Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

As I was saying earlier to the member for Whitlam, I had to say some nice things about him earlier; I might have to retract some of those. It's interesting, once again, to listen to his contribution. He seems to forget that his side of politics—those opposite—went to the last election with a proposal for $387 billion of new taxes across the Australian economy. That is a very convenient oversight by the member for Whitlam, and it behoves us to continue to remind the Australian people, each and every day, that those opposite proposed to hit our economy with the sledgehammer of $387 billion of new taxes. Towards the end of his contribution, he did properly recognise that the policy that we took to the election around superannuation hasn't changed. It is what it is.

The bill before us today, the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019, is about ensuring that Australians have choice with regard to their superannuation. The bill amends the Superannuation Guarantee (Administration) Act to give Australians employed under industry awards or enterprise bargaining agreements the choice, from 1 July 2020, to nominate their own superannuation fund. As I discussed in my earlier contribution on the previous bill to do with super, this is about ensuring that we minimise the risk of Australians having multiple superannuation accounts. Given the importance of compulsory superannuation contributions to Australians' retirement incomes, they—and only they—should be able to decide where their money is invested. Yet there are still around 20 per cent of workers who can't make that simple choice because their 9½ per cent super guarantee must be paid to a fund listed in their award agreement under some industrial laws.

I remember hearing, when we had this debate a couple of years ago, the story of a gentleman from, I think, Perth who actually went to court to try and have his super put into a different super fund from what was mandated in the award, and he was unable to do so. So this legislation is very timely and very appropriate. It is about the capacity of Australian people to maximise their superannuation savings and ensure they're not diminished. Very often this occurs for young people who might have a variety of different jobs, those on lower incomes who have small amounts going into super under our current superannuation system or those who have changed jobs over the course of the years and might have a variety of funds. Prior to being in this place when I had a financial services business, I remember at one stage having a potential client come to me who had eight different super funds. It took us nine months to work through those various super funds to get them amalgamated into a single fund so that they could then fully see what they had in their super.

That is why we need this bill and the previous one that we spoke about today: to give all Australians the ability to choose their fund, to protect young and casual workers employed under specific agreements from being pushed into having multiple, often underperforming, funds because of outdated laws. This bill is for the retail employees working at our local Coles stores, like the ones at Ormeau and Park Ridge; the truckies transporting stock to our local businesses; the nurses and midwives working at Logan Hospital; teachers at Windaroo State School or Boronia Heights State School; and the two million Australians employed under enterprise agreements. Currently employees in the aforementioned and other sectors have their superannuation guarantee paid into employer nominated funds instead of funds of their own choosing. These workers are denied the choice to pick the superannuation fund into which they want their hard earned funds paid. This puts them out of step with the majority of workers and prevents them from having the control over their retirement savings that they desire and need. The lack of choice and control over superannuation means that these Australians are paying unnecessary fees and insurance premiums and, as I touched on before, run the risk of accumulating multiple superannuation accounts, all of which have the potential to erode their hard earned retirement savings. Importantly, one of the issues—and I have seen this firsthand—is that they actually lose interest in their various superannuation accounts. This is one of the problems that I've seen professionally prior to working in this place. People don't pay attention to the multitude of superannuation funds, and that adds to the risk of the money that has been invested on their behalf being eroded and frittered away. The Murray review found that lack of choice is a barrier to Australians engaging with their superannuation and this barrier should be removed. That is what this legislation is about.

On this side of the House we advocate for and support choice and freedom for all Australians. It is a fundamental principle which coalition governments believe in. We believe that denying Australians a choice over their super is fundamentally unfair, anticompetitive and inefficient. Under this proposed legislation employers would no longer be able to deny their employees the choice of superannuation on the grounds that they are employed under an enterprise agreement or workplace determination that, importantly, still specifies a default fund. New employees to whom such a determination or agreement applies will have to be provided with a standard choice form and given the opportunity to nominate their own superannuation fund.

On this side of the House we know that Australians work hard to build their nest egg for their later years. We believe they should be given the opportunity to maximise the value of those retirement savings that they accumulate. After all, it is their money, not the employer's money and not the superannuation fund's money. Giving them the choice over their super fund will hopefully help reduce the perennial problem of people racking up multiple accounts, paying multiple fees and insurance premiums.

Under this bill an employer will need to ensure that that choice option is provided. If the employer makes non-compliant contributions in relation to superannuation funds, they will have increased their superannuation guarantee shortfall over the quarter. This provision increases employers' liability to superannuation guarantee charges, which are paid to the Commissioner of Taxation in respect of each employee. These notional contributions for an employee are in relation to defined benefit schemes and will not cause the employer to have an increase in a guarantee shortfall if the employee's benefit in the scheme would not be affected by the employer making contributions to another fund. To be clear, the bill does not prevent enterprise agreements specifying a particular fund; it just provides additional choice.

Since the last time this bill was considered, we've seen the evidence from the Productivity Commission's report about the negative effects of multiple accounts on retirement savings, estimated at $2.6 billion a year in unnecessary fees and insurance premiums. The Commission also found that legislative change was needed to remove the restrictions on Australians being able to choose their own fund.

The government has already taken action through the Protecting Your Superannuation package. This was introduced last year to cap fees on low-balance accounts, remove the existing stock of multiple accounts and consolidate low-balance accounts into active funds. As we saw earlier today with the previous piece of legislation, closing down eligible rollover funds and moving those to the ATO is now a further step in consolidating lost superannuation. This bill is another step in fixing the problem of multiple accounts by seeking to prevent Australians from being forced into default funds that are specified under enterprise agreements or workplace determinations.

Most of all, we want the settings that underpin our superannuation system to be focused exclusively on the interests of members of these funds and on giving them the framework to maximise their retirement savings from the first contribution and throughout their working life. I commend this bill in its original form to the House.

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