Bernie Ripoll (Oxley, Australian Labor Party) Share this | Hansard source

$1.1 trillion, I am now informed. This must have changed overnight. It is good to see that, even during a global financial crisis, people’s retirement savings are not only safe but growing. It is important to acknowledge that these are difficult times for people. Superannuation itself will this year be a very difficult and concerning subject for many people who are about to retire or will retire in the next 18 months or two years, because they would have seen either negative returns or significantly reduced returns in their retirement savings. I know how concerned they would be. It has affected my family as much as anybody else’s family around the country, with my own parents and parents-in-law affected, although I will not get into the detail of their circumstances. Certainly it has meant that things will be a lot tougher this year. But they can at least rest assured of a number of things. One is that they have a good government right now in the Rudd Labor government. We are taking every necessary step to ensure that we maintain a strong economy, that we protect the surplus and that, where we do spend the surplus, we spend it on them and make sure that they have a government that will keep the economy strong. They can also rest assured that it was we in the first place who put the mechanisms in place to make sure they had that.

I know and understand, as do many people—although it may be hard to acknowledge when things go south a little bit—that the previous years around the world have been pretty good for superannuation and retirement savings, and people have seen massive increases in the value of their holdings. So, while it is very regrettable, I know that in Australia we will do everything we can to manage that and ensure that people’s savings are protected, as we have done through a range of mechanisms. They should have confidence that we will be there for them.

The bills before us make some very specific changes to the way we treat people’s superannuation savings when they are temporary residents in Australia. It is quite a common occurrence that people who work here for a period of time, because of the superannuation guarantee, have employer contributions and perhaps their own contributions—although I very much doubt that if they understand the system—go into an account. When they depart and go back home, there are systems in place whereby they can then retrieve the amount of super that was placed in their account. They are not permanent residents of Australia—they are not going to live here or enjoy their retirement here—so there is no need as such for their superannuation to be kept here in Australia. I think that, for a lot of people, superannuation is a case of out of sight, out of mind. For people who are young and mobile, whether it is Australians or temporary residents who are here on a particular work assignment, it probably is not such an issue.

We are moving to take care of what is a growing problem in Australia. The Australian Tax Office has said in its annual report that the number of superannuation accounts reported on the lost members register grew from 5.7 million to 6.1 million in that income year. That is not a dollar amount; that is the actual number of accounts. It is a massive number. You have to look at it twice to fully grasp that we are not talking about dollars. It actually represents a much larger amount in dollars. I have got to say, I had to read this one not twice but three times to be sure that it was the right amount. There is $12 billion sitting in lost superannuation accounts. Potentially, a significant slice of that $12 billion belongs to people who are no longer in Australia or to temporary residents who worked here. It is their entitlement and they can claim it under our scheme at any time, if they have not already done so. We are putting into place specific changes to deal with some of that. It also means that we have a lot of work to do. We have been doing a lot of work trying to reconnect working Australians with their lost superannuation, because that is important to do. It is about their retirement savings and it is about trying to give them some efficiency by collecting in one place their superannuation dollars, their money, to make sure they have the best possible growth and the best possible access to that money in future years.

But it poses a conundrum for government. That is a bit of a bottom line. When you have $12 billion of money sitting in lost accounts, you have a bit of a problem that needs to be dealt with. The measures that we are implementing will transfer to the Commonwealth under the unclaimed money arrangements the superannuation of those temporary residents where this money has not been claimed. Where that money from temporary residents has not been claimed, there will be a transfer across. We need to put it in a specific place and that is what we are doing. The superannuation will be transferred six months after the relevant visa has expired and the temporary resident has left Australia. It is important to note that temporary residents will continue to be able to claim—and I mentioned this before, but I think it is important to repeat it—their superannuation when they leave Australia by paying the relevant withholding tax. It is important that they understand that they can claim it, but they need to pay their withholding tax. Former temporary residents who have had their superannuation transferred to the Commonwealth under these new arrangements will also be able to claim back the money at any time, and the same rules will apply. The idea is not to steal this money or forgo it but to make sure that it is properly collected, administered and arranged in a manner which means that people still have access to it. I am certain, given the number of unclaimed accounts—we are talking about around six million of those accounts and $12 billion worth of assets—that we are not going to be successful in this in its entirety.

These measures are designed to assist with slowing the rapid growth in the number of lost accounts. For government this is an administrative nightmare. This is a massive, inordinate amount of accounts. We need to take every step available to us to minimise that number. Many of those are in respect of former temporary residents in Australia. I do not know that my words will reach them, either here tonight or in the Hansard—unless some good media person decides that my speech tonight deserves to be on the front page of the newspaper. I doubt that very much, but perhaps they could find it in their hearts just to send out the signal—not for my self-gratification but for the people who have lost accounts—that those people ought to claim their accounts, wherever they live in Australia. And, if they got that message, it would ease the burden on government of trying to administer these many lost accounts.

That would be consistent with the way we treat Australian citizens. We are doing this in a properly considered manner. We ought to treat those people who make a contribution to our country by coming here temporarily to add value to our economy in the same way that we expect Australian citizens to be treated. They do that by working here. They have obviously been invited here to work and we should support them in that because of what they have done for us. We expect that Australian citizens working overseas would enjoy similar benefits and standards and be accorded the same sorts of comforts. There will always be our New Zealand friends, colleagues and comrades over here in Australia, and I just want to let them know that they, along with Australian citizens and retirement visa holders, are excluded from these new arrangements.

In addition, the DASP rates are being increased by five percentage points to recover the tax concessions that were provided to support the retirement of Australian citizens in this country. This is another good solid measure which not only deals with the significant administrative issue that we face as a government—properly dealing with the issues that superannuants face as temporary residents when they leave—but also gives back to Australian citizens and properly recompenses them for the efforts they make in their own retirement savings. This measure, as you would expect, has had political consensus since the policy was first announced. There are some slight differences between what was first announced and what is in place now, but I believe the consensus remains—unless there are voices that say that is not correct. No, there are no voices that say that is not correct. There is a consensus. This is noncontroversial. This is good policy.

This legislation is another strong example of good government and good governance. It is a good, strong example of the Rudd Labor government actually doing what it was elected to do. We are the builders of national savings and retirement savings through superannuation. We have always believed that it is a key platform that we deliver not only to individual workers but to families, to the economy, to the nation. We will continue to build on that, to maintain that and to ensure its integrity in coming years. This is a good bill. As I said, this is a bill that I believe is supported with great consensus right across this chamber and across the community. I commend the bill to the House.

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