Thank you, Deputy Speaker. I understand and support the intention of this bill but there are problems with it that mean I will not be voting for it. I want to outline both why I support it, why I support the intention and why I can't vote for it in its current form. Superannuation tax concessions should be fair and reasonable. We need a superannuation framework that allows and incentivises Australians to set themselves up for a dignified retirement and reduced reliance on the aged pension. This is not only good for individuals, it is also good for the country. We need tax concessions to encourage contributions to superannuation and to compensate people for locking away their money for a long time. I understand the concerns that these concessions are currently being used beyond the purpose of a dignified retirement as a wealth management tool and when you hear that one person has $544 million in their superannuation account it is hard to see, hard to say that that is what is actually needed for a dignified retirement. I appreciate that beyond a certain level, and we can debate what that level is, tax concessions on superannuation effectively subsidise wealth accumulation. There are some things about the structure of this change that I do like. Under the change the higher tax rate of 30 per cent will only be paid on the proportion of balances that exceed $3 million so any part of your super balance that is less than $3 million will continue to only be taxed at the concessional rate of 15 per cent. The vast majority of people have less than $3 million in their super account, even in my relatively wealthy electorate of Curtin where our average super balance is double the national average. The average super balance is just over $500,000, even in the wealthiest suburb of Cottesloe and Peppermint Grove which is a six of the $3 million threshold. For balance under $3 million the effective tax rate paid by retirees is typically closer to seven or eight per cent when you include franking credits and capital gains tax discounts. It is my view that paying an effective tax rate of seven or eight per cent up to $3 million and a tax rate of 30 per cent for the part of your super over $3 million still creates a pretty strong incentive to contribute in the interests of the individual and the country. Now, the proposed change only affects 0.5 per cent of all Australians who have superannuation accounts so I want to be clear that this is a small number of people and they are probably going to be fine but I have some serious concerns about the structure of the change which makes it impractical and potentially unfair. Even if this does only affect a small number of people. As a matter of principle, we need to ensure the changes we make are consistent with common sense approaches and fairness. I have four main concerns with the bill and if these concerns were addressed I would support the bill. They are: taxing unrealised gains, double taxation, not indexing the threshold and there being no transition period. On taxing unrealised gains, this will create liquidity issues for taxpayers. It is unreasonable to expect taxpayers to fund the tax liability that relates to the appreciation of the value of an asset when they haven't sold the asset and received money with which to pay any tax liability. Even as far back as 1975 the tax review committee when considering the topic of taxation of capital gains commented that the impracticality of taxing capital gains as they accrue is universally recognised, the tax can only attempt to deal with realised gains. Now the taxing of unrealised capital gains leads to unacceptable problems in the periodic valuation of assets and generates severe liquidity difficulties for taxpayers as well as compliance costs. It would disproportionately impact self managed super fund holders and those with a large illiquid asset like farmers. Assets fluctuate in value and an asset that eventually gives rise to no gain may nonetheless have given rise to tax liability. The government's proposal would go against these long-standing principles of tax law that only realised capital gains are taxable. It will create an undesirable and inappropriate precedent for future tax proposals. It could also dis- incentivise investments in long-term assets, instead incentivising a short-term approach to reduce liquidity risk. The University of Adelaide analysis showed 13 per cent of self managed super fund holders would not have had adequate liquidity to cover this new liability if it had been introduced in 2020. A more workable alternative to taxing unrealised gains must be found to defer payment until the asset is sold or to calculate tax based on a self managed super fund's actual taxable income. I will be supporting amendments to this effect. If this issue is not addressed before the bill passes it will reflect very poorly on this government's financial nous and willingness to listen genuine and practical concerns. The intention of the bill can be achieved without taking on this ridiculous impracticality. My second, and related concern is that this bill creates a situation where people can be taxed twice. If the paper value of a property increases in one year under this bill, tax is payable on that unrealised gain. If the property is then sold in a future year, capital gains tax will be payable on the actual gain realised so you pay twice. It seems wrong that this could be the intention of the bill. Even worse, if the paper value of an asset increases and taxes paid on that unrealised gain then the value decreases before the asset is sold, it looks like the tax paid on the gain that was never realised cannot be recovered. I have submitted questions to the PBO about this scenario but in this busy budget week, haven't yet had this clarified. If this is the effect of the bill, I urge the government to address this unfair situation. Taxing twice on the same gain goes against fundamental principles of taxation and would be very disappointing. The next issue is the lack of indexation of the threshold. $3 million seems like a lot of superannuation today but $3 million in 2064 won't look like it does now. It has been submitted that for a 30-year-old today this cap is effectively more like a $1 million cap in today's dollars by the time they retire. Indexing these sorts of thresholds allows the intent of a policy to continue into the future instead of gradually ratcheting down the benefit of superannuation saving over time. Not indexing the $3 million dollar threshold has the potential to embed further intergenerational inequality. Younger people have a hard enough time as it is without disincentivising them to save for their retirement. The same issue arises with indexing almost any threshold including income tax brackets. Not indexing is a sneaky way of effectively changing the policy year by year. Setting this up properly from the outset would include safeguarding its intention into the future by indexing the threshold. The last issue relates to transition. I recognise that most people - 59,000 of the 80,000 nationally affected, are of retirement age so they can restructure their financial affairs before the change comes into effect in 2025 if they can find a more tax effective approach than the new rate of 30 per cent for the proportion of their balance that exceeds $3 million. People have made financial decisions based on the current tax treatment. Which they may not have made had they known that this change was coming. Because superannuation laws lock up people's own money, we need to be extremely cautious about making changes without permitting people to rearrange their affairs accordingly. Any change to superannuation makes the system less predictable and therefore dis- incentivises people from making voluntary contributions. Allowing a transition period would mean people could change their financial arrangements to prepare for this new set of rules. Everyone should be able to plan their financial affairs in light of the current regulatory environment rather than being caught out and unable to adjust. A number of constituents have contacted me with concerns about this change. For example, Michael says "my family and friends are up in arms about the super tax changes. Not because it hits super investors who have saved funds in super for up to 50 years with more tax but rather because it breaks an existing tax principle in taxing unrealised or paper gains that may never be realised. It will become a fee fest for accountants, lawyers and an army of time wasting valuers and advisers that will further reduce Australian productivity." I initially told constituents that I would support this change, subject to a number of issues being ironed out as part of the short consultation process. The failure of this government to listen to stakeholders and experts on this issue means we will end up with an impractical, complicated and unfair version of what could have been a perfectly acceptable policy. I have no problem with putting a cap on superannuation tax breaks above a certain level it has to be practical and fair. I am disappointed that these issues have not been resolved through the consultation process so as a result I will be supporting appropriate amendments and if they are not accepted I will not be supporting this bill.