Mr TONY SMITH (Casey) (11:51): It is a pleasure to speak on the Tax and Superannuation Law Amendment (2014 Measures No. 7) Bill 2014. It is a regular bill that comes before the House and, as previous speakers have said, it has seven schedules. I will focus my remarks on five of those schedules. Schedule 7, being the last schedule, deals as it always does with technical amendments and fixes that are required constantly to our tax and superannuation laws. Schedule 6 deals with the exploration development initiative and that is a major initiative in this bill. I will not address that issue, for reasons of time, but I am very confident that my friend and colleague the member for O'Connor, who is following me in this debate, will address that matter in great detail.
The first five schedules deal with some important legislative issues, and I will briefly deal with schedules 2, 3, 4 and 5. Schedule 2 transfers, importantly, the complaints handling and general tax review functions for individuals from the Commonwealth Ombudsman to the Inspector-General of Taxation. As the then parliamentary secretary to the Treasurer, the member for Moncrieff, made clear at the end of last year when he introduced this legislation, the Inspector-General of Taxation, being the independent statutory office that reviews systemic tax administration issues and reports to the government with recommendations for improvement for the benefit of all taxpayers, will now be the body for taxpayers. These changes, which were announced in the last budget and are being legislated in this bill, will provide taxpayers with a single specialised scrutiny agency for the handling of both individual tax complaints and systemic tax reviews. That is an important step forward.
Schedule 3 deals with capital gains tax exemption for compensation and insurance. In brief, the schedule confirms the existing administrative arrangements. As is the case with so many schedules in these bills, it gives certainty where a grey area has arisen. Schedule 4 again provides certainty for superannuation fund mergers, to make it clear that a tax integrity rule will not be triggered when a member's super benefits are involuntarily transferred from one fund to another as a result of a merger between the funds. As some previous speakers this morning have outlined, schedule 5 is a measure that amends the law to clarify the ATO's ability to share protected taxpayer information with Commonwealth, state and territory law enforcement agencies concerning proceeds of crime orders. Again, this schedule is designed to remove any doubt about the ATO's ability to share protected information with law enforcement agencies.
In conclusion I will turn to schedule 1, which deals with the fairer taxation of excess non-concessional contributions. I will not go as far as the previous speaker, the member for Moreton—to give a long history of superannuation in Australia; I will seek to confine myself to the subject of this schedule. I will, however, make one comment on the member for Moreton's contribution. In his long history of superannuation in Australia, he mentioned the superannuation surcharge that was introduced by the former Howard government. There is an interesting anecdote on superannuation. When that surcharge was introduced by the Howard government, Labor opposed its introduction and, when it was abolished by the Howard government, Labor opposed its abolition, which is a bit of a window into how Labor has approached some of the superannuation issues in recent years—and schedule 1 is a case in point. This is a critical schedule to correct some of Labor's failure that was very obvious during the last parliament.
Schedule 1 will introduce some fairness to the taxation of excess non-concessional contributions—contributions that are made from an individual's after-tax money. As the then parliamentary secretary made clear back in the first week of December last year, the bill will introduce some much needed fairness. Indeed, through the last parliament we repeatedly called on Labor to do something and we pledged that, if they did not, we would upon government. This schedule does just that. It is important to give some tax fairness to those who inadvertently breach those caps. The current treatment of non-concessional contribution caps can be punitive. The overall tax rate that has applied to some of the breaches has been as high as 93 per cent. So the change that the government is introducing through this schedule to the bill will allow people the option of withdrawing these excess contributions and any associated earnings, with the earnings taxed at the individual's marginal tax rate.
Other speakers have gone into great detail about the purpose and the benefits of this particular schedule. I am very glad that we are legislating this now. It was a glaring problem that, unfortunately, Labor did nothing about during the last parliament. But it is being rectified in this parliament. I noticed the member for Moreton says that it has bipartisan support. That is good to hear, but it should have been something that was fixed a few years back. I will leave my remarks at that. I know the member for O'Connor is keen to follow me with his contribution, particularly on schedule 6 of this bill.