Bill Shorten (Maribyrnong, Australian Labor Party, Parliamentary Secretary for Disabilities and Children's Services) Share this | Hansard source

I rise to support the Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2008. I believe it is long overdue. I am pleased that the coalition is supporting it, although I suspect the tenor of my speech will be not one which the coalition can support—but I should not get ahead of myself.

The main purpose of this bill is to make changes to the Superannuation Act 1976 and some other 30 acts in respect of changes to the superannuation guarantee requirements from 1 July 2008, requiring employers to use ordinary time earnings as the earnings base for an employee when calculating superannuation guarantee obligations. These changes are intended to ensure that the benefits provided under those acts will continue to be sufficient to satisfy an employer’s superannuation guarantee obligations in respect of employees who have entitlements under those acts.

Prior to this, employers could use a number of different bases for calculating nine per cent superannuation guarantee payments. For example, the superannuation salary in an award was one method of calculating entitlements. Superannuation salary often did not include allowances, over-award payments, shift loadings and commissions. But ordinary time earnings include all of these things—but do not, I must add, with certain exceptions, include overtime automatically. As the House would know, the minimum super amount that you have to pay is nine per cent of each eligible employee’s earnings base. An employee’s earnings base is generally their ordinary time earnings. From 1 July 2008, ordinary time earnings should always be used.

Some employers currently pay superannuation on an earnings base that existed before the superannuation guarantee was introduced. This has meant, historically, two employees in similar circumstances could receive different superannuation guarantee amounts. The new law standardises upwards the earnings base to ordinary time earnings for all employees, so employees in similar circumstances doing the same work receive the same contributions. This measure, in my opinion, will add certainty and consistency, and should be applauded. When I was a union official we struggled for better superannuation, and I believe this legislation is another part of Labor’s commitment to ensuring a fair go all round for working Australians.

I would like to note Senator Andrew Murray’s comments in the Senate, where he sought to amend this bill. Senator Murray’s amendment concerned the equal treatment of same-sex couples under superannuation laws, and he correctly wanted to remove discrimination. He appeared, from his speech, to believe that, because the previous Howard government never acted to change this state of affairs, despite pledging to do so, the current Labor government would follow their lead. He said in the Senate chamber:

The coalition I think needs to stand up and say to the Labor government, both in the Senate and in the House: ‘Come clean. When are you going to fix this problem?’ You now have this HREOC report and the question is not what you are going to do about it, because you have said you are going to fix it, but when you are going to fix it. I will put to the minister again for the record the main question he must answer if he rejects the very well crafted amendment that I have circulated, which is: when will you act to rectify this deplorable and highly inconsistent treatment of superannuation for de facto and interdependent partnerships?

The senator should now be satisfied on a number of fronts. First, as you are well aware, the government has introduced the Same-Sex Relationships (Equal Treatment in Commonwealth Laws—Superannuation) Bill 2008. This change, which has been enacted by the Rudd government, is historic, welcome and a long-overdue correction of discrimination against citizens on the basis of their sexuality.

Senator Murray should also note that the Rudd government cannot be compared to the previous government. We have no core and non-core promises. We made commitments before the election, and we are implementing them. It is easy to understand why an honourable man such as Senator Murray may have been habituated by 11½ long years of the Howard do-nothing government to accept the dissembling, the dodging and the downright untruthfulness as the norm of government in Australia. I hope that, in his remaining time in this place, he sees that not all governments are alike and that the current government—the Rudd government—is many, many cuts above what has gone before.

I have also noted the comments of Senator the Hon. George Brandis in supporting this bill. Senator Brandis claimed that the former Howard government was the great reform government in Australia’s history when it came to superannuation policy, but even he would be hard-pressed to call his party the party of superannuation reform, because it never has been and it certainly is not. I think everyone will agree and recall that the true reformer in superannuation, just as in welfare, is the Labor Party.

It was the Hawke-Keating Labor government, ably assisted and working with Bill Kelty and the Australian Council of Trade Unions, which revolutionised the superannuation system—and thank goodness they did—providing us with a $1 trillion plus savings sector in Australia. They introduced the superannuation guarantee charge, requiring employers for the first time to make private contributions to employees’ superannuation to protect workers from poverty. It is a comprehensive system that makes financial security something for all Australians, not just those who can afford it. This is reform; it is not tinkering around the edges.

When the Hawke-Keating government was enacting its changes the Liberal opposition fiercely opposed the measure, as they have every time that Labor has sought to increase the contributions from three to nine per cent. This has been very short-sighted policy, which thankfully was defeated at the time. All Australians now are the beneficiaries of the Hawke-Keating government’s commitment on superannuation.

One very good thing to come out of the changes of the Hawke-Keating era in superannuation was industry super funds, which today look after the superannuation needs of more than five million hardworking Australians. Prior to entering this place I was fortunate to be able to serve as a director on a range of superannuation and investment funds for up to a decade, so I read with real interest the research released by APRA last month on superannuation fund governance. It compared a number of governance activities of funds across different sectors. The not-for-profit part of the industry, the industry fund part, came out much better I believe than retail funds.

Here are some comparisons of note. Industry fund directors spent an average of 1,364 hours per year on their fund work and retail fund directors, according to APRA, spent 559 hours on theirs. The primary employer of 58 per cent of retail fund board directors is a fund service provider or the actual current fund. This applies to only four per cent of industry fund directors. Another finding I found very telling is that, while only 21 per cent of retail fund directors are actually members of the fund that they are a director of, 62 per cent of industry fund directors are members of theirs—taking an active interest in what goes on.

I look forward to APRA’s next report, which will consider if there is a link between governance and investment performance. Members would be aware that the performance of industry funds has for over a decade been superior to that of the retail for-profit sector. It is apparent, I am sure, that I believe that industry funds have been excellent performers for their members. I certainly believe that they have been better for workers, as they charge lower fees than the average retail fund and pay no commission to advisers and financial planners. Industry funds—part of the superannuation reforms of which this legislation is another strand—benefit their members. I am proud that they have emerged from the stable of Labor reform in superannuation.

Labor has always been the party which truly cares for and supports Australian workers and families. No amount of Johnny-come-lately revisionism from the opposition can change that. I commend this bill to the House.

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