Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

Labor's position is to oppose the Superannuation Legislation Amendment (Trustee Governance) Bill 2015, as previous opposition speakers have noted. The government is proposing to end more than two decades of successful joint governance by employer and employee nominated fund directors and instead force boards to take on both an independent chair and one-third independent directors. It is passing strange that a so-called liberal party is seeking to mandate how independent investment funds structure their activity, and it is clear, as I will outline in my speech, that the effect of the government's proposals would be to increase administrative costs for funds and thereby drive down member returns. Perhaps we should not be surprised that a so-called liberal party that opposes the use of markets in tackling climate change is again wanting additional red tape when it comes to Australia's superannuation funds. The Mckell Institute has nicely summarised the government's bizarre motivations on the issue by asking: 'When a system is working better than the alternative, why tamper with it?' Alas, I am concerned that this is being driven by ideology and not by evidence.

The superannuation industry now has assets valued at $1.6 trillion, set to increase over the coming decades. The 2010 Super System Review, the Cooper review, estimated that Australian superannuation savings will exceed $6 trillion by 2035. The number of Australians 65 and over seeking to access their retirement savings is expected to double by mid-century. That pool of savings has been important. We have compulsory superannuation because of two benefits that superannuation savings bring to the rest of the community. One is reduced reliance on the age pension. The second is that having a large pool of domestic savings can have benefits for the national economy at times when access to overseas funds is limited. We saw this in the global financial crisis, when Australia's pool of superannuation funds was important for ensuring that certain loan markets did not dry up.

So it is appropriate that we provide some tax concessions to the superannuation sector, although, as Labor has argued, those superannuation tax concessions, in our view, are neither fair nor sustainable. But it is absolutely important that we get our superannuation governance settings right, and it is vital that we are guided in this by evidence and not by ideology. The evidence is clear. The studies show that having more independent directors on boards does not automatically lead to better results.

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