CANBERRA, ACT, Oct. 14 -- The Treasurer of Australia issued the following transcript:
Note
Subjects: low income superannuation tax offset, annual cyber threat report, engagement with American counterparts
Madonna Jarrett:
Morning everybody, I'm Madonna Jarrett. I'm the local member, the newbie. Welcome to my patch. I grew up literally 4 streets from here, so the Paddo is iconic for me. And a bit of a fun fact that I told one of the workers, is that my great‑uncle actually ran the Paddington pub way back in the 1920s, 30s. I can't remember how many years after that, but quite a while ago under the old building. So this is very much my background, but having said that we're here today because I've obviously got the Treasurer with me because we want to talk about the low‑income super support for low‑income earners. So with that, over to you Jim.
Jim Chalmers:
Thanks Madonna. It's great to be back at the Paddo with Madonna. The last time I was here, I was with the Prime Minister talking with Madonna and students about our cuts to student debt. Our student debt relief. It's good to be back here in the wonderful part of Madonna's electorate now with Madonna as the local member. Today, we're talking to workers like Sarsha and Jarrod about our changes to the low income superannuation tax offset. This is all about ensuring workers are the beneficiaries of a superannuation system which is stronger, and fairer, and more sustainable at the same time. We are increasing the low income superannuation tax offset - the LISTO and by increasing the LISTO by hundreds of dollars it will mean thousands of dollars extra in retirement for workers like Sarsha, like Jarrod and 1.3million workers right around Australia. 1.3million workers will benefit from the change that I announced yesterday to give Australians on low incomes more super and a more secure retirement as a consequence.
What we're doing here is changing the cap on the LISTO from $500 to $810 a year. We're making more people eligible by lifting the threshold from $37,000 to $45,000 a year. This will mean 1.3million Australians will get more super when they retire. This is also all about making sure that by better targeting superannuation tax concessions for people with millions of dollars in super already we can provide this better outcome for Australians on low incomes. This means a superannuation system which is fairer from top to bottom. And that's what today's announcement is all about.
Our focus here is not on the political commentary around the changes that we announced yesterday. Our focus is on real outcomes for real people in real workplaces like this one in Brisbane. Hundreds of dollars more for people in their superannuation accounts, which means thousands of dollars more when they retire. This is meaningful and substantial tax reform which will make the superannuation system fairer from top to bottom. It means better outcomes for people on low incomes. It means a better targeted concessions for people who've already got millions of dollars in their super.
This goes hand in hand with a lot of what the government is already doing in superannuation. We got the super guarantee up to 12percent. We're paying super on payday for the first time. We're paying the superannuation guarantee on paid parental leave for the first time. We legislated the objective of super. It's all about making sure that more Australians earn more and keep more of what they earn and retire with more as well. By boosting wages, by providing 3 rounds of tax cuts and now by boosting the low income superannuation tax offset it's all about people earning more, keeping more of what they concern and retiring with more. And that's why we are especially proud of the change that we've announced this week as a government when it comes to the low income superannuation tax offset.
Happy to take a few questions.
Journalist:
[inaudible].
Chalmers:
Just wait a second, please, Sarah. Can you start again, please.
Journalist:
The Parliamentary Budget Office has estimated that the old super tax proposal [inaudible] about $43.9billion over a decade. How much less will this new policy - how much less is this projected to raise?
Chalmers:
That's not a number that we would ordinarily release. We've made it clear over the forward estimates that the new arrangements will raise $2billion over the course of the forward estimates. A big reason why it will raise less over the forward estimates than the original package is because of the one‑year delay. The one‑year delay is necessary so that we can bed down these changes and make sure that we get them right before we legislate them as soon as we can in 2026.
But when this is up and running in its first full year of maturity, in the financial year 28-29 - the original proposal would have raised a bit over 2 and a half billion a year. It means that we can fund these practical and pragmatic changes but also at the same time provide more super and a more secure and decent retirement income for people who are currently on low incomes.
Journalist:
[inaudible]
Chalmers:
As I said to you in the answer I gave you to your first question, the Budget provides figures over the forward estimates. They'll be in the Mid‑Year Economic and Fiscal Outlook. But we've made it clear already that a major part of the difference between the billions of dollars which would have been raised under the original proposal and the billions of dollars which will still be raised under this proposal is the one‑year delay.
We'll just go here, because Kaiser is next.
Journalist:
[inaudible] suggests that the changes to super tax package might need to be reworked and if so, when?
Chalmers:
The Prime Minister and I have had a number of conversations over recent months about finding another way to deliver on the objectives of our policy. And our objectives here are a super system which is stronger and fairer and more sustainable. And even with these practical and pragmatic changes that I announced yesterday, this means another way to satisfy those objectives. It means a better outcome for people on low incomes. It means better targeted superannuation concessions for people with millions of dollars. It means a fairer superannuation system from top to bottom.
The Prime Minister and I have been discussing this for some time. We agreed the changes that I recommended to the Expenditure Review Committee on Friday when he was there. I got the Cabinet to agree them in his absence on Monday, yesterday. And I thought the best thing was to announce those changes more or less as soon as the Cabinet had agreed them on my recommendation. And so, I fronted up yesterday. I've been fronting up ever since to explain these changes, which represent meaningful and substantial tax reform to make the superannuation system stronger, fairer and more sustainable. And it's these objectives, which are shared between me and the Prime Minister. We've been talking about them for some time.
Journalist:
Treasurer, you took the original plan to the election, and you won a significant majority. Why water them down and change them now?
Chalmers:
We found another way to satisfy our objectives here, which is a fairer, stronger, more sustainable superannuation system. We have taken on board a couple of years of feedback. You know, as a government, certainly as a Treasurer we try and take feedback seriously. We work through issues in a considered and a methodical way and we come up with the best outcome that we can. And what we've done here is we've found a way to deal with some of those issues that have been consistently raised with us over the course of the last couple of years, to deal with those couple of issues and to come up with a package which still makes the budget much stronger, still makes the superannuation system stronger and fairer and more sustainable.
But also the new element which we're here talking with Sarsha and Jarrod about here and Chuggy at the Paddo, which is to get an even better outcome for Australians on low incomes. And we shouldn't lose sight that the genuinely new bit of what was announced yesterday in addition to the practical changes we made to the implementation of our better targeted superannuation tax concessions is a much better outcome for Australians on low incomes, and that's what I'm here to talk about.
Journalist:
Treasurer, what other revenue‑raising measures are you looking at to make up for that shortfall over the next 10years?
Chalmers:
Well, first of all, welcome on your second day at the Courier, and thanks for coming today. Look, we've already got a substantial package of tax reform that we are rolling out. This change that we're talking about today is not the only tax reform that we are pursuing. We've also got the standard deduction that we took to the election. We've got another 2 rounds of income tax cuts. We've made progress on multinational taxes and the PRRT. We've had tax reforms to encourage the building of build to rent projects. We've got tax breaks for small business. We've got tax breaks when it comes to the industries which will be central to a Future Made in Australia. So, we've already got a broad and ambitious agenda when it comes to tax reform. This is an important part of that but not the only part of it.
Chalmers:
We'll just go to yourself and then back to Sarah.
Journalist:
Did Paul Keating recommend any of the changes that you've adopted?
Chalmers:
I've been speaking to Paul about this for some years, and I think I spoke to him half a dozen times in the second half of last week. I take very seriously the feedback that Paul provides, and I value, frankly, the opportunity over a really long period now to engage with Paul Keating, someone who I have a lot of respect for. And I respect him too much to give you a sort of running commentary on our private conversations. I think his views are well known and his first public intervention into this debate was yesterday when he released that very positive statement.
So, I appreciate the opportunity to talk about super with Paul from time to time. Sometimes very frequently, including last week. But also, to talk with him about the economy more broadly and my job as Treasurer more broadly. And you can draw a straight line from Paul through subsequent Labor Treasurers and for this reason, you know as a Labor Treasurer I make my responsibilities as the custodian of Paul's creation very seriously. That means doing the important changes, making the important reforms to make sure that our superannuation system is as strong and as fair and as sustainable as it can be. Sometimes that's easy, sometimes that's expensive, sometimes that's difficult, sometimes it requires difficult decisions like the decisions we've taken on superannuation tax concessions. But it's all about taking the superannuation system that Paul created with his colleagues and making sure that it's its best version of itself.
Super is the envy of the world. All around the world people look at our superannuation system with envy. There's good reasons for that, but there's imperfections, too. There are issues around adequacy, particularly for women and low‑income earners. We're addressing that with what we've announced. There are issues around the sustainability of the tax concessions for people who might have $30 or $40 or $50million in super, and we're addressing that as well. That's not always easy, but it's important. And I'll always talk to Paul about it as we go.
Journalist:
Treasurer, AMP's Shane Oliver says the change in policy [inaudible]. Would you feel [inaudible]?
Chalmers:
We've shown over the course of 3 and a bit years that we can get the budget in much better nick than we inherited from the Liberal Party by deploying a combination of budget improvements. You know, we found $100billion in savings in 3years, $14.5 billion dollars in the last financial year alone. We've banked 70percent of the upward revisions to revenue which comes from a stronger labour market and stronger company profits. We've shown spending restraint.
We've done all of those things at the same time as we've made a number of changes to the tax system - PRRT, multinational taxes and in other areas including better targeted superannuation tax concessions. And so, it requires effort right across the board. It requires ongoing effort. We've been upfront about that as well. But it's night and day when you compare the budget that we inherited to the budget that we have now.
And if I could just say something about our political opponents for a moment. You know, when we came to office, they had only delivered deficits, and we delivered 2 surpluses, and we got the third year's deficit down to a fraction of what we inherited. We've got the debt down by $188billion, and that's saving us on debt interest as well. And so, I hear our political opponents talking about this superannuation change. Never forget the Coalition took to the election a policy to increase income taxes on a hundredpercent of tax‑paying workers. They have no credibility on tax. They have no credibility on the economy. And now they have no excuses when it comes to supporting our better targeted superannuation tax concessions.
We've dealt with the 2 issues that they said were the sticking point for them. They've run out of excuses. They wanted to jack up taxes on a hundredpercent of Australian workers, but they go to the wall for less than half apercent of people in the super system with very large superannuation balances. They've run out of credibility on tax. They've run out of excuses on super. I call on them to support our sensible, practical and pragmatic changes in the Senate so that we can give Australia's low‑income workers the better, more secure retirement incomes that they need and deserve.
Chalmers:
We might just take 2 more. We'll take you to and then we're done. You haven't had one? And then yourself and then we're done.
Journalist:
Treasurer, as a result of the new $10million threshold facing a 40percent tax rate, do you expect those affected will respond by pulling money out of their super and, if so, will that affect your revenue projections?
Chalmers:
Our projections for revenue take into consideration all of those kinds of assumptions. But what we're talking about here is still concessional tax treatment for people in the superannuation system. There are good reasons for that. But there's no good reason to continue to provide the very generous tax breaks for people who might have $20 or $30 or $40million in super. And in the course of coming up with these sensible changes to the superannuation package, some people who think deeply about these issues - were recommending to us a cap on super of $5 or $8 or $10million. We've gone down this path instead.
I don't give advice to people, personal financial advice to people. People will make their own decisions based on the policy that we announced yesterday. But this is a good, sensible, practical, pragmatic set of changes which recognises that tax will still be concessional for everyone in super, but it can be, will be and should be less concessional especially for people with very large balances.
Journalist:
Is the Trump administration willing or becoming more willing to engage with Australia?
Chalmers:
We've been engaging on every front we can with American friends in recent months and indeed, since this government came to office. And every minister more or less has a role to play in that. Pat's doing a wonderful job in this relationship. I'll be heading over there principally for G20 and IMF and World Bank meetings and also going to APEC in Korea on the way home as well. But the primary purpose of my trip is to encourage the big investors in the US to invest in Australia.
We've got a wonderful story to tell in our economy and as an investment destination, and the primary purpose of my efforts in addition to engaging with the Americans and engaging with my G20 counterparts is to tell the whole world what a great investment opportunity Australia is. Particularly as there's all this churn and change in the global economy, people are rethinking their investment destinations and their investment strategies. And for Australia - whether it's the AI opportunity or cleaner and cheaper energy - we've got a great story to tell the world, and I intend to tell it.
Last one, thanks.
Journalist:
Treasurer, on the annual cyber threat report, the average self‑reported cost of cybercrime, heard report for small business rose by 40percent to $56,600 while the cost to individuals rose 8percent to $33,000. How concerned are you about this?
Chalmers:
This is a big risk to small businesses, businesses of all sizes, our community more broadly and our country. Cybersecurity is a big risk to our economy. And that's why we're investing billions of dollars to try and combat these cyber attacks which feel like they're becoming more and more prevalent in our economy. So, a very big and serious risk. We're making very big investments to try and combat cyber threats. We encourage people to be vigilant in their own lives and in their own small businesses.
And we've made available some resources to help people make the right decisions at cyber.gov.au. So, a very big risk. That risk is laid bare in that report. We're making big investments. We are doing what we can as a government and we encourage people, whether at their own family level, in their small businesses and elsewhere, we encourage them to do what they can as well. Thanks very much, everyone.
Disclaimer: Curated by HT Syndication.
