House of Representatives

Second Reading Speech

Mr Morrison (Cook-Treasurer)

I move:

That this bill be now read a second time.

The Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill (No. 2) 2016 amends the Superannuation (Departing Australia Superannuation Payments Tax) Act 2007 to lower from 95 per cent to 65 per cent the rate of tax on superannuation payments applying to working holiday-makers after they leave Australia. As part of the government's working holiday-maker reform package, parliament previously agreed to amend the Superannuation (Departing Australia Superannuation Payments Tax Act) 2007 to increase to 95 per cent the rate of tax on superannuation payments to working holiday-makers after they leave Australia. That increase helped to ensure that the government's working holiday-maker reform package was fully offset. As a result of the negotiations with Senate crossbenchers and the Greens around the passage of the legislation to implement a 15 per cent tax rate on the income of working holiday-makers, the government has agreed to lower the rate of the departing Australia superannuation payments tax for working holiday-makers from 95 per cent to 65 per cent. The new rate of tax introduced by this bill will apply from 1 July 2017. The decision to lower the rate of the departing Australia superannuation payments tax for working holiday-makers from 95 per cent to 65 per cent is estimated as a cost of revenue of $55 million over the forward estimates. This change will lower the overall level of taxation that applies to working holiday-makers. It is part of the government's package to lower to 15 per cent the rate of tax applying to the income of working holiday-makers. This is a good outcome for working holiday-makers and the employers that rely on them as a valued source of seasonal labour. This measure, together with the other measures the government has agreed to, will be fully offset in the MYEFO, and full details of the measure are contained in the explanatory memorandum.