25 August 2016
Transcript - #2016047, 2016

Interview with Kieran Gilbert, AM Agenda, Sky News

SUBJECTS: Superannuation, Budget repair.

KIERAN GILBERT:

Minister for Revenue and Financial Services Kelly O’Dwyer, I want to start by asking you about Labor’s proposal. Could this be a scenario where Labor is the party that you are going to have to negotiate with given the Greens go further and the crossbench don’t seem interested in what you are trying to do on superannuation?

MINISTER O’DWYER:

We have said with superannuation that we want to have a policy that delivers the sort of retirement future that people want and expect, that has flexibility but is sustainable over time and we have very much agreed with the objective that was set out by David Murray in the Financial System Inquiry which is to provide retirement income that either substitutes or supplements for the Age Pension. Now Labor has come out with a policy that is going to make it that much harder for older Australians, for women, for carers, for anyone who has taken time out of the workforce to be able to catch up on their superannuation contributions. They are going to make it more difficult for people who are self-employed, who are contractors, who work for small business because they are scrapping flexibility measures that actually give those people the ability to be able to contribute more concessionally to their superannuation retirement income.

GILBERT:

To catch up – people returning to work and so on?

MINISTER O'DWYER:

Yes absolutely and to be able to catch up. So let me give you an example. If a woman takes time out of the workforce to have a child or a husband takes time out of the workforce to actually care for his child, they can catch up from the first of July next year on their concessional contribution that hasn’t been used. So for instance it will be $25,000, they will be able to add that to the next year and they will be able to do that on a rolling five year basis if they have got a low superannuation balance.

GILBERT:

Now I should mention to our viewers if they want to watch the Treasurer Scott Morrison whose speech has begun that is on channel 602. You can watch that via the Business Channel now. We will keep going with our discussion with Kelly O’Dwyer but as I say with the speech there the Treasurer underway on Channel 602. But back to our discussion though, in terms of what Labor has put forward on the superannuation front the reduction on the threshold for the 30 per cent tax rate from $250,000 to $200,000 is the government willing to look at that at all?

MINISTER O'DWYER:

Well no because what Labor is doing is they simply want to tax people more. They want to tax people more and the very fact that they are wanting to tax people more and not even deliver the flexibility measures means that this is something that they see simply as a revenue grab. Now we don’t, we see this as a holistic package we think it is important that people who need extra assistance be able to contribute to their superannuation should have that extra flexibility to make those contributions. So for instance, somebody who is self-employed who isn’t just a wage or salary earner under the existing rules they would not be able to contribute concessionally to their superannuation. We are making it a level playing field so that those people will be able to make their full concessional contribution because we are scrapping the ten per cent rule that got in their way.

GILBERT:

You say that Labor wants to just increase taxes, but aren’t you doing the same thing by reducing the threshold to $250,000 per annum for that 30 per cent rate that you pay on contributions, you are already doing that and you have don’t that, Labor is just taking it a bit further to $200,000.

MINISTER O’DWYER:

So there is no question that we do raise some revenue from these measures however we also reinvest. So we raise $6 billion over the forward estimates but we reinvest $3 billion back into the superannuation system through these flexibility measures. Now Labor is not looking at this holistically they are going to disadvantage older Australians who want to make a contribution beyond the age of 65, right up until 75. They want to take advantage of concessional contributions without working necessarily, that’s $250,000 that someone can contribute over a ten year period and it’s going to be better for them.

GILBERT:

It sounds like you are not going to budge at all with what Labor has put forward on superannuation but you are willing to compromise with your own backbench.

MINISTER O’DWYER:

No, what we have said is that we will go through the ordinary process, that we always go through when it comes to legislation, that we will talk not only to our colleagues, we will talk to stakeholders, we will make sure that the legislation when it is brought before the Parliament doesn’t have any unintended consequences. There is nothing extraordinary in that, that is something that we do with all pieces of legislation and we will do that with the superannuation package.

GILBERT:

Can you get it through though because if Labor stands firm on what it has put, the Greens don’t budge then we see no reform to superannuation?

MINISTER O’DWYER:

Let’s take one day at a time, we will be consulting with both Labor and the Greens and the crossbench. We will consult with them around the superannuation package when the legislation is being brought forward. We want them to think of Australians and their retirement future and how we can make it more flexible but also a sustainable system that works for them.

GILBERT:

Just finally a dire warning on the spending front from the Treasurer this morning. It doesn’t go as far as the warning of the recession we had to have or a banana republic that sort of language that Paul Keating used in the past but it is pretty blunt today from him.

MINISTER O’DWYER:

He is being pretty blunt because you need to be very blunt. You need to be very upfront with the Australian people about the challenge that we face…

GILBERT:

And your own backbench?

MINISTER O’DWYER:

the economic challenge.

GILBERT:

This is as much to them as it is to the electorate?

MINISTER O’DWYER:

This is a message to the Australian community about the challenge and the task ahead about how important it is that this 45th Parliament works constructively together to repair the Budget and there are measures that we have brought in and that we are about to bring in in the first week of Parliament, Labor’s measures that they agreed to particular savings through the Omnibus Bill that we want them to agree to. Because it is something that they promised during the election and we simply want them to basically stand by that promise, the promise that they made to the Australian people.

GILBERT:

Minister for Revenue and Financial Services, Kelly O’Dwyer thank you for that.