Graham Perrett (Moreton, Australian Labor Party, Shadow Assistant Minister for Education and Training) Share this | Hansard source

In Dante Alighieri's inferno he ranks the inner circles of hell. He puts the murderers and all sorts of horrible people in the outer layers, moving all the way in. The second last circle of hell he reserves for hypocrites. Some days I really understand why he went with that literary device.

I rise to speak on the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019. This bill amends the Superannuation Guarantee (Administration) Act 1992 to require that employees under workplace determinations or enterprise agreements have the right to choose their superannuation fund. This would apply to new workplace determinations and enterprise agreements made on or after July 1 2020.

Choice in where your superannuation contributions go is a good thing. Rather than just bombast, Labor actually are the party of universal superannuation and Labor supports fair dinkum choice in superannuation. Labor is also committed to making sure that the superannuation of every worker is in a high-performing fund and that every consumer has the information they need to make the best choice of fund. Labor is rightly proud of Australia's superannuation system. It's one of our most significant financial and social reforms. The Keating government's brave reforms in 1992 introducing the compulsory employer contribution scheme will continue to have life-changing impacts on Australians forevermore as they age and enter retirement.

Sadly, Australia's population is ageing. Despite the optimistic recommendations of Treasury there's actually no denying that. It's an empirical fact that every demographer will confirm. In 2017 there were 3,794,062 Australians aged over 65 and they accounted for 15 per cent of the population. If we fast forward or project forward it's estimated that by 2057 there will be 8,799,475 Australians aged over 65 and they will account for 22 per cent of the population. But it is because of the foresight of the Labor Keating government that many of these Australians will have a comfortable retirement funded through their own superannuation funds.

Older Australians deserve a dignified and comfortable retirement, so Labor will always support sensible reform to Australia's superannuation system. Australia's superannuation system currently has over 15 million members and over 80 per cent of Australians aged 25 to 54 hold a superannuation account. There are around 28 million superannuation accounts. When we break down the funds there are 217 institutional funds, which breaks down into 38 industry funds, which tend to be high-performing; 37 public sector funds; 24 corporate funds; and 118 retail funds. There are also 517,000 self-managed funds, with $697 billion in assets. The Australian superannuation system currently manages over $2.8 trillion in assets, more than 140 per cent of our GDP. What a proud legacy of the Hawke and Keating Labor governments. I should mention the Rudd and Gillard governments, which made some improvements there, as well. It is estimated that by 2035 the superannuation system will be worth $9.5 trillion—a small country, but an incredible amount of funds being managed by Australians, and managed well by Australians. That's an enormous asset, held by working Australians.

The provisions of this bill will give every worker under a workplace determination or enterprise agreement the right to choose their superannuation fund. In effect, this bill gives those workers the power to choose where they invest those funds—$2.8 trillion worth of power, and rising; the power to choose a fund that will give you the best return on your money so that your retirement is the best it can be; and the power to choose a fund that will invest your money how and where you want it invested. You can have total control, or limited control. You can make the decisions. That's why it's so important that Australians have choice in where they put their superannuation funds. The power of your superannuation funds means you can effectively shape the world you live in. For instance, you can choose to invest in what is called an 'ethical super fund', which only invests in clean energy or sustainable products, medical solutions, innovative technologies, responsible banking, health care, recycling, energy efficiency, education and aged care. Take the time to look at what your funds are doing. Who wouldn't want to invest in those things, especially when the returns are healthy? Imagine if our $2.8 trillion, and rising, funds were put into those investments right now. It is a power that Australians hold to change our world right now, a power that millions of Australians hold in their hands—just an ethical phone call away, or an ethical mouse click away.

Under current settings the median balance on retirement for full-time workers will be $310,000 for women and $628,634 for men. For median workers their average annual retirement income will be around $28,000 for women and nudging $34,000 for men. For those women, that's only 65 per cent of the ASFA comfortable retirement income standard and for men it is 79 per cent of the comfortable retirement income standard. It's even worse for workers who fall in the bottom 10 per cent of the income distribution. Women in that category will be only 21 per cent better off than they would be if they were receiving the age pension and men in that category will be 37 per cent better off, compared to the age pension. I'll come back to that gender gap in a minute. So, although our superannuation system is working for many Australians, sadly it is also leaving some of our fellow citizens behind. The superannuation guarantee is currently legislated to increase to 12 per cent by 2025, although I would go on the record and say I'm a little wary of the machinations of some of those opposite. But, I live in hope. For average workers the balance on retirement for median workers will rise by 20 per cent for men and 19 per cent for women. The poorest workers, those in the bottom 10 per cent of income distribution, will retire with an additional 30 per cent in accumulated superannuation. For those workers, this will make a substantial difference to their comfort in their later years—to their health, to their retirement and to their quality of life.

The success of Australia's superannuation system relies on employers paying the superannuation of their employees. That's the contract—that's the deal. But, sadly, underpayment of superannuation by employers is a significant issue in Australia. Industry Super Australia estimates that 2.85 million Australians were underpaid. That underpayment amounted to $5.9 billion of their super entitlements. This is a very significant problem. These are scary numbers—$5.9 billion—and, sadly, it is increasing. Superannuation theft has increased by 25 per cent over the three years from 2013-14 to 2016-17—under the coalition's watch, I stress. Australian workers need a tough cop on the beat, and what do we get? One who is asleep behind the wheel with their feet up and half a doughnut hanging out of their mouth.

As I mentioned previously, the amount of superannuation accumulated by women is less than that accumulated by men. The average balance for men is 63 per cent higher than that for women, and it's worse for older Australians nearing retirement, where the average balance for men is 72 per cent higher than for women. Of those people nearing retirement without any superannuation, 13 per cent of men and 23 per cent of women are in the 60 to 64 age group.

Our superannuation system is currently not working as well as it needs to for women. I hope that the coalition government have a plan to address this issue. But, in their seventh year, we're yet to see it, and I fear that they do not have a plan. Too many Australian women are retiring into poverty. Older women, particularly single women, are at a greater risk of experiencing poverty and homelessness in retirement. By the time they're 60, 34 per cent of single women in Australia live in poverty. Labor took to the election a plan to boost women's superannuation balances by paying the superannuation guarantee on paid parental leave and making it easier for employers to pay extra superannuation to women. Labor would be happy for the coalition government to adopt these policies. They're good, sensible policies.

More generally, while the superannuation system delivers strong returns for many Australians, some are trapped in persistently underperforming superannuation funds. At least $269 billion in assets and five million members are stuck in underperforming funds—not industry funds, I would stress. Superannuation fees are higher in Australia than in other OECD nations. Australians pay more than $30 billion a year in superannuation administration fees—1.1 per cent of total assets. That's why we've been happy to send this bill off to the well-respected Senate economics committee. We hope that this piece of coalition legislation doesn't make Australian workers who pay superannuation worse off.

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