Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

This week we have been talking about how we can support older Australians in their retirement through the age pension. Australia's demographics are changing, and people in this place must display long-term vision if we are going to meet the challenges of an aging population. Today I rise to defend Australia's compulsory superannuation scheme and super's role in maximising the number of Australians who are able to support themselves in retirement without relying on the age pension.

I wish I could do it under better circumstances, but unfortunately compulsory superannuation, like the age pension, is under attack by this Liberal coalition government. Two weeks ago the Treasurer announced that the government was looking into allowing first home buyers to access their superannuation to finance their deposit. He has been rightly criticised for proposing such a dud plan that would undermine the fundamental principles of retirement savings and compulsory superannuation but also exacerbate Australia's housing affordability crisis.

Unfortunately, the Treasurer and the Prime Minister, who supported this idea initially, needed to check first with their trusted ally the Minister for Finance if they wanted sound advice before announcing their new plans. When asked about this exact policy in October last year, the Minister for Finance said:

Increasing the amount of money going into real estate by facilitating access to super savings pre-retirement will not improve housing affordability.

It would increase demand for housing and, all other things being equal, would actually drive up house prices by more.

What a great deal of prescience from the Minister for Finance—a view backed emphatically by economists and public policy professionals.

This split in cabinet says everything about the new era of good government that was meant to be characterized by sound policymaking and a more consultative leader. It may seem like an ill-advised thought bubble if viewed as a one-off, but unfortunately there is precedent for Coalition governments undermining our compulsory superannuation scheme. They opposed its introduction by the Hawke-Keating governments and they do not understand it to this day. Last year the Treasurer announced that the scheduled increase for compulsory super contributions from nine to 12 per cent would be postponed. Unable to accept the fact that his policies were disadvantaging millions of Australians, the Treasurer said:

… if people think that this is going to have a long-term impact on their superannuation, blame Labor, they wouldn’t let us keep our election commitments.

This is also the case for the low income superannuation contribution, a policy targeted at helping the poorest workers save for their retirement which was also cut by the Abbott government on coming into office. These actions will mean less superannuation savings for retirees, and not by a small amount; it will mean tens of thousands of dollars less in the pockets of Australian retirees at their retirement.

The coalition's form on compulsory super spans back decades from when former Prime Minister John Howard undermined superannuation in his very first year in office. In the 1995 budget Labor Treasurer Ralph Willis, one of my predecessors in this place as a former member for Gellibrand and one of the great advocates for superannuation not only in this place but also in his previous career at the Australian Council of Trade Unions, proposed scheduled increases to compulsory super contributions from nine to 12 per cent and eventually to 15 per cent. The Howard led opposition, hiding its true intentions, went to the 1996 election promising to keep these scheduled increases. Howard and Costello broke their promise and axed the increase less than six months after they released their policy, claiming they could not afford it. Sound familiar? It is standard practice for incoming coalition governments and it is happening all over again under the Abbott government.

The current Prime Minister, who has called out compulsory superannuation scheme 'one of the biggest con jobs ever foisted by government on the Australian people', is following in the footsteps of his self-proclaimed paternal figure, John Howard, who on its introduction called it a 'job killer'. The kind of chaos we have seen on superannuation policy from this government in the last six months is indicative of a party that does not understand the fundamentals of superannuation. A government that halts the mandatory super contribution increase, that undermines the foundations of a system that seeks to help people save for their retirement and then cuts the age pension is a government with no long-term vision.

It has been 45 days since the Prime Minister announced 'good government starts today'. From the chaos we have seen on superannuation policy and the broken promises we have seen on the age pension, it is clear that this is just another broken promise from a government with no credibility.