Mr BAYLEY (Clark) – Deputy Speaker, I rise to give my comments on the Superannuation Liability GST Windfall Fund Bill 2025. As we heard from the Treasurer, this bill effectively does two things: it establishes a superannuation liability fund that can only be used to offset the unfunded superannuation liability; and, second, it mandates that 50 per cent of GST windfall be paid into that fund and it is silent, irrespective of status off the budget. Whether the budget is in surplus or whether the budget is in deficit, it mandates those windfall be paid in there.
We fundamentally consider that a superannuation liability fund that is firewalled for the purposes of the unfunded superannuation liability has merit and we are prepared to support aspects of the bill. But, as I will detail, we have some amendments and some thoughts.
I want to echo some of the words of the opposition treasury spokesperson to say that this is deeply political. This was announced, I think, just three days out from the election on 20 March 2024. The headline is a strong plan to fix Labor’s unfunded super liability. We should not be under any illusions as to where this strategy is coming from and what it is trying to do.
I want to make the point that the size and the scale of the unfunded liability burden is not simply Labor’s fault for ‘raiding’ the fund that was previously established. I want to make the point here and now that it is bigger than it needs to be because this government, the Liberal Government, in 2017 assumed responsibility for $103 million of Forestry Tasmania’s superannuation liability debt. Whereby a GBE should have been providing for its obligations to its retired employees, they did not. They repeatedly did not. This government, in another effectively underhand strategy for Forestry Tasmania, assumed liability for that obligation.
Treasurer, it is not all Labor’s fault, you yourselves have assumed some of this liability by absorbing what that company or that GBE should have been providing for. Of course, it is a loss making venture and so over consecutive years it simply was unable to meet its obligations.
I want to come now to the fact that, while we are in principle support the notion of a superannuation liability fund and it has some merit, we are deeply concerned. We are not persuaded that the mandated 50 per cent of a GST windfall be paid into this account is sound fiscal policy. It sounds good. It sounds logical and it sounds sensible and prudent, as the Treasurer has asked us to believe, but there are some hooks, there are some catches on it. We understand from our briefing, and perhaps Treasurer, you could confirm this, and I ask you to confirm this for the benefit of the House and for the Hansard, that there has been no assessment of the impact of such policy on the budget bottom line. This comes from an election policy and not expert advice.
What I mean by that is, have you done an analysis about whether the GST windfall or 50 per cent of the GST windfall in any one year is better off being put into a superannuation fund and paying down the superannuation liability than it is actually paying down debt or funding normal spending.
The Greens’ initial reading on this legislation was that in circumstances where the budget is running in a deficit, the allocation of a GST windfall into a fund would effectively require the borrowing of additional funds in equal measure in order to fund budget items. While on one hand we are paying into this fund, on the other we have to borrow and this means that the net impact on the budget would depend on comparing any interest accrued in the liability fund to the debt repayments associated with the additional borrowing. Treasurer, I would really appreciate your clarity on whether some modelling was done on the benefits of this to the budget bottom line.
Assuming the government, as we were informed in the briefing, has not conducted any assessments of this, much less provided evidence to the House, we are concerned that the bill would have a negative impact on the budget bottom line. We have also sought some external advice on this proposition, which has confirmed our concerns and specifically we were advised that payments in such a fund would only make sense when the state was running a cash surplus. In fact, the person we spoke to who is an eminent economist that we all know and quite often quote said this was a gimmick. Unless we are running a cash surplus, this fund is a gimmick and it is clearly a political gimmick. While we support the notion of this fund, we think it can be cleaned up to make sure that it is not a gimmick and it is a genuine fund that helps the budget.
Saul Eslake’s independent review of Tasmania’s finances recommended investing for the purposes of defraying the unfunded superannuation liability, specifically when there is a cash surplus. Implicit in that recommendation, in my mind, is that when we run a cash deficit, as we are doing repeatedly and as there is no genuine pathway to surplus in the near future, this kind of fund and this kind of mandated payment of any GST windfall into this fund would be a net detriment to the budget.
Saul Eslake’s report also notes that other state strategies for unfunded superannuation liabilities involve investing only when there is a cash surplus. On this basis, we do not support the bill as it currently stands. It is not well thought through. It is political and the evidence we have received points to this being bad fiscal policy and the government has not done the work to indicate otherwise.
We are willing to support a superannuation liability fund. On this basis, as has been distributed to all members, it is our intention to move to have the bill withdrawn and redraft it to remove the provisions relating to the GST wind fall. We are prepared to give the government the opportunity in the first crack at reconsidering this in a really considered way with the assistance of OPC to make it more beneficial and clearer and to be a net positive from a budgetary perspective.
Should this motion not proceed again, I have distributed the amendments and we intend to move to restrict the fund and restrict the mandated investment of GST windfall to circumstances where the general government sector is running a cash surplus. With our amendments passed, we would support the bill, otherwise we intend to vote against it.
To foreshadow the amendments, hopefully we won’t get there because hopefully the amendment to withdraw the bill and have it redrafted will pass. We have three amendments and all serve to restrict the mandated investment of a GST windfall to circumstances where the general government sector is running a cash surplus.
Our first amendment introduces a definition of a cash surplus and relocates the current definition of budget papers from Clause 4 to Clause 3.
Our second amendment removes this definition of budget papers from Clause 3.
DEPUTY SPEAKER – Mr Bayley, could you distribute those amendments?
Mr BAYLEY – I can distribute these amendments, but I am not moving these amendments at the moment.
Mr Barnett – You said you wanted it withdrawn.
Mr BAYLEY – I am just foreshadowing of the amendments we would move if it was not withdrawn.
Our second amendment would remove the definition of budget papers from Clause 3. This is because the definitions contained in Clause 4 only applied to that clause, and our definition of the cash surplus in Clause 3 refers to budget papers. The effect of this is to ensure the definition of budget papers applies to the whole act, not just Clause 4. A third amendment would amend Clause 5
I can see the Clerks talking to the Speaker. Let me start with moving the amendment that is pursuant to Standing Order 194. I move ‑
That all the words after ‘that’ be omitted and the following words inserted –
The Bill be withdrawn and redrafted to remove provisions that require a GST windfall to be paid into the Superannuation Liability Fund.
To speak to that amendment, I have obviously already spoken about it, but clearly we are concerned about the fact that this mandated GST windfall gets paid into this fund irrespective of the health of the budget, whether it is a deficit or a surplus. As we have been advised externally and as we suspected, it would only be guaranteed to be beneficial from a budgetary perspective if we were running a cash surplus. We have not run a cash surplus for some time. We are not expected to run a cash surplus. We do not expect us to run a cash surplus anytime soon, so this is really important.
Instead of moving our amendments in the committee stage if this fails, which I think is less ideal, this amendment to withdraw the bill gives the government the opportunity to, in a really considered way with its treasury officials, with OPC to consider what I am putting here to get and to seek external advice and to make and to make sure that this fund is not indeed just a gimmick to put some political heat on the Labor Party, but it actually serves the interests of Tasmania. It serves the interests of the budget, and it is indeed sound fiscal strategy.
On that, I urge members to support the amendment, give the government a second chance to actually take this away, remove the politics and make sure that it is guaranteed to act in the interests of Tasmanians and the budget.
