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

If you didn't know anything about superannuation and you wanted a crash course in compulsory superannuation in Australia, all you would need to know is this: the Liberal and National parties don't support superannuation. When they're in government, they do their best to water it down so that workers in Australia retire with less in their retirement savings than they otherwise would have. Labor takes the opposite approach. We established the superannuation system. We believe in it, we're very proud of it and, when we're in government, we do our best to strengthen it so that workers retire with more in their superannuation accounts and can enjoy a dignified retirement. The differences between the two parties are clear when it comes to superannuation. Labor's philosophy is that superannuation is about government saying to workers: 'Thank you for all of your hard work and all of the work that you did over the course of your working life to build the national economic wealth of this country. We're going to support you by giving you a tax concession to encourage you to save for your own retirement so that you can do things like own your own home and have an annual holiday every year, and to ensure that you can pass something on to your kids and your grandkids to give them a good life.' That's what superannuation is all about, and that is what this government is trying to undermine.

At the moment, the government have two policies that will undermine the philosophy of superannuation providing a dignified retirement for workers in this country. This isn't the attack on superannuation that we ordinarily get from those opposite when they get to government, chipping away here, chipping away there. This is a full-on double-barrelled attack on people's retirement savings, through the superannuation early release scheme and now the campaign that's once again going on amongst government MPs to scrap the promised, guaranteed, legislated increase in superannuation savings for Australian workers.

On the first one, we know that members of the government are encouraging Australian workers to raid their superannuation accounts in circumstances where they might not need to and might be able to get through this difficult recession period without having to do that. The evidence of that is in the fact that data released by companies like AlphaBeta, analysing the bank transactions of Australian workers, shows that in 40 per cent of the cases where people have raided their superannuation accounts there has been no discernible fall in their income. They've just taken the opportunity to get this money and, in some cases, go on an unnecessary spending spree. The evidence of that is in the fact that 10 per cent of the funds was spent on gambling and another element of it was spent on alcohol and tobacco by people who didn't have a reduction in their income. They are the Australian workers who are going to suffer down the track, because, as we all know, the great beauty of superannuation is in compounding interest. It's in the fact that a small nest egg becomes a big nest egg over the lifetime of a worker. It is Australian workers who are going to suffer in circumstances where they may not have needed to raid their superannuation but have been encouraged to do so by this government.

The second element is the campaign by many on the other side to reduce or get rid of the legislated and promised increase in minimum amounts of superannuation for Australian workers. This is the 9½ to 12 per cent staged increase that has been legislated and was promised by the Prime Minister and members of his government in the lead up to the last election. We believe they're about to announce that they're not going to go ahead with this. They'll come up with the usual arguments. They'll say, 'We believe that it's better that it goes into wages, that people get that money now and can use it to try and buy a new home or ensure that they're secure at this point in their lives.' It's complete rubbish, and we'll know it's complete rubbish, because the last time that this occurred—when the Liberals were in government under the Howard government and they put a stop to legislated increases in superannuation—they used the same arguments: 'We'll put it into wages. Everyone will get a wage increase.' Guess what happened? It didn't go into the pockets of workers. It went into the pockets of employers in profits. Wages growth actually fell after those legislated increases were abandoned by the Howard government.

That says everything about what this mob is about. They're not about ensuring that workers are better off. They're not about ensuring that workers have dignity in their retirement. They're about making sure that employers get the opportunity to keep more of the income that they generate and turn it into profit for their businesses. That is wrong. That is deceitful. They are misleading the Australian public by holding out the hope that they will get more in their wages when they know very well that the reality is that that doesn't work. The notion of trickle-down, that it will end up in the pockets of workers, simply doesn't work, and they're about to try it on once again. We all know that they're warming up for another broken promise to the Australian people and another broken promise when it comes to superannuation.

The great beauty of the Australian superannuation system that Labor established is that it works. The evidence of that is in the fact that Australia is the 16th-largest economy in the world but we have the fourth-largest pool of savings funds. We certainly bat above our average when it comes to providing government policy that incentivises people to save for their retirement. That is why Labor is justifiably proud of that system. If you go back to before compulsory superannuation was established, 65 per cent of Australian workers had no retirement savings whatsoever. Now it's the complete opposite, and most Australian workers have at least some retirement savings, although they're going to be whittled away by those two policies that I just mentioned from this government.

So it's important that we protect the integrity of the superannuation system, because it's been successful—and that is why Labor is justifiably proud of the system that we built. But you don't have to ask anyone about the statistics. You just have to ask the average worker who has benefited from compulsory superannuation right through their working life. They might have been on a voluntary scheme through an EBA prior to compulsory super coming in, and then they've benefited from the compulsory scheme that was established by the Hawke government. That person will tell you how they've benefited from the superannuation scheme. The advantages that that worker has received, in a dignified retirement, justify the policy, and yet that is what the government is trying to undermine.

Labor is justifiably proud of the system that we built, and we're going to do all we can to defend it to the hilt, because we believe in the notion of superannuation. We believe in the dignity of retirement for Australian workers who have put their heart and soul into working their entire life and into building the great nation and the economic strength that we have and that we're able to use at times like this, when we enter into a recession. We can call on those savings to make sure that we continue to have people in employment and get through this difficulty and get back on a growth trajectory for our economy. That is why we will continue to raise these issues in this forum in respect of bills like this.

I certainly support the intent of this bill, because it provides a sensible amendment to the Australian income tax laws that extends the bring-forward rule for non-concessional contributions to allow those aged 65 and 66 to make up to three years of non-concessional superannuation contributions. Current laws allow this up to 64, and the current law's inconsistency with pension ages is an artefact of the change in pension age. The annual non-concessional contributions cap is currently set at $100,000 a year, and this cap limits the amount of after-tax contributions that can be made into super each financial year. Individuals are able to bring forward some of the amount of that cap if they meet specified criteria—having less than $1.6 million in that balance and not having recently used the bring-forward arguments.

In this amendment to our income tax laws, we're encouraging people and giving them the opportunity to save more for their retirement. That's a good thing. But the government is seeking to undo the good work in this bill with the policy of allowing people to raid their superannuation accounts and the foreshadowed proposal to ensure that we don't increase compulsory superannuation. It doesn't make sense in the current environment, when we're facing a very difficult economic circumstance. We're in recession. We need to be doing all we can to encourage people to save more so that there is that pool of investment funds for businesses to invest once we get the economy up and running again and get people back into work. That is why Labor is so passionately committed to opposing what the government is trying to do for Australian workers, and that is why we will fight to maintain the integrity of the Australian superannuation system, for the dignity that it provides for Australian workers who have put their heart and soul, throughout their working life, into building the economic wealth of this nation.

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