Daniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

I am pleased to speak on the Superannuation Amendment (PSSAP Membership) Bill 2020. As the previous speaker, the member for Kingsford Smith, has indicated, we will support this bill. It is a modest bill, but it contains a sensible measure that we will support. As previous speakers have indicated, this bill contains an amendment that will allow for greater flexibility in relation to the Public Sector Superannuation accumulation plan. In particular, it will allow for greater flexibility in relation to when people can contribute to accounts within that scheme. For that reason, we will support this bill. It is our understanding that it will benefit around 10,000 people and give them greater flexibility to contribute either after they have finished working for the Commonwealth or while they are working for the Commonwealth and having contributions made through concurrent employment.

Of course, the really substantive discussion that we are engaged in today is not in relation to this bill itself, which I suspect all in this chamber will support, but in relation to the very important second reading amendment put forward by the member for Whitlam, the shadow Assistant Treasurer. This is a very important second reading amendment because, as earlier speakers have indicated, it puts members of the government to the test. Will they support this amendment and affirm the commitment, or promise, they made to the Australian people at the last election? It's very important that we discuss that promise and why it is so important that that promise be kept. That promise, made by those opposite, was that they would increase the superannuation guarantee from 9.5 per cent to 12 per cent on the schedule, as legislated. It is critical that the government do so, because it fundamentally underpins the way in which our society is preparing to support the retirement incomes of generations to come.

It's instructive to go back to 1991, when Bob Hawke, Paul Keating, John Kerin and other members of the Hawke government spoke in such visionary ways in support of the extension of the superannuation guarantee. As the shadow Assistant Treasurer and the member for Kingsford Smith have already indicated, this was done to provide people with dignity in retirement, with income security and with greater income in retirement. In particular, it was done to provide people with dignity in retirement in the face of a demographic challenge that has, if anything, increased as a threat to retirement incomes in the intervening years. It is absolutely critical that we support the superannuation pillar of our retirement system.

Indeed, if we go back to the early 1990s, when Australia passed that visionary piece of legislation, it is instructive to look at what the rest of the world did while looking on. In 1993 the World Bank published a seminal piece of analysis of retirement income support systems, and that is where it set up the multi-pillar system. In particular, it recommended a system in which there would be a taxpayer funded retirement pension system supported by a mandated savings account system supported by voluntary savings. It was these three pillars that would support retirement incomes in the optimal way, and the World Bank and policymakers around the world have not changed their view in the 30 years since that time. In 1993, when the World Bank set up that system, it was basically describing the Australian system, the Hawke-Keating system that has proved so successful in the intervening years.

The member for Goldstein in his contribution said that there were some private accounts before the 1991 reforms. The issue is not whether there were some mandated superannuation accounts before those reforms but who had access to them—and, of course, it was a small minority. When you look at who didn't have access to them, it was people on low incomes, people in insecure work, people who were the very rationale for the entire scheme—and they remain the rationale for the entire scheme. Indeed, if one looks at the situation today, those people were the beneficiaries of the scheme in the early 1990s because they were brought within the umbrella of the superannuation guarantee, and today it is those workers who get 9.5 per cent when many professionals are given the tax benefit of superannuation payments well above 9.5 per cent. As many speakers on our side have already indicated, people in this chamber who argue that workers in the community should be limited to 9.5 per cent are themselves receiving far more than that. So, in the intervening period, when our society continues to age, the need to increase the superannuation guarantee from 9.5 to 12 per cent has never been more urgent.

One only need look at the taxation outcomes in a whole range of OECD countries to see the predicament that Australia faces in decades to come. At the moment, the tax as a share of GDP required to support our pension payments is a little bit under five per cent of GDP. But if one looks at countries in the OECD with far older populations—countries like Greece, Italy, Spain, Germany, the Netherlands, Belgium and Japan—many of these countries have tax-to-GDP ratios to support their public pension systems of over 10 per cent of GDP, and some more than 15 per cent—and in many of those countries those percentages are increasing. What we see in those countries is what Australia will face in years to come if we don't plan for the future, which is precisely what the superannuation system does. If we, in a short-sighted attempt to play ideological games, hold the superannuation guarantee at 9.5 per cent, we will be committing ourselves to a future which will require a far greater tax burden on future generations to pay the pension payments that retirees deserve. The words that justified the introduction of the superannuation guarantee in 1991 still hold true today—and in fact hold true to an even greater extent, given the demographic changes that we still see unfolding.

Those opposite claim that this is some kind of simple trade-off with wages, and that workers would in fact be better off if they forwent the increase from 9.5 to 12 per cent. Firstly, there's the lived experience of the last few years, when earlier administrations within this Liberal government held back superannuation guarantee increases. During that period we've seen the lowest period of wages growth on record. Workers in this country know from their experience that if this government goes back on its promise at the last election and holds the superannuation guarantee at 9.5 per cent, they will get no wage increase as a result of that. They understand all too well that the simplistic trade-off offered by those opposite will not result in greater wages.

Moreover, it's ironic that those opposite argue that the superannuation guarantee should be held at 9.5 per cent so as to boost wages while at every turn trying to weaken the bargaining power of unions and trying to undermine their capacity to fight for higher wages. It's a very disingenuous argument. Workers in this country know all too well, from the last seven years of this government, what wages growth they can expect from a government that is trying to reduce the superannuation guarantee not to increase their wages but to undermine a public policy initiative that it never supported and has voted against and tried to undermine ever since.

As the previous speaker indicated, this is not just an attack that we're seeing build up on the opposite side first from backbenchers, then from ambiguous statements by ministers and the Prime Minister and then, presumably, from a government response at some point during the budget or shortly thereafter. This is not just an attack on the increase in the superannuation guarantee. We've now seen two waves of early release, which is yet another means by which the superannuation system and our entire pension system are being undermined. What we've seen is the release of over $31 billion through the early-release scheme that this government put in place in response to the COVID pandemic. Let's be absolutely clear what this reflects: this reflects the government all too often forcing those on low incomes to self-fund what should have been a government funded response to a recession. The superannuation system was never meant to be a business-cycle funding mechanism. It was never meant to be a means by which the government could short-change its own fiscal response to economic downturns by forcing people to dip into their retirement savings. That is what this government has done, in this instance, on two occasions now, and there is every prospect that we haven't seen the end of it. There is $31 billion that should have been provided by this government that has been withdrawn from super.

Let's think about the 600,000 people who have now entirely cleared out their superannuation accounts, who have zero balances—many of them young people under 35 who now won't get the benefit of a lifetime of interest earned on those dollars. Those people have a right to ask why they had to withdraw their own money to achieve worthwhile ends, it might be said. 'Why did we have to withdraw our own money to make ends meet, to put food on the table, to make the mortgage payments, when it's the government's job to support us during economic downturns?' It's extremely short sighted and simplistic to say, 'It's their money,' when, in fact, what the government is doing is forcing people to withdraw money from their superannuation accounts at a time when that is not in their interests. This three-word slogan 'it's their money' is papering over the situation, and it is putting many, many people at a great disadvantage in the decades to come. It fundamentally undermines the entire purpose of a savings account system in order to support retirement incomes.

So we will fight any further extensions of the early release scheme that we've seen to date. And, as the shadow Assistant Treasurer has indicated—and he has put the government to the test with this second reading amendment—we will push the government to hold true to its promise at the last election that it would increase the superannuation guarantee from 9.5 to 12 per cent. This is a promise that the government made at the last election and this is a legislated schedule of increases in the superannuation guarantee which the opposition remains firmly committed to, because it is absolutely essential in order to maintain the integrity of our retirement income system. If one goes back to the very origins of the superannuation system, to the increase in the scope of the superannuation guarantee from the few who were benefiting from it in the early 1990s to the many—the vast majority—who benefit from it today, the rationale for that scheme is stronger than ever.

It is crucial that this House vote up the second reading amendment so that the Australian public can move forward knowing that this parliament remains committed to the long-term integrity of our retirement income system. So we will support this bill, but it is absolutely critical to also support the second reading amendment to this bill and support the superannuation system that is so critical to the long-term future of this country.

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