Julian Hill (Bruce, Australian Labor Party) Share this | Hansard source

Every time the government put up a bill to do with superannuation, such as the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020, they'd better understand that Labor members will get up and speak out against their plan to cut superannuation, to cut wages and to cut pay. Australians should be under no illusions. They should make no mistake about what the government is up to. The member for McNamara called it out well. There's a double game going on here. We have the Prime Minister and the Treasurer crab-walking away from their election promise that they're not going to cut superannuation or wages. We have this whole crop of backbenchers—the disaffected, the nutty, the deranged and the whole spectrum of them; most of those who are pushing this line hail from the IPA, I think—who are egging the government on to break their election promise and cut superannuation. They're laying the groundwork, in effect, to trash Australia's decades-old system of compulsory superannuation.

In effect, this is another little false dichotomy they're trying here—that somehow if we cut super you're going to get a wage rise. It's nonsense. Superannuation in this country is part of your pay. Your pay packet consists of the cash you take home in your superannuation, so, if you cut superannuation, in effect you're cutting the take-home pay, including the retirement savings, of Australians and you're condemning people to a poorer retirement. A cut to super is a cut to pay.

Super is part of your pay in this country. It is no longer something that just the elite have. Decades ago, it was really only the Public Service, perhaps the military and the higher end of corporate Australia that were lucky enough to have superannuation for a dignified retirement. Everyone else was condemned, from the time they retired until they died, to the age pension and the few bucks they'd managed to squirrel away, and they didn't live that long; that's the truth of it. But it was a visionary reform by the Hawke and Keating Labor governments in the mid-1980s for a range of reasons. First and foremost, it was to give working Australians a more dignified retirement, but it was also for really important fiscal reasons that should be recognised by those opposite, the people who tell us that they're the economically responsible brigade—the party of debt and deficit and all that stuff.

For very sensible reasons, the superannuation system was introduced. Back then, in the mid-1980s, there were about six or seven workers for every retiree. In the intervening decades, we've now come down to about four workers in Australia for every retiree. Within 15 years, the projections are that we'll be down to three workers for every retiree, as we've smoothed that curve with migration. But the projections, I think, are wrong when you look at the cuts to migration which we're now seeing. What's going to happen is that we're going to bring forward that date when we'll have only three workers for every retiree in the country.

What that means, of course, is more pressure on the pension system if we don't make people provide for their retirement. It's just a fact. It is a privilege, not a right, and it's also built up an incredible national savings pool of $2.8 trillion under management in this country, projected to rise to $10 trillion by 2040—an incredible national asset which I'll touch on in a moment. For individuals, it means that they will have a better retirement and that they own more of the national wealth and what Australia produces.

In a political sense, the battlelines on behalf of Australia are drawn. They're very clear. Labor created superannuation. Labor defends the superannuation system as being both good for workers and for everyday Australians in their retirement and good for the nation, with that incredible savings pool that we can invest in productive businesses and infrastructure and also overseas. We champion an increase in workers' pay through the legislated increase in superannuation. Contrast that with the Liberal Party and the government. The political history of superannuation in this country is that at every stage since 1974, when Gough Whitlam first launched the inquiry into a universal superannuation system, those opposite and their predecessors have opposed superannuation. They've opposed workers providing for their own retirement and building this national savings pool.

The same dance continued. Hawke and Keating introduced it. John Howard refused to continue the system and froze the superannuation guarantee. Rudd and Gillard legislated for the increase which we've now been progressing with. This Prime Minister—to his credit, you'd think for a moment—was the first Liberal Prime Minister to actually say: 'Yeah, okay, we'll keep the system. We promise we will not cut your superannuation. We won't cut your wages'. He said that before the election, but now he's under growing pressure from his backbench, and it looks like he's going to cave to it in the budget, and the budget's going to have a cut to wages and a cut to superannuation.

They're using the cover of COVID, of course, as an excuse for this. It's one of the big, fat lies which are being promulgated by those outside the parliament and many in it, I'm sorry to say: that somehow, if you cut superannuation, people are going to get higher wages. The fact is that, for most Australians in this recession, the superannuation rise of 0.5 per cent next year may be the only wage rise they get, and the government's lining up to cut it. It's a cut to pay. There's no guarantee, even if you say to an employer, 'You don't have to pay that 0.5 per cent into superannuation'—just a few dollars more into your superannuation fund—that that's going to go into wage rises. There's no guarantee for that at all. In fact, it's very likely that it won't happen if you look at the current labour market and economic settings.

The other big lie, of course, that's promulgated by those opposite—they pop up on Sky TV, they pop up in the House and they keep repeating it—is that somehow it's a choice between, on one hand, superannuation and having a dignified retirement and, on the other, pushing the money into housing now. That's just nonsense. It's trashing the retirement income savings of the income system if that's the way you go. Also, pouring those buckets of cash into the housing market, as anyone knows, is just going to push up house prices. It's economic nonsense to say it's going to make houses more affordable and people will be better off if you take people's retirement savings and push up house prices now. They'll end up with a house, sure, but they'll have no retirement savings.

Superannuation, as I said, is good for our economy. It boosts our national savings by $2.8 trillion. That means we do own more of our national wealth, and it reduces Australia's reliance on foreign sources of finance. As of 2013, we've achieved an amazing milestone in this country where, for the first time in our history, Australians, mainly through superannuation funds, actually own more equity overseas—we own more stuff in other countries around the world—than other countries and foreigners own in us. For the first time in our history, as a capital-intensive country that's always needed and welcomed foreign investment and capital, we own more stuff elsewhere than they own in us, and that's because of our superannuation system. That gives us enormous ability to diversify our investments, bring profits home from around the world, enrich Australians and grow our national wealth and also hedge against economic shocks. It reduces Australia's reliance on foreign sources of finance because we've got this incredible national savings pool that we can apply to productive assets. As I said earlier, it also offsets the impact of an ageing population.

There's another argument that I haven't heard from those opposite, the party who love to talk about debt and deficit. I remember my first 3½ years in this place. The member for Bendigo has been here an extra few years; she would have heard this. Every question time you'd get up and you'd get a lecture about debt and deficit. I haven't heard that since March. I haven't heard anything about debt and deficit from the party of debt and deficit over there, presiding over the biggest debt and deficits in Australia's history.

But superannuation actually has a positive long-term fiscal effect on the federal budget. This is well documented. It's an important point—although it's boring and nerdy—in terms of our international fiscal credibility. When international rating agencies, the bond market and our international partners size up countries—these are facts; I know those opposite don't like hearing facts—one of the big things they take into account when deciding what your credit rating is and how much they're going to charge you to lend money is whether you've provided for your ageing population in your pension system. That's one of the reasons that European countries have got themselves into all sorts of trouble in a fiscal sense: because they haven't put away superannuation. They've got pension entitlement systems, many of which are unfunded. The reason they do that is that they rightly conclude that countries, particularly democratic countries, with an ageing population and without the kind of super system that Australia's built are a worse risk to lend money to. That's because democratic governments ultimately, with an ageing population, will never be able to resist the political pressure to jack up pensions, health care and so on. So, with an ageing population and fewer taxpayers to support every retiree, it's a fiscally toxic combination brewing of higher debt and bigger deficits. Ratings agencies look at these things. Quite simply, without Australia's superannuation pool, we would be far less likely to have and hold a AAA credit rating, and we'd be paying more for our debt.

The debt outlook's already looking shaky under this government. They try and blame us for it, but the fact is the vast majority of the debt's been accrued by them since they took office. They don't like being reminded of that. But, thanks to Labor governments and the reforms in the 1980s and 1990s, that ability to hold a AAA credit rating and to pay much less for our debt than other countries goes right back to the fact that we've had the foresight to provide for retirement incomes and provide for our superannuation. It's not a point which we should give away lightly. It's a fundamental structural part of our retirement income system.

Despite all of these benefits—the benefits to the individual and the fact that people can retire and have a longer and more dignified retirement—the superannuation system at the moment still means that most Australians won't be able to retire fully on their super. However, they will have a better retirement with a part pension or a full pension plus their superannuation because of the national savings pool, the decreased reliance on foreign investment, the ability to invest in other countries and the positive fiscal debt and deficit impacts. All of these things are good things.

Despite all of these benefits, the Liberals hate superannuation. For four decades, they've opposed every single cent that's gone into super. They've opposed the system from the start. They've opposed every piece of legislation that has ever come before this parliament for workers to provide for their retirement. I think, because I've thought about this, that the more you look at it, if you actually read the economic policy stuff—and there are numerous studies on this—the more it seems a no-brainer for a country to provide for an ageing population and a retirement income system in this way.

So why have the government, the Liberal Party, got it in their DNA that they cannot bring themselves to ever vote for a piece of legislation that supports superannuation? I think they don't actually care about the retirement incomes of ordinary Australians—that's one of the key aspects. I really don't think they do. It runs counter to what I've always seen as the core purpose for the Liberal Party, which boils down to two things. One is to protect the people in our society who already have wealth. They can dress it up with all the language they like about aspiration, but when it boils down to it the thing that they screech most about and that you see the most outrage about from the government benches and those opposite is when the people who have the most wealth and privilege in this country may have that threatened. The core purpose of the Liberal Party is to protect those people who already have the most wealth and capital, and the other core purpose is to fight tooth and nail to stop any changes that ever require businesses to share more of their profits with workers through wages and superannuation.

There's a secret report the Treasurer is sitting on at the moment, his handpicked little Retirement Income Review, and the parliament looks forward to no doubt hearing what's in that review. He should release it for public debate. I don't know why he doesn't or what's in that is so secret, but we'll find out.

There's also a mad ideological crusade going on, as the member for Macnamara said, by the little IPA Daleks that seem to populate the other side. You can see this by examining their rhetoric regarding the different types of super funds and the levels of screechy outrage that you get. Of course there are three types of super funds. There are the for-profit ones, largely owned by big banks. They take management fees and dividends, and make profits. The government doesn't mind those funds, it seems. They like the big banks' funds and they're always there to defend the funds run by big banks for profit. Funnily enough, those funds tend to make less money for their members and provide for a poorer standard of retirement, but the government's happy to defend them because their big bank mates make profits. Then there are the SMSFs, the self-managed funds, where the trustees are the fund members. They're always very, very happy to defend tax breaks, whatever the arguments are for them.

But then you get the not-for-profit funds, the industry super funds, the public sector and corporate funds. They're the funds that don't take profits. They don't have shareholders that take profits. They have members and they distribute the surplus to their members. Funnily enough, it's those funds in this country that have the best returns for their members. They're actually a better bet. If you want to provide for your own retirement, you'd do better to put your money into an industry super fund than into a big retail fund where the bank makes profits. But the nuttiest and most sustained government attacks, including in question time when this topic comes up, are when the Prime Minister screeches about union industry funds--'It's terrible.' The nuttiest attacks are on the not-for-profit funds that give their profits or surplus to members. There's absolute silence when bank funds are caught ripping off members and providing lower returns. It gives an insight into what they're really on about.

From listening to the debate of those opposite whenever this topic comes up, they just don't get the economics of super. Whichever muppet gets sent in from time to time reads out their talking points and tells us that it's Australians' money and they know best. Of course it's our money; it's in our super fund. That's the whole point of the super system. It's put there for retirement. It's not put there so that we can spend it in the short term and spend it now. It's put there for our retirement so that we can have a dignified retirement as we're living longer with an ageing population, but also so that we have a more sustainable economy and fiscal settings. They just don't get the economics of super. If it weren't for super, more of Australia's infrastructure, agriculture, resources and companies would be owned by foreigners, with the profits flowing overseas. That's a fact. But, because of super, Australian funds now invest abroad to bring income back to Australia and boost our wealth. It's good for Australians, good for the economy and good for our fiscal outlook. I urge the government to reconsider their unconscionable plan to cut superannuation and cut wages for workers in this coming budget.

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