[Mr Speaker] 

In September this year, I was privileged to be invited to participate in a panel run by the Super Members’ Council  

• to discuss the Low Income Superannuation Tax Offset.  

It was an excellent event, with a sterling line-up of talented women. Panellists included  

• Georgia Brumby, the Deputy CEO of the Super Member’s Council,  

• Jo Kowalczyk (Ko-val-cheque), the CEO of Women in Super and  

• Georgie Dent, CEO of the Parenthood.  

Collectively, these women have worked for years to make the everyday lives of Australian women, better.  

The topic for discussion on the day was the subject of this very motion – the need to reform the low income superannuation tax offset, or LISTO.  

The LISTO was introduced in 2012, and provided a payment of $500 into super for people earning less than $37,000 a year.  

It was designed to ensure that low-income earners don't pay more tax on their super contributions, than on their take-home pay. 

The problem was that it had not changed since its 2012 introduction. 

• The income threshold of $37,000 was out of date, and 

• the amount of the payment itself had been devalued as a result of not keeping up with inflation.  

With 63% of the people benefitting from LISTO being women,  

• the panel I was sitting on  

• was in firm agreement that it needed an update.  

And so I was very pleased when the Treasurer announced in October that the government had listened, and would be  

• increasing both the amount of the LISTO, and  

• the threshold for eligibility, 

• in line with what the experts and the industry had been calling for.  

I was equally pleased to see the way in which the government proposed to fund the changes to the LISTO.  

The LISTO changes, it was announced, would be paid for by tweaking the government’s proposal to reduce tax concessions on earnings in superannuation accounts with balances over $3 million.  

Tax reform is another topic entirely, and one which – although needed – successive governments have shied away from.  

I welcomed the announcement during the last term that the government planned to reduce tax concessions on earnings on super balances above $3 million, but held concerns about some of the finer details of that proposal.  

The first area of concern was that the $3m threshold for the changes to the tax concession, would not be indexed.  

The LISTO is a perfect example of a situation where tax policy that is not indexed will soon become unfit for purpose. 

Within 13 years of the introduction of the LISTO (and some would say sooner than that), the LISTO was not operating as it was intended and the $37,000 threshold for eligibility for the additional superannuation payment, needed updating.  

In the last term, in arguing against the need to index the $3m threshold for the super tax changes, the government said that unindexed amounts are regularly included in legislation, and that it’s simple to amend it when necessary. The crossbench’s counter argument was that it would not only be simpler to index the amount from the outset, it would ensure the legislation remained fit for purpose: year in, year out.  

The LISTO thresholds demonstrate the force of this argument. It has taken 13 years and much advocacy from civil society to achieve legislative change to the LISTO thresholds to make them work as intended in 2025.  

LISTO recipients –  

• Mainly women, and  

• those who work in low paid, often shift, or part-time, casual work,  

• such as in the care industry 

• would have received a greater benefit, for longer, with indexing.  

So it will be, for taxpayers affected by the changes to superannuation tax concessions for balances $3m and over. They will not have to start paying more tax sooner, because the threshold will be indexed.  

The second area of concern about the superannuation tax concession changes was that the changes would apply to unrealised capital gains. That was going to hurt farmers and small businesses who – quite legitimately and compliantly – often hold large assets inside their superannuation and would have been faced with a tax bill on those assets, which they did not intend to liquidate during the year tax became payable. 

Again, the government listened to that concern (raised squarely by the independents on the crossbench during the debate on the legislation) and have decided the tax should not apply to unrealised capital gains.  

These LISTO changes are necessary and overdue. The retirement savings of Australians on low incomes will be boosted. The burden on government during those people’s retirements will be reduced. It’s a positive change which I welcome.