Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

(a) in the document 'Our Plan', the Liberals and Nationals promised Australians, prior to the election that: 'We will deliver greater stability and certainty on superannuation—we won't move the goalposts. … We will ensure that no more negative unexpected changes occur to the superannuation system so that those planning for their retirement can face the future with a higher degree of predictability';

(b) the Government has subsequently revealed, in breach of that promise, that there will be a freeze on superannuation guarantee increases until at least July 2025;

(c) the Prime Minister has said of the changes that: 'By delaying the increase in the superannuation guarantee levy we are keeping more money in workers' pockets';

(d) between 7 September 2013 and 2 September 2014, the Fair Work Commission received thousands of applications for approval of enterprise agreements; and

(e) enterprise agreements' nominal expiry dates can be up to four years after the enterprise agreement is approved;

(2) recognises that:

(a) parties negotiate the terms of enterprise agreements, including terms providing for pay increases, having regard to, among other things, the superannuation guarantee rate;

(b) the parties who negotiated enterprise agreements for which applications for approval were made between 7 September 2013 and 2 September 2014 would have done so on the basis that the superannuation guarantee rate would increase during the life of the agreement;

(c) employees to whom such enterprise agreements apply are generally covered by 'no further claims' provisions, so they are not at liberty to negotiate for greater pay increases; and

(d) accordingly, any money that is not going into their superannuation fund will also not be going into their pockets, despite the Prime Minister's claim; and

(3) accordingly, calls on the Government to:

(a) concede workers, whose enterprise agreements were negotiated between the election and 2 September 2014, have lost 'money in their pocket' because the negotiations were conducted on the basis there would be 'no negative change to superannuation'; and

(b) enable those workers to renegotiate pay increases, to compensate for the unexpected freeze on superannuation.

Among the many promises this government made before the election was the promise that working people relied upon when negotiating their wages for the forthcoming years. The promise was made in black and white in the document called Our Plan. That document said—

Stuart Robert (Fadden, Liberal Party, Assistant Minister for Defence) Share this | Link to this | Hansard source

Where is it? Show it to me.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

I will tell you about it. It said that a Liberal-Nationals government would:

… deliver greater stability and certainty on superannuation – we won’t move the goalposts.

We will ensure that no more negative unexpected changes occur to the superannuation system so that those planning for their retirement can face the future with a higher degree of predictability.

That is actually what the document said. It is something that one might look upon with great surprise now, given what has actually happened since the election. As we have seen time and time again with the Abbott government, this promise, like many others made before the 2013 federal election, was not worth the glossy paper it was written on. Despite claiming to be a government that keeps its promises, the government has not only moved the superannuation goalposts but has yet again broken faith with and made it even more difficult for hardworking Australians to retire with dignity and certainty.

The Abbott government's decision to delay lifting the compulsory superannuation guarantee to 12 per cent until at least 2025 means that not only will Australians lose $128 billion from their retirement savings but also these workers—and we are talking about thousands and thousands of workers, who have negotiated a workplace agreement, relying on another one of this government's promises—have been deceived. On 2 September, when Tony Abbott ripped this money from people's retirement savings, he claimed that workers would now see more in their take-home pay—a disingenuous argument. No-one is buying the Prime Minister's claim that this superannuation freeze is good for workers. There is no guarantee, let alone evidence, to suggest that workers will now see a subsequent increase in their wages. There is no evidence that employers are moving to renegotiate with those employees to ensure that they put the money that will not be going into superannuation back into the pockets of those working people. In fact, business has been quite clear that people will not see a proportionate increase in their pay.

Australian Chamber of Commerce and Industry Chief Executive Kate Carnell said that the reduction in future costs was fantastic for business, and she said that although employers had capacity to pay higher wages the correlation would obviously not be linear. If this super freeze is fantastic for anyone, it is certainly not fantastic for the working Australians who will see their retirement income take a hit. And it is not fantastic for those people in the small businesses of Australia who rely on wage earners to be customers, who rely on wage earners to be the people who buy their products and services, because there will not be situation where this money is going into the pockets of working people.

Ai Group Chief Executive Innes Willox does not expect wages to increase to offset the postponement of the superannuation guarantee, and former Reserve Bank Governor Bernie Fraser said:

Employers are not going to say, 'well look, we don't have to make this mandatory improvement in super contributions so therefore we are going to give the equivalent amount to workers' - that's not going to happen.

And that is the truth of it: that is not going to happen. These comments contradict the Prime Minister's argument that workers will not go backwards as a consequence of this superannuation freeze.

Those employees who have negotiated agreements since September of last year have already gone backwards. Because of this superannuation freeze an employee aged 25 will be $9,000 worse off by 2025 and $100,000 worse off by the time they retire. This Prime Minister cannot claim to be a friend of the workers, and he cannot claim to be a friend of those who believe in the right to a dignified retirement after a lifetime of hard work. But this motion that I am moving today gives the Prime Minister, the Liberal government and all of those opposite an opportunity to honour, in actions, their words. I call on the government to enable those workers who have made workplace agreements, relying on the pre-election promises that the Prime Minister made, to renegotiate their wages so that they have at least a chance to get into their pockets the money that now will not be going into their superannuation. The government should allow people who made those agreements between 7 September 2013 and 2 September this year to renegotiate the pay they will receive under those agreements, because this government claims that those workers will be getting the money in their pockets. Well, government, Mr Abbott, is— (Time expired)

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

Is the motion seconded?

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Michael Sukkar (Deakin, Liberal Party) Share this | Link to this | Hansard source

The member for Griffith is right: before the last election the coalition did commit that we would not make any unexpected detrimental changes to superannuation, and that commitment was so important, because the context was that the Labor Party had so significantly eroded confidence in our national superannuation system that Australians were crying out for some form of positive statement from the Liberal Party to ensure that we would protect their future savings. Labor for those six years basically treated the superannuation savings of Australians as a piggy bank to just be raided any time there was a hole in the budget that required filling. And don't we know that there were lots of holes in the Labor Party budgets of those six years of government that did need filling—and invariably they always went to superannuation.

During Labor's time in office, Labor announced increased taxes on superannuation of almost $9 billion, including cutting super benefits for low-income earners by more than $3.3 billion. So, it is extraordinarily important to place into context how important and how welcome the coalition's commitment of not making any unexpected detrimental changes to superannuation was. I can assure you that the members of my electorate in Deakin were extraordinarily in favour of that commitment. And we are keeping our commitment to not make any unexpected detrimental changes. We said that we would increase the superannuation guarantee from nine to 12 per cent, and we are doing that. But in recognition of the difficult fiscal environment the government is faced with—no thanks to Labor—we have decided to cushion the budget from the full impact of the increases and boost the superannuation guarantee in a more gradual way. So, instead of increasing from nine to 12 per cent in seven years, from 2013-14 to 2019-20, the guarantee rate will increase from nine to 12 per cent in 13 years, all the way to 2025-26.

And let us be frank: this is not our preferred option, but it is the only option that is on the table. And if people have any concerns, then they should blame Labor, because if Labor had not continued to frustrate our clear mandate on repealing the mining tax then the changes the government has made in respect of the more gradual ramping up of superannuation may not have been necessary. So, I am not sure how anyone in the opposition and in particular the member for Griffith could credibly claim that we are making unexpected detrimental changes to superannuation. We are simply increasing it at a more gradual rate.

The member for Griffith derides our comments on this side of the House that delaying the increases in superannuation will result in more money being in workers' pockets. Well, every time she derides that statement she also derides the Leader of the Opposition. I would remind her of the Leader of the Oppositions' statement when he was the Minister for Financial Services and Superannuation in government. He said: 'Increases in compulsory super come out of people's wages.' So I would say to the member for Griffith, if you don't believe us, look at the words of your own leader: 'Increases in superannuation invariably come out of the pockets of workers.' Does that mean we should not aspire to increase superannuation? Of course not. But there is a time and a prudent way in which to do it and, frankly, the Labor Party has no credibility on the issue of superannuation. Having hit superannuation accounts with $9 billion of additional taxes over six years they should, in my view, sheepishly avoid this topic because they have absolutely no credibility.

In closing, I want to say in respect of this motion that the best thing we can do for people's retirement savings is ensure they have a job. Without a job you are not making contributions to your superannuation account. Without a job you cannot make voluntary contributions to your superannuation account, which all employees can do. That is why we are so focused on building a stronger economy with greater jobs, higher wages and, ultimately, greater superannuation.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

There are some issues in politics on which parties' legacies can tell you a lot about what they intend to do. On the issue of Medicare it was Labor who fought to introduce Medicare, it was Labor who reintroduced it after the coalition had scrapped it and it was Labor who fought elections from 1969 through to 1993 against a coalition that wanted to bring down Medicare. And so too with superannuation. Universal superannuation was a Labor achievement brought in despite the opposition of coalition members. When the Hawke government took office in 1983 only 40 per cent of Australian workers had any form of superannuation. After the 1991 reforms that was up to 72 per cent.

But universal superannuation was not universally popular. Then Senator Bronwyn Bishop said in the other place:

I heard Senator McMullan said the difference between our systems on superannuation is that ours is compulsory and theirs is voluntary. That is very true. That is an essential difference. Our policy is designed to make it attractive for people to provide for themselves in later life whereas this government's policy is designed to penalise business, to regulate it out of existence.

That quote is now 22 years old. The minister at the table is describing it as a silly statement, but it was a clear statement by the then Senator Bishop. My predecessor as the member for Fraser, Senator McMullan, took an opposite view. He took the view that universal superannuation was not a penalty on business; it was an opportunity for workers to be able to retire with dignity.

The member for Griffith, in bringing forward this vital motion, has pointed out that the government's claim that if you do not get it in superannuation contributions you will receive it in wages is false. It is a false claim because of the way in which enterprise agreements are enacted. Enterprise agreements for which applications for approval were made between 7 September 2013 and 2 September 2014 were made on the basis that the superannuation guarantee rate would increase during the life of the agreement. And yet the government's broken promise—one of many—sees workers being made worse off as a result.

It was the Hawke government that brought in universal superannuation and envisaged it rising from its initial level of three per cent up to 15 per cent. The Howard government froze it at nine per cent for the best part of a decade, during the noughties. It was the Rudd and Gillard governments that ensured that superannuation would again rise from nine to 12 per cent, and it is not surprising to anyone who knows a modicum of political history that it is the Abbott government that is now freezing it at 9½ per cent, a level that is inadequate for Australians' retirement.

This is an issue that concerns many of my constituents. In a post-budget survey more than 4,000 responded to tell me what they thought about the budget, and they said they did not back the unfair budget. Ninety per cent of participants in a survey in the Fraser electorate told me that they believed the budget broke promises. When I broke that headline figure down by voting preference, even 53 per cent of self-professed Liberal Party voters told me the budget broke promises. Even your supporters on your side of the House are claiming that this budget breaks promises. Eighty-one per cent of respondents said they believed they will be personally worse off or much worse off as a result of decisions in this budget, with women being more concerned than men.

When I asked Canberrans to nominate which of the government's unfair cuts really worried them, the response was equally strong. More than 88 per cent were concerned about the Abbott government's $80 billion cuts to health and education Not far behind was the deregulation of universities and the changes to HECS, with 82 per cent of Canberrans opposing it. A majority of Canberrans rejected the GP co-payment and changes to Newstart. The survey unequivocally shows Canberrans believe the Abbott government has got it wrong in handing down an unfair budget and that no government should intentionally take the most from those who have the least.

Of course, this government does not need another survey of 4,000 Canberrans to tell it how unpopular the budget it. Australians are clamouring about that from the sidelines. Whether they are conservative premiers or backbenchers backgrounding their local newspapers, they know this budget is unfair and breaks promises. (Time expired)

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

It is always a great pleasure to follow my good friend and colleague. We have spent time together. He took us to a part of the debate that elaborated on the traditional parts of Labor's heritage. They want to claim that they own the superannuation space. They want to claim the area around Medicare. Those claims aside, I say that, as a coalition government, we unequivocally own the space of sound economic management. Labor comes nowhere near the coalition's record on running tighter budgets. Labor comes nowhere near on providing the fiscal certainty that this nation needs.

He also spoke about comments that were made 22 years ago about superannuation. I can go a couple years more. Twenty-five years should be a significant number for this parliament. Every time someone walks into this chamber we should be reminding Australians that it has been 25 years since Labor has delivered this country a surplus. They will blame all types of measures for why they have not been able to achieve it, but the underlying fact when it comes to fiscal and economic management, whether it be around superannuation or Medicare, is that they cannot manage a budget. We do it and do it exceptionally well.

In bringing the budget back to order, tough decisions need to be made. We should always take the opportunity, when around superannuation, to remind Australians that the decisions that we are making are nothing other than a by-product of Labor's failed fiscal and economic management. We now have to clean up the mess.

They spoke about promises in earlier speeches—promises that were broken. I draw you to the promise that was made by the Australian Labor Party when they claimed that they had delivered a surplus to this nation—claimed openly, broadcasting it through advertising campaigns. Whether or not there was malice or just pure, unadulterated incompetence, I struggle to understand the difference.

One of the comments earlier on was a poignant one, where the speaker spoke of those receiving superannuation only doing so because they have a job by the good grace of God. Our position in growing the economy is making sure that small business and the business sector have a strong enough bottom line that they can continue to employ people. For the electorate of the mover of this motion herself: it is a beautiful electorate, busy with small- and medium-sized businesses, predominantly around the food sector—it is a very picturesque part of Brisbane. As I travel through that electorate regularly I often see more and more businesses closing on weekends because they cannot afford the exorbitant penalty rates put in place by this government.

So I sit and wonder: we talk about superannuation—if you do not have a job because your business is not open, how much super are you earning if you are sitting and home unemployed? The answer is 'nothing'. So we have made the decision to freeze the fee-for-superannuation rates from 9½ per cent through to 12 and we will not kick them off until 2020.

Labor's leader, when he was the financial services and superannuation minister in government said that increases in compulsory super come out of people's wages. That was his quote. The reality is that it comes out of small business wages—it is an extra expense on them. I make the point, as does the government, that it is far more prudent for an employee to have a position where they are receiving some form of superannuation, rather than being in the circumstance were growing costs are affecting business and of course they are then not able to have a job.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to support the motion moved by the member for Griffith. It is an important motion because it actually goes to the core of this government and their agenda. It highlights not only the broken promises of this government but also their twisted priorities.

This is a government that is quite happy to freeze the slow increase in compulsory super contributions for the majority of Australian workers while at the same time repealing legislation which would have seen a fairer superannuation pay for those at the highest end of the super industry.

A result of this government's legislation to freeze the increase of the compulsory super contribution is that it directly attacks 8.4 million Australian workers. It also highlights how this government fails to really understand the whole concept of super. Super is a generational change. It ensures that when people who started work just after the legislation came in in 1992—people of my generation—that we have a lifetime of super to retire on. So for anybody who is an ordinary worker on a modest income and who is older than someone in their 30s, it needs to be expected—because they do not have that lifetime of super—that the government may have to partner with them in their retirement income. That could be part of their super and part pension. It is something that this government really fails to understand—the whole policy area of retirement and retirement income. Maybe the government misunderstand, or maybe there are just a few blatant lies that this government has said. Let's just remind people of what the Prime Minister said prior to the election and what he has said since.

He actually came out and said that there would be no changes to superannuation—no changes—that workers did not have to worry. Regardless of who would be in government there would be no changes with super. Well, that is a lie. We have had people stand up and say that it is because of the budget deficit. Okay, again, another lie. If it were because there is a budget deficit then why did the government repeal the changes that would have seen those who spend over $100,000 a year in their super contributions pay a small amount of tax? Again, it is those twisted priorities by this government.

After changing the super contribution, the Prime Minister has been out there saying that no workers will be worse off. Does the Prime Minister not understand how super works? Super is income. It is workers' income delayed until they retire. So if you freeze that compulsory super contribution, you are in fact cutting the wages of workers. You are cutting what is their deferred income for when they retire. To go on TV and say that this is a good deal for workers demonstrates how the Prime Minister does not understand how superannuation works—unless, of course, the Prime Minister is about to bring a bill before the House to guarantee that the change in superannuation will be introduced into wages. I am yet to hear an employer say: 'Great news. Because I do not have to increase your super, I am going to increase your wages.' I have not seen that outcome yet in bargaining that is going on right now in Australia. If the Prime Minister wants to be true to his word then he needs to bring forward legislation that would see a guarantee in the increase in workers' wages. I am talking about those on the smallest incomes. I am talking about the 8.4 million ordinary workers in Australia.

The Prime Minister is not the only one who said that workers would not be worse off. We also have, of course, education minister Christopher Pyne claiming that this would mean that superannuation contributions would stay at 9.5 per cent for the foreseeable future and will go up to 12 per cent, and that the extra that would have gone up to 12 per cent would stay in the pay packets every week. Again, does the education minister not understand how bargaining works? I am yet to see an agreement that actually talks about the fact that this increase in super will now go into increased wages.

Who are we are talking about when it comes to this super reform? Who will benefit the most? It will be women. Women on low incomes—women working in child care, hairdressing and hospitality. Labor's reforms would have seen an increase of $5 billion in super savings; super that would have helped those on the lowest incomes have security when they retire. I support the motion before the House. (Time expired)

Kelly O'Dwyer (Higgins, Liberal Party) Share this | Link to this | Hansard source

You would think from this motion and from listening to those opposite that Labor is the best friend of superannuation. Nothing could be further from the truth. Far from being the best friend of superannuation, Labor has wreaked havoc on our superannuation system from the moment of its inception until today.

Those on the other side have a very short memory. During Labor's time in office, Labor actually announced increased taxes on superannuation of almost, not $1 billion, not $2 billion, not $3 billion—no!—$9 billion, including cutting superannuation benefits for lower-income earners by more than $3.3 billion. Moreover, Labor, far from making it easy for people to make voluntary contributions to their superannuation and far from making it easier for people to be able to provide for themselves in their retirement, made it more difficult. It made it more difficult by lowering the thresholds before which people would then be penalised for making additional contributions into their own superannuation—into their own retirement.

We have been entirely consistent on superannuation. We said before the election what we were going to do and we are sticking to that promise. We said we would increase the superannuation guarantee from nine per cent to 12 per cent, and we are doing that. But in recognition of the very difficult fiscal environment that we found ourselves in as a result of Labor's recklessness with our budget and their continued recklessness in borrowing here and there—particularly from superannuants, with those $9 billion of taxes I just spoke about—the budget is in desperate need of repair and we need to make sure that we increase the guarantee in a more gradual way.

So, instead of increasing from nine per cent to 12 per cent in seven years—that is, from 2013-14 to 2019-20—the superannuation guarantee rate will increase from nine per cent to 12 per cent in 13 years, from 2013-14 to 2025-26. We are keeping our commitment and we are honouring our obligations.

But Labor, of course, do not acknowledge their role in the superannuation fiasco that they created. Labor have had about as many different positions as perhaps there are in the Kama Sutra. In fact, the Leader of the Opposition had quite a few flexible positions. I point out that he does sometimes get hit by the honesty stick and he sometimes does say what is truly in his heart. He pointed out on superannuation, when he was Minister for Financial Services and Superannuation in government, that 'increases in compulsory superannuation come out of people's wages.' That is Bill Shorten's quote; these are not my words—although I do agree with them—these are the words of Leader of the Opposition. Despite what those opposite have said, it does directly impact workers' wages to increase the superannuation guarantee.

Those opposite can be cavalier about the impact that this may have on individuals, their families and their retirement savings. We, on this side of the House, are not so cavalier. We believe it is important for people to save and be self-reliant and we will support them in that endeavour to do just that. That is why we have always made it easier for people to make voluntary contributions to their superannuation. We have always made it more tax effective for them to do so, to provide them with the right incentives to put money aside. It is clear that that has been having a significant impact, which is no thanks to Labor but thanks to the previous coalition government and thanks to the previous economic management of the previous coalition government. We take up that same mantle here in this parliament, in this government, and we will continue our commitment to superannuation for the welfare of all Australians.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for a later hour.