House of Representatives

Taxation Laws (Superannuation) Bill (No. 1) 2002

Second Reading Speech

Mr Slipper (Parliamentary Secretary to the Minister for Finance and Administration)

That this bill be now read a second time.

The government announced in its A Better Superannuation System statement last year that temporary residents permanently departing Australia would be able to access their superannuation. The taxation arrangements for this measure are set out in Taxation Laws Amendment (Superannuation) Bill (No. 1) 2002. There are only a very limited number of situations where people are able to access their superannuation funds before preservation age. Temporary residents who have permanently departed Australia will not be retiring in Australia and often wish to take their superannuation benefits with them to the country in which they live, but are currently unable to do so. The government is proposing amendments to the Superannuation Industry (Supervision) Regulations, which will in future allow such persons to access their superannuation on departing Australia.

However, as the payment will be to a temporary resident who will not be using the payment for retirement in Australia it would not be appropriate for the payment to receive concessional taxation treatment. Accordingly, this bill, in conjunction with the Income Tax (Superannuation Payments Withholding Tax) Bill 2002, imposes special rates of taxation on superannuation paid to temporary residents permanently departing Australia and requires funds to withhold taxation from such payments at those rates. These amendments will claw back the taxation concessions on these payments while still allowing temporary residents permanently departing Australia to take their superannuation, rather than requiring them to leave it in Australia until retirement.

Full details of the measures in this bill are contained in the explanatory memorandum.

I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Griffin) adjourned.