Second Reading SpeechMr Shorten (Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations)
That this bill be now read a second time.
This bill amends various taxation and superannuation laws to introduce a voluntary scheme for Australians and New Zealanders to permit them to transfer their superannuation savings between Australia and New Zealand.
This new scheme will permit Australians and New Zealanders who have lived and worked in both countries to make the most of their retirement savings.
The Australian government is committed to the closest possible relations with New Zealand. In 2009 the Australian government and the New Zealand government signed a memorandum of understanding to develop a trans-Tasman retirement savings portability scheme. The scheme is scheduled to commence on 1 July 2013 and is expected to assist the thousands of Australians and New Zealanders who move across the Tasman each year. The New Zealand Parliament passed the legislation necessary for the new scheme in 2010.
Currently, New Zealanders working in Australia must leave their superannuation behind when they permanently leave Australia.
More than 50,000 New Zealanders moved to Australia last year, whilst 14,000 people left Australia permanently for New Zealand.
In 2007, a working group of Australian and New Zealand officials was established to investigate options for the portability of retirement savings between Australia and New Zealand.
On 16 July 2009, the Australian and New Zealand governments jointly announced the scheme and signed a memorandum of understanding establishing the scheme and outlining its working arrangements.
Consistent with the memorandum of understanding, this bill will permit the transfer of retirement savings between APRA regulated Australian superannuation funds and New Zealand KiwiSaver schemes.
New Zealanders who move to Australia will be able to transfer their New Zealand retirement savings to Australia and add them to their Australian superannuation benefits.
Similarly, Australians moving to New Zealand, and New Zealanders returning to New Zealand, will be able to take their Australian benefits with them, to consolidate with their New Zealand retirement savings.
As the scheme is voluntary, Australians and New Zealanders can leave their superannuation behind, if they wish.
Superannuation is to be transferred tax free between Australia and New Zealand, although New Zealand transfers into the Australian superannuation system are subject to the contribution cap arrangements, consistent with the terms of the memorandum of understanding.
In general, the tax and superannuation laws of the host country will be applied to the transferred savings, with a couple of exceptions where source country rules will apply. These exceptions are designed to preserve unique features of each country's retirement savings scheme.
The portability scheme enhances the development of a seamless trans-Tasman labour market, by removing an impediment to labour mobility between these two nations.
The introduction of the scheme is an important step in our closer economic relations with New Zealand, and it supports ongoing progress toward a single economic market. Both governments are committed to this goal through the Australia New Zealand Closer Economic Relations Trade Agreement. At a personal level, the scheme will enable Australians and New Zealanders to streamline their financial affairs when they move across the Tasman. Individuals will be able to consolidate their superannuation in their country of residence, and avoid paying unnecessary fees and charges on multiple accounts held in the two countries.
This is the first time an international superannuation portability scheme has been implemented in Australia and is another Gillard government measure to improve the efficiency of Australia's world-leading superannuation system.
Full details of the measure are contained in the explanatory memorandum. I commend the bill to the House.