Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

I rise today to speak on the Governance of Australian Government Superannuation Schemes Legislation Amendment Bill 2015. The bill, with a catchy title like that, merges ComSuper into the Commonwealth Superannuation Corporation, the CSC. The result is that most government and military employees will have their super administered by the same government agency that manages their superannuation investments.

Before I turn to the very specific elements of the bill, it is worth providing some context. Labor, this side of the House, has a proud history when it comes to superannuation reform. The Labour movement was one of the key proponents of the first super funds over 100 years ago, and we remain the main proponent and advocate of superannuation today. More than two decades ago Labor was the party that created universal super so that all employees could benefit from investments in their own retirement. Last term, Labor was the party that introduced legislation to increase the superannuation guarantee, and this year our party is seeking to reform super tax concessions to make the system fairer and more sustainable.

Along the way, at every point, the coalition has stood in the way of better super. The Prime Minister himself said in 1995:

Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.

And now he has frozen the superannuation guarantee. He has abolished the low-income super contribution and in the process has made superannuation less fair and less sustainable. I read a piece not too long ago that said that the sum total of the changes being made by the Abbott government will see $128 billion less in the superannuation pool by 2025. So, when we come to debate this bill we do so in knowledge that Labor is the party—the only party—that fights for super and fights for better retirement incomes in middle Australia.

On the specifics of the bill, superannuation funds operated by the government are among the largest in our super system. Currently we have two major agencies with responsibility for government super: ComSuper and CSC. ComSuper performs the administrative role for most super schemes for ADF members and government employees. These schemes are among the largest and most complex occupational super schemes in Australia. There is a combined membership of over 700,000 contributors, pensioners and preserved-benefits members. ComSuper employs 482 staff, all of them in here in the national capital. These staff help members with things like collection of member contributions and maintenance of member accounts, payment of lump sum and pension benefits, member communications, accounting services, dispute resolution, and secretariat support functions.

The Commonwealth Superannuation Corporation is a corporate Commonwealth entity and the trustee of most government and Defence super schemes and retirement income streams. It is responsible for investments and products for members. The fund has something like $32.7 billion under management at 30 June 2014. It pays pensions to more than 200,000 retirees.    The CSC itself was formed by a merger of three previous Commonwealth super trustee bodies. It is regulated by ASIC and APRA, with a board consisting of an independent chairperson, three directors appointed by the ACTU, two directors appointed by the Defence Force and another five appointed by the finance minister. Because these two agencies both deal with the super of the same 700,000 people, there is considerable overlap in their activities.

Both sides of the House are interested in reducing duplication and finding sensible efficiencies within the Commonwealth Public Service. So this bill will merge ComSuper's activities and powers into the CSC. This means that the CSC will take over all active administration activities, including collection of contributions, payments, communications and dispute resolution.    This requires CSC to perform financial functions on behalf of the Commonwealth, so this bill includes provisions to legally enable CSC to perform these functions. The minister will retain the right to make instruments in relation to these functions. The merger is expected to deliver savings of $½ million per annum in total.

This reduced duplication and greater efficiency is good in principle. In practice, the opposition has some concerns about aspects of the bill. The first one is that if ComSuper is abolished then most existing employees will be transferred to the CSC. Because of job duplication, approximately 70 of the 400 employees of ComSuper are expected to be offered voluntary redundancies.    The major concern is that staff at ComSuper who are currently part of the Australian Public Service will become non-APS employees in the merger. While staff will maintain most of their terms and conditions in the transfer, the CPSU has raised some concerns about it. ComSuper staff are worried that they would no longer be able to transfer at level to other APS agencies and to win promotions to other APS agencies. They are also concerned about losing redundancy rights that would allow them to be redeployed in the APS if their positions are cut. That is why Labor intends to move amendments in the Senate to protect ComSuper employees from these changes. We want to protect these employees who would otherwise face future job uncertainty. Our amendments enable transferred ComSuper employees to move from the CSC to an APS agency as if they were still an APS employee. Our amendments will apply for a period of three years. We do this because we acknowledge that this is the single largest transfer of employees out of the APS since the Australian Protective Service was moved. There is no reason why efficiency and savings goals cannot co-exist with dignity and fairness for the employees involved.

The bill also makes some changes to the administration fees of the Public Sector Superannuation Accumulation Plan, or PSSAp. As it stands, members of PSSAp do not pay fund administration fees. These fees are paid through a levy on government agencies, costing the government an estimated $26.8 million over the forward estimates. At the same time, employees in most other industries do pay administration fees. The bill amends the PSSAp so that the cost of administering the fund will be deducted from member accounts. Based on current costs, this is expected to be around $52.50 per member per year. These minor fees will bring the fund into line with other private funds and save the budget around $26.8 million. Labor has indicated that we will not stand in the way of these changes.

Both sides of the House are interested in improving efficiency in the Public Service so that taxpayers get the best value for their tax dollar. But this goal is not incompatible with maintaining fairness for affected employees in these schemes. Labor will move amendments to this bill which will ensure that affected ComSuper employees will not get a rough go from the merger into the CSC.    We are interested in budget savings and greater efficiency so we will be supporting the other measures contained in the bill. The government and the opposition have some vast differences when it comes to superannuation policy but we will be supporting the specifics of this bill.

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