Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Financial Services) Share this | Hansard source

Labor is referring the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 to a Senate inquiry for good reason. There are still question marks about whether or not Australian workers will actually be disadvantaged through this legislation, which seeks to require that employees under workplace determinations or enterprise agreements have the right to choose their superannuation fund. There's a risk that vulnerable employees may be forced into funds that are underperforming and may actually end up worse off. So Labor's referring this bill to a Senate inquiry.

Nonetheless, I do wish to make some remarks regarding the bill, and, importantly, the second reading amendment that's been moved by the shadow minister, the member for Whitlam. The amendment points out this government's atrocious track record when it comes to supporting superannuation in Australia and the fact that many Australians will retire with inadequate superannuation balances. The government is seeking to undermine boosting those superannuation balances by questioning whether or not the staged increases in compulsory superannuation should go ahead. That's been the view of some MPs, and you might call them rebel MPs—certainly a sizeable number of backbench MPs on the coalition side.

This bill amends the Superannuation Guarantee (Administration) Act to require that employees under workplace determinations or enterprise agreements have the right to choose their superannuation fund. It would apply to new workplace determinations and enterprise agreements made on or after 1 July 2020. Some employees are covered by enterprise agreements or workplace determinations that do not allow choice of which super fund their compulsory superannuation guarantee contributions are paid into. In terms of the number of people, Industry Super Australia estimates that, of those employees covered by enterprise agreements, only 7.4 per cent have no choice of superannuation fund, which represents just about 1.9 per cent of the workforce.

When it comes to superannuation, Labor has a very strong and a very proud track record not only of fighting for a better superannuation system but also of introducing necessary reforms to strengthen the superannuation system and ultimately ensure that people who are members of superannuation funds—particularly low-paid and vulnerable workers—are in the best fund possible and get the best deal that maximises their retirement incomes into the future.

While the Senate Economics Legislation Committee is currently inquiring into this bill and Labor has reserved its position on the proposed choice of fund changes until the committee has reported, we do, of course, support choice in superannuation. Not being able to choose a person's own fund can mean that employees who've changed workplaces can end up with several superannuation accounts, leading to higher fees and charges and potentially paying multiple insurance premiums.

Labor is committed to ensuring that every worker is in a high-performing fund and that adequate information is available to empower consumers with the information that they need to make choices that are in their best interests. Getting stuck in an underperforming superannuation fund remains a real risk for many Australians. It's a risk not only to their wellbeing and their retirement but also to the wellbeing of their families and their next of kin. An underperforming fund can cost an Australian worker the equivalent of 13 years of lost wages, and regulators and consumers need to be able to identify those funds that are charging too much and delivering too little.

Millions of Australians are being ripped off by underperforming accounts, and it's critical that these funds are forced to report their performance and lift their game. We've seen recently the MySuper heat maps that have been released by the Australian Prudential Regulation Authority, which is a good start. It puts the performance of the $2.9 trillion superannuation industry in Australia and their funds under the microscope and allows consumers to access, in a timely manner, information that's easy to understand and to make their own decisions about the performance and comparison of funds that they're looking to enrol in. The release of the APRA heat maps is an important step towards providing Australians with the information they need to get out of underperforming superannuation funds and into better-performing funds.

But there is more to be done, including the extension of heat maps to the choice sector and ensuring that the data is presented in a way that's more easily understood by consumers. It's time those opposite stopped some of their ideological attacks on the super system and got on with the difficult work of fixing some of that underperformance. We all know that the government doesn't have the best track record when it comes to delivering on some of those changes to superannuation around performance. We remember its disastrous 2016 superannuation tax changes. After Labor led the way from opposition in 2015 and proposed policies to reform superannuation tax concessions, the government spent much of 2015 and 2016 arguing against those sensible reforms to tax concessions that had been put up by the Labor Party, particularly those for people on higher incomes.

Then, in its 2016-17 budget, the government announced that it planned to make changes to some of those tax concessions for high-end super. But it was the way it went about it. It was done in a hurry, without consultation with the industry and, you might say, without due diligence, and the government's proposed $500,000 lifetime cap on non-concessional contributions triggered widespread concern that the government was making retrospective changes. The government didn't respect those calls and arrogantly ploughed on, and we saw several members of the coalition raise concerns about that notion of retrospectivity, which saw the member for Dawson threatening to cross the floor and oppose the government's budget proposals if changes were not delivered.

As with a lot of reforms that were put forward by this government in respect of superannuation, they reluctantly scrapped the changes. And that was only after it had undermined confidence in the retirement system and sparked a civil war inside the Liberal Party. Fast-forward to 2020, and now this fighting is continuing within the coalition around the notion of the level of compulsory superannuation contributions.

Mr Tim Wilson interjecting—

And one of those who have been involved, as the rebel MP, is the one across the chamber there who's rudely, once again, interjecting. We all know that the member has been out there trying to undermine government policy, trying to claim that people who are on low incomes will lose out if Labor's legislated increases in the compulsory superannuation guarantee are increased into the future. All it's going to mean—if the government listened to the likes of Mr Wilson—is that low-paid workers, particularly women—

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