Second Reading SpeechMr Sukkar (Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing)
That this bill be now read a second time.
This bill implements a number of measures which will improve the flexibility and equity of the superannuation system, assist first home buyers, reduce costs and complexity for self-managed superannuation funds and support Australian businesses to invest.
Schedule 1 removes the subsection in the Superannuation Guarantee Administration Act 1992 which exempts an employer from their obligation to pay the superannuation guarantee if their employee's earnings are less than $450 in a calendar month.
This exemption was introduced in 1992 to reduce the administrative burden on employers, however significant technological advancements in recent years have significantly diminished this burden. Importantly, recent superannuation reforms, such as the Protecting Your Super package, have also reduced the eroding impact of high fees and insurance premiums on small superannuation balances, paving the way for the removal of the $450 rule.
The removal of this threshold will improve equity in the superannuation system and increase the retirement savings of around 300,000 low-income workers employed in casual or part-time roles, around two-thirds of which are women.
Schedule 2 increases the maximum amount of voluntary contributions that can be released under the First Home Super Saver Scheme from $30,000 to $50,000. Other policy settings, including the $15,000 annual limit on eligible contributions, will not be changed.
This increase recognises that deposit requirements have increased with house price growth over recent years and this change will help first home buyers to save a deposit more quickly.
Schedule 3 reduces the eligibility age to make downsizer contributions into superannuation from 65, at present, to 60 years of age.
This will allow more Australians nearing retirement to make a one-off post-tax contribution of up to $300,000 per person when they sell their family home.
It will improve flexibility for older Australians to contribute to their superannuation savings. This may encourage more older Australians to downsize to homes that better meet their needs, ultimately increasing the supply of larger homes for young families.
Schedule 4 supports the repeal of the work test for nonconcessional and salary sacrificed contributions to superannuation which will be implemented through changes to the Superannuation Industry (Supervision) Regulations 1994 and Retirement Savings Accounts Regulations 1997.
To that end, schedule 4 amends the Income Tax Assessment Act 1997 to preserve the work test for personal deductible contributions made by individuals aged between 67 and 75. It will also make amendments necessary to allow eligible individuals to make nonconcessional superannuation contributions under the bring-forward rule.
These changes will improve flexibility for older Australians to make or receive contributions to their superannuation. It will allow retirees, who have not had the benefits of a mature super system throughout their working life, and may have accumulated savings outside of super, to get more out of the super system.
The changes build on the government's previous reforms to the age rules on superannuation contributions, further increasing the ability of older Australians to make contributions to their superannuation.
Schedule 5 will reduce red tape and costs for self-managed superannuation funds and small APRA regulated funds by providing trustees with greater choice in how they calculate exempt current pension income.
Trustees will be allowed to use the proportionate method to calculate their exempt current pension income when their fund is fully in the retirement phase for part of, but not the entire, income year. This delivers on a 2019-20 budget commitment to simplify reporting for these funds by streamlining administrative requirements for these calculations.
Schedule 6 extends the temporary full expensing measure introduced by the government in the 2020-21 budget by a further 12 months. Rather than ending on 30 June 2022, eligible businesses will now be able to take advantage of the incentive until 30 June 2023.
This will allow businesses with aggregated annual turnover or total income of less than $5 billion to deduct the full cost of eligible depreciable assets acquired from 7.30 pm on 6 October 2020 and first used or installed ready for use by 30 June 2023.
This will continue to support our economic recovery by encouraging businesses to make further investments. The time limited nature of the measure provides a strong incentive to bring forward investment projects before it expires.
All other elements of the temporary full expensing measure remain unchanged, including eligibility.
Full details of the measure are contained in the explanatory memorandum.