Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

by leave—I move amendments (1) and (2), as circulated in my name, together:

(1) Clause 2, page 2 (table item 5), omit the table item.

(2) Schedule 2, page 8 (line 1) to page 37 (line 36), omit the Schedule.

As outlined in the second reading debate, the coalition is keen to see schedule 2 of the bill dealing with the regulation of self-managed super fund auditors repealed from this measure. If we are able to achieve that outcome we would happily support the propositions that the government has brought before the House. We move that amendment inspired by the Cooper review's own conclusion that the self-managed superannuation fund sector is largely successful and well functioning. It did not identify any need for substantial change. What we have seen on the basis of that general conclusion is the government cherry-picking from a range of recommendations, choosing elements motivated I am not quite sure what, from the Cooper review with little consistency. For example, they have ignored many of the governance reforms proposed by the review. There is a strong correlation between the measures opposed and the vested interests of industry super funds.

So we wonder: why is it, when the government has to make a call on these issues, that they seek to penalise the one-third of those super industry and self-managed superannuation funds and yet avoid anything that might impact on union dominated industry funds?

Here we are seeing more than 400,000 self-managed super funds having additional regulation and cost imposed upon them; yet the government has failed to make any case whatsoever about how the current checks and balances are inadequate, dysfunctional or deficient. We have seen, instead, a cherry-picking of the recommendations, none of which actually relate to the imposition of fees; yet this is the very same mechanism that saw the government able to gouge, I think, $370 million extra out of self-managed superannuation to achieve its fiction-and-fudged budget surplus.

So we are wary about the motive, because the government has failed to outline any coherent or compelling case about how these changes might improve whatever the problem is that the government has been unable to identify. Instead we have seen Labor members talking about devastating cases, such as Trio, dealing with funds management—completely irrelevant to this topic and completely unrelated to self-managed superannuation funds, but being held out as a justification for these measures.

So, for these very thoughtful, considered and well-researched reasons, we have put forward some terrific amendments and, if the government shared our ambition about removing unnecessary regulation and compliance costs that add nothing to the peace, order and good government of this country, I am sure that the minister at the table—the minister increasingly becoming known as the minister for superannuation fiddle and fudge—would see the merit of these measures and support them.

We have not seen the case made. There is no justification. This is a cash grab with additional compliance requirements that achieve no specific policy outcome on the basis of a review that actually pointed to how largely successful the SMSF sector is, how there is currently the involvement of the tax compliance area, the ATO and the professional accounting bodies and how appropriately qualified people manage self-managed superannuation funds and a separate, appropriately qualified person carries out the audit process. There was no indication of any systemic failure, dysfunction or suboptimal arrangement in those current policy settings. Yet here we have more red tape and more cash grab—more gouge of revenue out of the self-managed superannuation sector that the government has comprehensively failed to justify.

I commend the amendments to the House.

Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Link to this | Hansard source

After listening to the member for Dunkley's submission on the amendments, I regret to advise him that I am still not persuaded of the merit of his case. Just to assist the House as to the reason why the government, upon consideration, is not supporting these amendments: the member for Dunkley said that the government should not cherry-pick the Cooper review. We would say that this is good advice for the opposition, too. The Cooper review recommends precisely the position we are putting. It does not recommend the position being put by the opposition.

We agree with the Cooper review in this context on this matter. We believe that SMSF auditors play a crucial role in regulating the SMSF sector and ensuring that members' savings are adequately protected. The SMSF sector is rapidly growing and it is diverse. There are 478,000 SMSFs approximately, and there are about 30,000 new self-managed superannuation funds established each year. These funds hold about one-third of all superannuation assets—over $400 billion out of total superannuation assets of $1.4 trillion. What we are seeking to do, as opposed to the amendments, is make sure that auditors are appropriately qualified and competent to detect and report contraventions of superannuation law.

Industry consultation, which has been a mark of what this government does in superannuation, on these amendments reveals widespread support from the accounting and superannuation industry. No less an organisation than the Institute of Chartered Accountants in Australia stated in their press release on 23 June 2012 that these amendments will 'be in the best interests of the Australian community,' including SMSF members, and that auditor registration 'will assist in raising the bar in SMSF audit quality in Australia'. Auditor registration will help improve the integrity of the rapidly growing SMSF sector and ensure that the sector can continue to thrive.

SMSF members rely on a range of experts to assist them to build their savings and ensure that they are complying with superannuation laws. We want SMSF members to be confident that their auditor is competent and able to effectively advise them in relation to the running of their SMSF. This is why we cannot support the opposition's amendments, because auditor registration will improve outcomes for self-managed superannuation fund members in Australia and is consistent with this government's pro-superannuation policies which include not only this measure but lifting superannuation from nine per cent to 12 per cent, which was opposed by those opposite, and abolishing the discrimination against employees over 70 who are not receiving superannuation—indeed, we are abolishing the 15 per cent tax paid on superannuation contributions by people who earn less than $37,000 a year.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

Thank you for assisting us in understanding the rationale that the ministers are applying. Is the minister able to produce any evidence of a failure in audit competence that would give rise to these measures? He mentioned how things would lift the competency and audit standards. I was just wondering whether he could point to any evidence that the standards that we all expect are failing to be met at the moment, and whether he could enlighten the House about the basis of the assertion he just made.

Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Link to this | Hansard source

I do not wish to unduly prolong debate and I assume that the member for Dunkley has been following these topics for longer than just now—I know that, in fact. The Institute of Chartered Accountants, the CPA and the Cooper review have all suggested that our approach on auditor registration is sensible.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The question is that the amendments be agreed to.

Bill agreed to.