House of Representatives

Taxation Laws Amendment (Superannuation) Act (No. 2) 2002

Second Reading Speech

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

I move:

That this bill be now read a second time.

The government announced last year in its superannuation policy statement, A Better Superannuation System, a range of measures designed to enhance the overall attractiveness, accessibility and security of superannuation.

With the introduction of the Taxation Laws Amendment (Superannuation) Bill (No. 2) 2002, and associated amendments through the Superannuation Industry (Supervision) Regulations and Retirement Savings Account Regulations, the government will have delivered on a significant proportion of these commitments.

Over recent years there has been a growing realisation throughout Australian society of the importance of retirement planning and saving for the years ahead. Superannuation is seen as a vital element in planning for a comfortable and secure retirement.

The government recognises that it is essential that superannuation is safe, easily understood and fair for every Australian. Amendments in this bill together with the proposed amendments to the regulations will help achieve the aim of a safer, fairer and less complex superannuation system.

This bill introduces amendments to the superannuation guarantee law to require employers to make specified levels of superannuation contributions on at least a quarterly basis on behalf of their employees to avoid the superannuation guarantee charge.

Currently an employer has until 28 July following a financial year to make the required level of superannuation contributions on behalf of its employees, or be subject to the superannuation guarantee charge. While the majority of employers currently make superannuation contributions quarterly or more often, the law will be amended to require all employers to make contributions at least quarterly.

A number of enhancements to the superannuation guarantee law will also be made by this bill to facilitate the introduction of the new quarterly contribution regime.

Other measures contained in this bill will make superannuation more attractive and support retirement incomes policy including:

allowing a working person the opportunity to make personal undeducted contributions to a superannuation fund until age 75;
reducing the superannuation and termination payments surcharge rates from 15 per cent to 10.5 per cent over the next three years;
allowing contributions to be made (by third parties) on behalf of children who are under the age of 18 and otherwise do not receive superannuation support; and
increasing the fully deductible amount available to the self-employed for personal superannuation contributions made to complying superannuation funds or retirement savings accounts. Self-employed who claim an income tax deduction for personal superannuation contributions will now have an increased limit where full deductibility is available for the first $5,000 of contributions plus 75 per cent

Full details of these measures and some minor technical corrections are contained in the explanatory memorandum. I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Snowdon) adjourned.