ABC NEWS RADIO WITH GLEN BARTHOLOMEW
TUESDAY, 28 FEBRUARY 2023
SUBJECTS: Changes to superannuation; Need for more competition; Consultations on 2026 Census topics.
GLEN BARTHOLOMEW (HOST): The Federal Government will cap superannuation tax concessions in a move it says will hit about 80,000 Australians. The changes will impact people with super balances of $3 million or more and will come into effect from the middle of 2025. At the moment, earnings from superannuation are taxed at up to 15 per cent, but that will increase to 30 per cent for those people. There will be no change for Australians with superannuation balances of less than $3 million. Dr. Andrew Leigh is the Assistant Minister for Competition, Charities and Treasury in the Albanese government and joins us now. Thanks for your time.
ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY ANDREW LEIGH: Real pleasure, Glen. Great to be with you.
BARTHOLOMEW: Explain why this change is necessary.
LEIGH: Well, if we continue the way we're going, superannuation tax breaks will cost more than the pension by 2050. Superannuation is meant to deliver a dignified retirement, not to be a tax-preferred inheritance vehicle. And yet there's 17 Australians with more than $100 million in superannuation. Think of it this way. Someone with $100 million in superannuation earning a 5 per cent return is getting a tax break, in the order of one and a half million dollars a year. Now, if Peter Dutton wants to stand up for those people, then he's welcome to do so. But our focus is making these reforms is to ensure that superannuation is sustainable.
BARTHOLOMEW: But for like it or not, those people made that decision and put that money there because those were the rules. They thought they knew what the rules were going forward. But you've moved the goalposts, haven't you?
LEIGH: Well, in 2016, the former Coalition government also made changes to superannuation. And we should be clear about these changes. No one's balance gets touched. This is about the tax rate on earnings. At the moment, the tax rate on earnings in the accumulation phase is 15 per cent. We're saying that up to $3 million, you'll still get that 15 per cent tax rate, but over $3 million, you'll pay a tax rate of 30 per cent. Still better than what you'd have if that was money just sitting in your regular account. There's still a tax-preferred advantage to superannuation. It's just not as large as it is now.
BARTHOLOMEW: So this affects, what, about 0.5 per cent of all super accounts?
LEIGH: That's right. 99.5 per cent of your listeners won't be affected. This is a measure which doesn't come into effect till 2025. It's a modest, targeted measure aimed at ensuring that superannuation is sustainable. The Liberals left us with nearly a trillion dollars in debt, and the idea that we should keep on borrowing money and so we can pay huge tax breaks to people with more than $3 million in their super accounts is, to me, unconscionable. So I'd be very surprised if the Liberals choose this particular ground to fight on. But stranger things have happened in politics.
BARTHOLOMEW: The Opposition does say it is a broken election promise, referring back to this response from the now Prime Minister during last year's election campaign
Journalist: Do you rule out any increases to super taxes and changes to caps?
Prime Minister Anthony Albanese: We've said we have no intention of making any super changes.
BARTHOLOMEW: You made some super changes. Is it a broken election promise?
LEIGH: Like we said, we weren't going to make major changes to superannuation.
BARTHOLOMEW: There was no major in that sentence I just played.
LEIGH: This is a modest tweak to the system. It's not something that's going to set the house on fire. No one's balances are being affected. 99.5 per cent of Australians won't be affected at all. It's a small tweak to the system which makes it more sustainable into the future.
BARTHOLOMEW: Jim Chalmers, the Treasurer, says it's modest. It'll raise about $2 billion a year. But are there more changes to come? The Prime Minister wouldn't rule it out.
LEIGH: We're not anticipating more changes. Glen, this is really about ensuring that the system is right for now. I understand when you make changes to superannuation that that can be troubling to some people, but it's just not sustainable to allow the system to cost us more than the pension costs. Now, the pension isn't a trivial part of government expenditure, it's a significant budgetary cost. The idea that super tax concessions could outpace it really shows you how far it's gone astray.
Now, the big problems in the system started under the Howard government, when a whole range of changes were made to superannuation, which have then subsequently been reined back. The former Coalition governments, the Abbott, Turnbull and Morrison governments, made some changes. We're making some changes as well. All of them are targeted to ensuring superannuation is sustainable.
BARTHOLOMEW: Is it-
LEIGH: Labor built super in the early 1990s, we want to preserve the system for the future.
BARTHOLOMEW: It will come into effect from the middle of 2025. So is it effectively an election promise for the next election? People will have the chance to vote against it if they want?
LEIGH: Well, we want people to ensure that they have time to understand how this is going to take effect. We're consulting carefully, methodically, as we always do, on these tax changes. If Peter Dutton wants to go to the next election fighting it for the bloke who has $400 million in his super account, he's welcome to do so. But I think he'd be better off focusing on the interests of middle Australia. People who understand that it's difficult to make ends meet, people who recognise the Government has to tighten its belt after a decade of Liberal profligacy and very little to show for it.
BARTHOLOMEW: Let's look at middle Australia's attempts to make ends meet, with supermarket prices and airfares and interest rates all rising. It's been pointed out that Australia has pretty dominant players in these major areas, with duopolies almost effectively in place in some markets, leaving consumers with nowhere to go. As Minister for Competition, how happy are you with our current arrangements? Are some companies too powerful for true competition to flourish? And are Australian consumers suffering as a result?
LEIGH: Yeah, I'm deeply concerned. I gave four speeches last year about the competition problems in our economy. We're seeing increased market concentration and growing markups. We're sending fewer start-up firms and fewer workers getting the wage gains that come from job shifting. The economy has become less dynamic and I'm keen to put in place policies that will change that. We've started by increasing the penalties for anticompetitive conduct and banning unfair contract terms. And we're now consulting about the digital platform services inquiry and unfair trading practices. We want to get on top of this because it's really important that we kickstart productivity. Some of the big productivity gained in the 1990s flowed off the back of those Keating-Hilmer reforms to competition policy. So competition policy has got an essential place to role to play in building a more dynamic, more competitive economy.
BARTHOLOMEW: And Australians are getting squeezed in the meantime?
LEIGH: Yes, absolutely. I mean, our inflation problem right now wasn't principally driven by a lack of competition in markets, but the lack of competition certainly isn't helping. You go from banks to baby food to beer. It's hard to find an Australian industry that doesn't have just a handful of big players. I'd like to see as much competition in the typical Australian industry as we see in the typical Australian sport. You can choose a dozen netball, football teams, but if you're choosing between a supplier in many Australian markets, you've only got a couple of choices. We'd like to expand those choices.
BARTHOLOMEW: You've pointed out today that the Australian Bureau of Statistics has opened public consultations on topics for the next Census of Population and Housing, due in 2026. This is what, an opportunity for the community to suggest what should be asked in the Census and you have the input on the topics that should be added, what's being added or subtracted in recent times as a result of this process?
LEIGH: Well, if you go back over the course of the last century, the Census used to ask things like whether you had an indoor toilet or whether your walls were made out of fibro. We've ceased asking those questions. We've added new questions about whether people volunteer, whether they've got a long-term health condition or whether they're a veteran. Every time we go to a new Census, we update the questions a little bit to make sure that the snapshot of modern Australia is just right. So we're going to be doing that again. I've got the privilege to have responsibility for the Australian Bureau of Statistics and they will be conducting a community consultation which will come back with recommendations to government about what we need to take off the Census and what we need to put on.
BARTHOLOMEW: I see the organisation Just Equal Australia has suggested that they're even putting a petition together to get questions about them on the 2026 Census. They say it's not acceptable that nearly ten years after achieving federal antidiscrimination protections for LGBTIQ+ people, the Census is still highly discriminatory against us. What are you saying?
LEIGH: I'm really open to a constructive conversation about how we measure gender and sex in the Census. We saw that conversation given the kibosh by the previous government, which overruled the ABS when it came to their recommendations on how to survey sex and gender. So we need to conduct the conversation respectfully, thoughtfully, but I really welcome people who have views on that or on any other topic that they think should be included or excluded from the Census.
BARTHOLOMEW: Andrew Leigh we've covered a bit of ground. Thanks for your time.
LEIGH: Sure have. Thanks again, Glen.
BARTHOLOMEW: Dr. Leigh, Assistant Minister for Competition, Charity and Treasury in the Albanese government.
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