Michelle Rowland (Greenway, Australian Labor Party) Share this | Hansard source

I am pleased to endorse the statement by the Treasurer this morning on tax reform and add my own comments in support. In doing so, I would like to focus on one critical area of tax reform and the economy—that is, superannuation reform. On Monday, with Minister Mark Butler, I hosted a forum 'A conversation about aged care' in Blacktown. The attendance there was phenomenal—the number of people who are nearing retirement age or beyond retirement age who are very concerned about not only their social wellbeing but also their retirement incomes. The importance of this cannot be underestimated. As the Treasurer mentioned in his remarks, one of the central thrusts of the tax review included saving for some of the gains and preparing for an increasingly ageing population by boosting superannuation and making concessions fairer. One of the announcements by the Treasurer following the tax forum was to examine potential reform for superannuation specifically during the drawdown phase.

As a government, we recognise the importance of longevity risk in the context of our retirement income strategy. We are committed to working with the industry leaders on this critical issue, as we have been to date, and identifying ways we can improve people's incomes after retirement and during the drawdown phase. We recognise that today a majority of Australians who reach retirement access their superannuation as a lump sum. Together with the superannuation industry, we need to encourage and remind people that there are benefits associated with the option of taking an income stream rather than a lump sum on retirement.

Without wanting to single out any superannuation providers in particular, on this occasion I want to mention Challenger as a great example of a life insurance company that recognises the importance of an attractive income stream for their products, such as annuities, available to Australians on retirement. I note that Jeremy Cooper, the architect of the Cooper review into superannuation and many of the proposals that feature in the government's stronger super reforms that were recently announced, is now driving some of these very important initiatives.

Ongoing reform of superannuation is not an option for Australia; it is essential. I note the transcript of session 4 of the tax forum, dealing with transfer payments and comments by Everald Compton, chair of the panel 'The economic potential of senior Australians', about how impressed he was that the Treasurer wanted a focus on the year 2050 and how Australia should be organised for the impact of our ageing population on our economy. These are the interesting statistics. Mr Compton noted that by this time—by 2050—the largest age segment of the population will be the age group between 85 years and 100 years and it will also be the fastest-developing segment of the population. So, in this context of the need to implement superannuation reform, I also note today the release of the latest Melbourne Mercer global pension index, which warns that, while Australia's retirement income system has climbed from fourth to second in the global comparison of pension income systems—that is recognising globally how well Australia performs in its retirement incomes policy compared to the rest of the world—we still require significant reform to help Australians secure sufficient retirement savings and to financially support this ageing population.

The report's author, Dr David Knox, commented that the best pension systems adopt what he refers to as a 'multipillar approach' to spread long-term risks between government, employers and individuals. His comments on this point are very enlightening:

Australia is very much in reach of becoming the first in the world to receive an A-Grade score—

in the index—

if we can address the issue of adequacy by raising the level of compulsory savings via superannuation and continue reforms to reduce costs …

For this reason, the government's policy is to lift the rate of superannuation from nine per cent to 12 per cent. That is why it is so important. In parliament this is an area where views are really at polar extremes. Everyone—the superannuation industry, workers, retirees, participants in the tax forum, independent modelling such as I just mentioned—accept and endorse the need to raise the rate of superannuation contributions from nine to 12 per cent. Everyone, that is, except the opposition. What hypocrisy. Those opposite enjoy parliamentary entitlements that far exceed the contribution currently enjoyed by most Australians. It is disgraceful how many of those opposite who were elected to government prior to 2004 enjoy defined benefits and notional contributions well in excess of the proposed 12 per cent, but they are so miserly, so politically motivated that they will not give workers the entitlements that they should be getting, an increase from nine to 12 per cent. They should hang their heads in shame. (Time expired)

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