Josh Frydenberg (Kooyong, Liberal Party) Share this | Link to this | Hansard source

This bill from this government is about a closed shop. It is anticompetitive. It is putting the workers last and politics first. Let's face it: those on the other side have 100 per cent of their front bench who are members of the union. Seventy per cent of their caucus are members of the union. At a Labor conference 50 per cent of the votes go to the union. But in Australia only 12 per cent of the private sector workforce are members of the union and only 18 per cent of the general workforce are members of the union.

Why will you not give the workers of Australia a free choice about who their default super fund will be? Industry super funds are in the pockets of the union. Who knows this best? The Minister for Industrial Relations and Workplace Relations. He knows this best, because he was a director himself of an industry super fund and now he is the fox in charge of the henhouse.

The Productivity Commission has made a recommendation that this government extend default super funds much more broadly than it currently does with industry super funds. We on this side know that if we get our chance in government we will extend default super funds to any MySuper-compliant super fund. This is about allowing the market to determine where the workers choose to place their super funds. We have $1.4 trillion in superannuation in this country. That is a massive amount of money. The workers of Australia should have the right, the choice and the freedom to determine where their money goes.

Choice and freedom are essential to the Liberal Party's DNA. It does not matter whether it is in health, where private health insurance is being cut by the government. It does not matter whether it is in education, where you seek to deny funding to private schools, independent and Catholic. It does not matter whether it is in workplace relations and the superannuation industry.

Many of my colleagues on this side have spoken passionately and with conviction about the rort that is currently taking place before our very eyes—a rort that is in the interest only of the union movement and not of the workers of Australia and a rort that is against the Productivity Commission's very recommendations. With some important legislation before this House you would think there would be proper scrutiny. You would think that we would have weeks to look at the legislation and to consult the stakeholders. We were given less than 24 hours to look at this legislation. Shame on you! Shame on the member for Maribyrnong! Our parliamentary draftsmen did not even have time to draft the amendments that we wanted to bring forward.

Why are you hiding from scrutiny? You know why the member for Maribyrnong is hiding from scrutiny. He does not want the Australian people to know about this cover-up. He does not want the Australian people to know that it is his mates in the union movement who are the ones who will benefit. You do not want members of the Australian public—or indeed more than $10 million people who are in industry super funds—to know that industry super funds typically ask for more than 50 per cent of their directors to come from the unions, to be nominated by the unions so that these directors can supplement their incomes with a directorship of these industry super funds.

We know that Fair Work Australia has been discredited because of the Thomson affair. We know that of the last 10 appointments to Fair Work Australia, between December 2009 and December 2011, eight had union backgrounds.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

How many?

Josh Frydenberg (Kooyong, Liberal Party) Share this | Link to this | Hansard source

The member for Wannon asked me how many had union backgrounds. Eight out of ten appointed to Fair Work Australia between December 2009 and December 2011 had union backgrounds. The member for Maribyrnong may want to know why the government has increased compulsory super from nine per cent to 12 per cent. The reason is that this will see more than $8 billion annually go into industry super funds. Who are the big beneficiaries in industry super funds? It is the unions—the unions that dominate the Labor Party and dictate the policy of the Labor Party.

Let me remind the House and all those that are listening around Australia to this telecast that only 12 per cent of Australians working in the private sector workforce are members of unions. In the general Australian workforce only 18 per cent are in a union. But on the front bench—and I am looking at you, the member for Maribyrnong—100 per cent are members of unions. In the caucus, 70 per cent are members of a union. One hundred per cent of the front bench are members of a union and 70 per cent of the caucus are former union officials. We talk about the gene pool of the Labor Party shrinking before our eyes. We know why: the unions are dominating the membership of the other side.

More and more members of the Australian workforce are giving up the union ticket because they want to have a say where their money goes. They want flexibility in the workplace. They want you to change your unfair dismissal laws. You owe it to them to loosen up your unfair dismissal laws. We want to get the regulation off the back of small business. We want to see some freedom in the workplace rather than just the unions dominating the show. Why did you increase super from nine per cent to 12 per cent? You did it because you wanted to see $8 billion a year flow back into the industry super funds. Member for Maribyrnong, why do 50 per cent of the votes at your federal conference automatically go to the Labor Party? Why have eight out of the 10 appointments to Fair Work Australia gone to people with union backgrounds?

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Why don't pie shop workers have choices?

Josh Frydenberg (Kooyong, Liberal Party) Share this | Link to this | Hansard source

The member for Wannon asks: 'Why don't pie shop workers have choices?' Even those who cannot even warm a pie should have choice. Those who serve a cold pie and those who serve a warm pie should have choice. The problem is that in every aspect of workplace relations on your watch we have seen a reregulation of the labour market. This has cost jobs, this has sent up wages and this has seen lower productivity.

The CEO of Santos, David Knox, said on the front page of the Financial Review that if he was to open a gas facility in the Gulf of Mexico it would be one third of the price of opening a similar facility in Australia. Why? It is because wages are out of control in this country. Productivity, by any international standard, is falling in this country. We have more than five million Australians employed in more than two million small businesses, and they complain every day to me about the unfair dismissals and the penalty rates that the other side has introduced.

We need to get a smarter, more efficient and more effective workforce. We will not do that by letting the unions dictate the policies. Fair Work Australia is discredited under this government. Productivity has come down, wages have gone up and we have not seen an improvement in the bottom line of companies. When we look around the world we see the economic troubles that are facing Europe, the United States and elsewhere. What has this government decided to do? It has decided to re-regulate the workforce and send productivity down and wages up with no commensurate gain for the Australian people.

On this particular legislation before this House we are seeing those opposite play a sop to the union movement. Their union masters are dictating the policy that they bring into this House. This is a bad outcome for the workers of Australia because the Productivity Commission, an independent body which so often provides intelligent information for this House to consider, has found that you need to broaden out the default super funds beyond the industry super funds alone.

The industry super funds are a reflection of the vested interests of the union movement. This goes back to the Hawke and Keating years in the 1990s, when they sought to put industry super funds at the centre of our workplace relations system. Why do more than 50 per cent of the directors on the industry super funds come from the union movement when the union movement represents only 12 per cent of the private sector workforce and about 18 per cent of the general workforce? The number of people who are prepared to pay their union money has gone down year after year. People are voting with their feet.

I say to the members on this side of the House that we will take a tough, strong stance against the union dominated Labor Party, which is producing bad policy for the people based on politics alone. Default super funds deserve to be expanded beyond just industry funds and that is why we on this side will support changes in government and we on this side will not tolerate bad legislation from this government. (Time expired)

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I thought I was going to grow horns and a tail there for a while, because I was a union rep in my younger days and it seems that they are the epitome of all evil. Let me tell the previous speaker that I have a lot of union officials who are friends of mine. They are presidents of our P&Cs, they sell raffle tickets at our local shows, they stand out in the hot sun selling tickets for our local shows, they run our rugby league and they run our voluntary fire brigade boards. They are not people with horns and tails as the previous speaker—who is laughing and thinks it is funny that people should do those things—says. I suppose he does so because he has never in his life such things. His sort of mentality was abroad in this place 100 years ago when we went down the mines. One in 31 of us never came back up again with that sort of mentality abroad in this place. Unlike him I have a record for standing up to unions when there was a time to stand up. I did not notice any Liberals standing beside us when we stood up in Queensland when they turned the lights out. We were the only government in Australian history that actually confronted them. I did not notice you blokes. You were hiding. You were lucky the lights were out so they could not see you. We could not find you. There is a time when there are excesses.

The reason I rise to speak is that numbskulls on my right here and also on the left—I do not want to let them off—are continuing to back the superannuation funds in Australia. I want to speak in praise of some of the trade union members on those superannuation funds.

Opposition Members:

Opposition members interjecting—

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Mr Deputy Speaker, I would like to speak here instead of the Liberal Party taking over.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The member for Kennedy will resume his seat. The member for Mitchell, the member for Kooyong and the member for Wannon are conducting a private conversation. They could do it outside the chamber or return to their seats.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I just wanted to get on TV.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The member for Mitchell will resume his seat. I call the member for Kennedy.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I want to speak in praise of some of the union appointees on the superannuation boards in Australia because three of them have come to see me. They have pointed out—

Opposition members interjecting—

I would like you to tune in, fella; you might learn something. You are sitting there like a giggling idiot, so I suppose I am not likely to get on your wavelength—that is for sure.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The member for Kennedy will withdraw.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I withdraw those remarks unequivocally. I praise those people who have come to me and said that all of the superannuation moneys are going into real estate and shares. We are just blowing up the balloon. If you keep blowing up the balloon it will burst. We have the most unaffordable housing prices in the world because the superannuation funds are being pumped into those areas. Under the great leadership in this place of people like Jack McEwen there was a 60-40 rule, and 60 per cent of your superannuation money was put into government securities where they were used to build things. It is not a concept that the Liberal Party understands; probably the Labor Party does not understand it either. They were used to build things such as railway lines to get our coal out, ports to get our coal out and transmission lines to take electricity into these areas and to open them up. They were government guaranteed.

We now have a superannuation system where there is no government guarantee on the retirees' funds and we know that they are all going into a hyper-volatile balloon about to explode in real estate and in the share market. I speak with authority because, unfortunately and sadly, I represent a lot of people who were prime losers in the collapse of Storm in Northern Australia. There were no union representatives on Storm, I can assure you. It seemed to go down pretty spectacularly. There have been a number of other organisations that have gone down spectacularly, and there were no union representatives there.

I ask sincerely that the people in this place listen to me when I say and when I communicate to you what those union members said to me. They said that all of that money is going into real estate and the stock market. It is not productive, it is not producing wealth in the long term. It is producing inflation. It is blowing up a balloon that is absolutely guaranteed to explode. When this place was much more successful than it is these days, we had people like Jack McEwen who ensured that 60 per cent of that money was protected. We had absolute protection for those people and government guarantees on the money. The money was used to go into productive resources instead of speculation. I venture to submit that all of that 23 thousand million of hard-earned savings in Australia is simply being pumped into speculation. None of it is going into production and into the facilities that we need for that production. Unfortunately and sadly, it is at great risk because it is going into inflationary areas.

Finally, I want to put on record my request to the minister that the financial consultants or planners be included in the list—which was my old business. I would very much like to see those people put on a list. Then, if you are an employee and you have a list of recommended superannuation funds, you also have a list of the local people that you know you can go along to and talk about where your money should be invested. So, whilst the minister has not agreed to put it in the bill, I would ask him to please consider this proposal further down the track. These people live in our local communities. They are well known, well liked and well trusted, and 99 per cent of them, from my experience, have done the right thing by the people that they do business with. If they did not, they could not survive in their suburbs or their small communities in which we know and like them. I would like to see those sorts of people in that recommendation as well as the superannuation recommendation from the fairness tribunal.

On the condemnation of trade union officials and making them out to be monsters: my friend, your great granddaddy went down a mine, and one in 31 of his mates never came back up again. The only reason that does not exist today is the work of those trade union officials. So just be a bit careful of the graves that you are spitting on.

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

I thank the honourable member for Kennedy for his contribution. I also thank the government members for their contributions to the debate on the Fair Work Amendment Bill 2012. This bill delivers another part of the government's workplace relations and superannuation agenda. It is another step in ensuring a balanced, workable, simple and flexible workplace relations system for Australia, it is another step in the evolution of the national workplace relations tribunal—the new Fair Work Commission—and it is another step in improving the operation of the superannuation system to boost the retirement incomes of Australians into the future.

This bill is a further example of the government's cooperative and consultative approach to workplace relations. The bill implements recommendations from an independent expert review of our legislation that has been on the record since mid-July. We have announced a clear policy and approach in response. We have developed policy and legislation in consultation with the National Workplace Relations Consultative Council, with small business and with the superannuation industry. Both union and employer stakeholders agree that the bill is non-contentious. I repeat: both union and employer stakeholders agree that the bill is non-contentious. They want to get on to discussing other policy matters in workplace relations that are important to them, and I agree.

This is not the last step in workplace relations reform. I am committed to continuing to work with the serious stakeholders on making appropriate amendments to the Fair Work Act where there is clear policy justification and where they reflect the government's clear policy frameworks. I retain an open mind on all remaining recommendations from the Fair Work Act review panel. None of them have been ruled in or out. Yet the opposition's current workplace relations policy, despite their huff and their puff, remains a well-kept secret.

In relation to superannuation, there is one thing that we do know: the opposition will raise taxes on 3.6 million Australians earning up to $37,000 per year by slashing the Gillard government's low-income superannuation contribution. Around one in three workers will pay up to $500 a year more in tax because of the coalition's plans to slash any programs that are linked to the mining resource rent tax. Sadly, the coalition's destructive negativity means that they would rather reduce the wealth of 3.6 million workers than take money from those who can afford to pay. It is clear that some things have not changed for the opposition.

Their overriding principles in workplace relations were on show again last night when they voted to reduce the protections for worker entitlement and yet again even in the House today when they continued to speak against legislation that will boost the superannuation savings of workers. The opposition have publicly said that they support the overwhelming majority of the recommendations of the independent review panel. Given that this bill reflects the non-contentious aspects of the panel's recommendations, includes measures to improve the operations of Fair Work Australia and delivers an improved process for choosing default superannuation funds in modern awards, I trust that the opposition will support the bill and assist its passage through the parliament.

I must turn very briefly to some of the remarks made about industry funds and superannuation. I submit to the House that the opposition are long on rhetoric and short on facts. It is a fact that the Productivity Commission found that the existing default fund arrangements have resulted in net returns generally exceeding those of non-default funds. Over the eight years to 2011, default funds in modern awards have averaged an after tax return of 6.4 per cent compared with 5.5 five per cent for non-default funds. It is a fact that the Gillard government reforms will deliver a more contestable and transparent selection process than ever existed under those opposite.

The member for Wannon said that superannuation is too important to be played around with. We agree with that part of his contribution. The opposition play with superannuation when they selectively quote the Cooper review. They do not mention that recommendation 1.4 of the Cooper review concluded that the Productivity Commission should complete its review of default super and awards by 2012. The Gillard government has met this commitment. They did not mention that they have opposed other Cooper recommendations when it has suited them. They did not mention that they seek to abolish the tax concession that we are providing low-paid workers. Indeed, I have to say that they have criticised some on this side of the House for having industry experience and having had involvement with industry funds. The member for Kooyong described industry funds as giants. In any other industry the Liberal Party would be genuflecting when they talked about industry giants. But when organisations have equal member representation, it is too much for the opposition to stomach and it triggers their bias against equal representation in superannuation funds.

There is a clear reason that we departed from one of the Productivity Commission's recommendations. Unlike those opposite, who are interested only in attacking unions and industry funds—and we heard some of that bigotry spew forth tonight—the Gillard government was very mindful of a solution that is workable for all parties in superannuation, including employers. Those opposite ask why any MySuper product cannot be a default fund superfund, and they ask why we need to have between two and 10 funds listed. I submit that an outcome where there are over 100 funds for employers to choose from in an award is not efficient—certainly the employers agree with us. It creates red tape, especially for small businesses, who will face considerable search costs in determining which fund to choose. Unlike those opposite, we listen to big and small businesses who use the award system. We have modified the final Productivity Commission recommendation while retaining the essence of an open and transparent process.

While listening to those opposite debate the superannuation aspects of the bill, it struck me how infrequently they mentioned employers and their needs and how frequently they sneered at the contribution that employers make on the industry funds of Australia. It struck me how little they understand or respect the contribution of industry funds to delivering good retirement outcomes for Australians. I believe that all too often we see too much simplification from those opposite about industrial relations and indeed industry funds. I trust that the opposition will assist the passage of this constructive bill through the parliament. I commend the bill to the House.

Question agreed to.

Bill read a second time.