labor to get their hands into the pockets of mums and dads and into the funds of businesses in order to hang onto some type of political credibility and a wafer-thin surplus.
As many in this House will know, capital gains tax can be a barrier to the merging of superannuation funds. This is because whenever superannuation funds merge this will typically trigger a capital gains tax event, which leads to neither capital gains nor losses being applied to assets being transferred. When a merger takes place and the assets have been transferred, the merged fund is typically wound up. However, when the merged fund comes to an end, any previous capital or revenue losses that exist at that time will be forgone.
The coalition supports that particular measure.
Due to the prevailing economic and financial market conditions in late 2008, a temporary taxation relief measure was passed in the form of 'loss relief' and 'asset rollover' to assist the superannuation industry and, through the industry, relevant fund members.
However, the relief provided was limited to 1 October 2011. At the time, those on this side of the House supported the tax relief for merging super funds as a sensible measure to ensure otherwise sensible mergers of superannuation funds were not prevented based on taxation considerations. That is because the coalition supports Australians who want to look after their own retirement. We will always support those Australians who want to do more to prepare for their own retirement.
This current bill is again, temporary; this time for mergers that occurs on or after 1 October 2011 and before 2 July 2017—and it has been made clear that that the coalition support capital gains relief for merging superannuation funds.
The next part of the bill introduces new registration regimes for auditors and self-managed superannuation funds. The recent super system review recommended that the Australian Securities and Investment Commission be appointed as the registration body for self-managed super funds approved auditors. The review found that not all approved auditors are subject to the same minimum competency standards nor are they subject to the same enforcement actions.
As some background information, the practical experience that regulation will require at least 300 hours in auditing in the self-managed super funds in three years, immediately before applying for registration with the Australian Security and Investment Commission. An approved self-managed superannuation fund auditor will also need to undertake at least 120 hours of continuing professional development training every three years. This training must include 30 hours of training about superannuation, of which eight hours of training is SMSF auditing.
There are many other facts that I could add here, but I feel it is important to voice issues currently in this bill. Since 2008 Labor has added 18,089 regulations to the books. Back in 2007, the Labor government had promised that it would make no changes to superannuation laws—”not one jot, not one tittle”. That was the quote from back in 2007 that there would be no changes. However, that promise has been broken now on nine occasions so far, generating a total $7.8 billion in additional revenue. So here we have a government saying one thing and doing another.
The Achilles heel of this government will always be the Prime Minister, four days before the election, standing and saying that 'there will be no carbon tax under a government I lead.' And, of course, there were the Treasurer's comments that it is hysterical that somehow we are moving towards a carbon tax. This is just another piece of legislation where the government have said one thing and done another.
These changes are undermining the Australian people's confidence in the superannuation system, lowering
the of contributions and consequently the level of savings available in their retirement. Voluntary superannuation contributions are down significantly in the context of a challenging market environment.
It must be disheartening for people to receive their superannuation statements and see on those self-managed super funds that the value of those assets— through no fault of the own, but through world market pressures. It would be an enormous burden on families and retirees as they sit there and work out how are they going to survive in retirement and have this additional burden of knowing that there are additional costs that this government intend to apply to their savings. The last thing we need is more Labor taxes on voluntary savings making a bad situation even worse.
This bill also aims to expand the existing reporting obligations for superannuation providers. And yet again, we have a government doing everything it can to try and prevent the inevitable failure. A superannuation provider is currently only required to report about individual accounts, if they have received contributions throughout the year, and either the superannuation interest is held at the end of the period or the member received a benefit during the period. Effectively, no statement is required for inactive superannuation accounts. However, under the revised reporting obligations funds will be required to provide statements for all members, both active and inactive. This is to support the implementation of the Stronger Super package, in particular the measures designed to facilitate consolidation of superannuation funds and accounts.
Thankfully, I can report back to my constituents in Wright that the Coalition Deregulation Taskforce will continue to consult businesses and community organisations around the country looking to cut red-tape.
The coalition has a clear road map for real deregulation by cutting $1 billion worth of red-tape out of the system. This is headed up by our Senator Arthur Sinodinos. He has been tasked with chopping out $1 billion worth of red tape—and I suggest that that task will not be too hard.
The last part of this bill amends the Superannuation Industry Supervision Act 1993 and the Retirement Savings Account Act 1997 to improve the linking of tax file numbers to superannuation accounts thereby, the government claims, making accounts less likely to become inactive. The changes are another example of the red tape that is so very typical of this Labor government. It is well known to those on this side of the House that Labor has a terrible track record when it comes to decreasing red tape. Red tape does nothing to help the Australian people achieve a self-funded retirement.
In conclusion, it is obvious to those on this side of the House that every time Labor increases taxes on Australian super savers it reduces the incentive for people to do the right thing by saving for and achieving a self-funded retirement. Labor have an addiction to wasteful spending and instead of standing up for Australians doing the right thing by saving for their retirement, this government is hard at work making sure that money goes down the drain. This is a government who just do not know how to manage money and how to live within its means, which is why it has to keep making adjustments to its fiscal policies.
We need a government that will encourage mums and dads, students and young working class Australians
to save so they can enjoy a comfortable retirement. Importantly, we need a government that spends less and lives within its means, and therefore can tax less, and that is focused on growing our productivity and our economy more strongly. Stronger growth would not only increase our prosperity; it would also improve superannuation returns and would lead to increased government revenue without the need for all these new and increased Labor Party taxes.
We will be moving an amendment in relation to schedule 2, and I commend that amendment to the House.