Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

I rise to speak on the Public Sector Superannuation Legislation Amendment Bill 2018. I want to make it clear from the outset that Labor will be supporting this bill, because it makes a number of mostly technical changes, favourable changes, to superannuation arrangements for public servants, judges and Commonwealth parliamentarians. I want to go to the broader aspects first and then more specifically to some issues regarding the superannuation guarantee.

The first part of the bill deals with taxation of judges' pensions. It allows members of the Judges' Pension Scheme to meet their division 293 tax liability requirements through a lump sum payment. Some members currently can't meet their liability, and this change rectifies that. It's consistent with other Commonwealth schemes, and we support it on that basis.

Another aspect of the bill is the reversionary super benefits payable to children. This bill provides some certainty for the children of members of several Commonwealth super schemes, specifically around what happens to members' super balances should they pass away. These schemes will be standardised and modernised when it comes to reversionary super benefits paid to children of deceased members of schemes. The amendment increases the minimum age test for children to be in full-time education from 16 to 18, and it removes the requirement for an eligible child to not be employed. These changes reflect the fact that most kids don't leave formal education until they're at least 18, and that part-time and casual employment is very common.

The next set of issues are around the Commonwealth Super Board. The bill reduces the board's size from 11 to nine directors and modernises the governance arrangements. We support that aspect of the bill as well. We also support the fact that the bill gives the Parliamentary Retiring Allowances Trust the flexibility to pass a resolution without a meeting and allows other actuaries, not only the Australian Government Actuary, as it is now, to provide advice to the Parliamentary Contributory Superannuation Scheme. Again, this is consistent with other Commonwealth schemes, and we support it on that basis.

The main issue I wanted to pick up on, though, is around payments under the Parliamentary Contributory Superannuation Act 1948 and whether or not they meet the minimum superannuation guarantee requirements. The Australian Government Actuary found there were some limited circumstances where this could be an issue—all hypothetical and unlikely scenarios. Nonetheless, we support this measure to ensure that super guarantee contribution requirements are met.

While supporting the cleaning-up of that part of the bill for those narrow circumstances, we have a broader issue in this country about unpaid super for workers who are not in these Commonwealth schemes that we are discussing today. For many of them, the issue of unpaid super isn't unlikely or hypothetical; it's very real—and it's unacceptable to have so much unpaid super. Unpaid super is effectively wage theft in this country, and it's a big and growing problem. Industry Super Australia estimates that 2.4 million workers are losing $5.6 billion in SG payments each year. So, for the broader Australian workforce, unpaid super is a massive problem. This bill deals with the small sliver of the workforce in Commonwealth schemes, but I would encourage the government to get serious and to get real about unpaid super for the rest of the workforce right around the country. Super is part of a worker's pay and conditions. Every worker deserves to receive the superannuation they're entitled to. It's not voluntary super. It's a superannuation guarantee, and we can't take the 'guarantee' out of super. We can't take the compulsory aspect out of the super guarantee.

We have a Prime Minister and a government that engage in all these other ideological frolics about superannuation and are prepared to quickly fix some of the issues that arise in Commonwealth super, but we need them to show the same dedication to unpaid super in the broader workforce that they're showing to unpaid super in that narrow sliver of the workforce. Unfortunately, the signs are not good. We shouldn't hold our breath waiting for the government to act on unpaid super. They've actually gone in the other direction. They've proposed a 12-month amnesty for employers who haven't made compulsory super payments to their staff since 1992. So dodgy bosses who haven't paid their staff super for a quarter of a century won't be penalised at all by those opposite if they pay it during the amnesty period. What's worse is that the SG charge would be tax deductible for employers, so dodgy bosses would get a tax break for doing the wrong thing. That is absurd and it's unfair. We don't support that aspect of the bill. The government are acting on unpaid super for people in the Commonwealth scheme but, with their inaction and their policies, making the situation much worse elsewhere in the superannuation system where millions of Australian workers are missing out on the SG.

The specifics of the bill that I ran through are mostly technical. They won't affect the vast majority of Australians, as I've said. We support the bill. It is narrow and focused. We support the changes that guarantee that super guarantee payments are made in these instances and we encourage the government to go further for the broader workforce.

We support the bill. We don't support other changes that are being proposed, or have been proposed, by those opposite. We don't support those moves to give bosses a get-out-of-jail-free card if they haven't paid super. We don't support the recent move by those opposite to undermine super by allowing people to access their account for a house deposit. We've never supported the coalition's historical attacks on super, including opposing universal compulsory super in the first place, voting against increasing the super guarantee above three per cent, trying to abolish the low-income superannuation contribution scheme, delaying the super guarantee increase to 12 per cent and trying to weaken penalties for employers who don't pay the right amount of super, before we won that battle here in these houses of parliament. We don't support any of those things. We do support the technical and non-controversial changes which are specific to this bill.

David Coleman (Banks, Liberal Party, Assistant Minister for Finance) Share this | Link to this | Hansard source

I would like to thank all members who have contributed to the debate on the Public Sector Superannuation Legislation Amendment Bill 2018. The bill includes four key changes relating to the superannuation arrangements for parliamentarians, judges and civilian employees of the Commonwealth.

The first key change concerns a measure announced in the 2012-13 budget relating to a reduction in the tax concessions on superannuation contributions of very-high-income earners, which is known as the division 293 tax. In 2013, the legislation for several Commonwealth superannuation schemes was amended to allow a person to request that they be paid a lump-sum amount from their scheme to meet their division 293 tax liability. This is done using a division 293 tax release authority. The Judges' Pensions Act 1968 was not amended, as judges are exempt from the division 293 tax for constitutional reasons. However, there are a small number of nonjudges that have been granted the same status as judges for the purpose of membership of the Judges' Pensions Scheme. These non-judge members and any future non-judge members are subject to the division 293 tax. The bill therefore includes amendments to the Judges' Pensions Act 1968 that are similar to those made to the legislation for other Commonwealth superannuation schemes.

The second key change included in the bill is to amend the provisions in the Parliamentary Contributory Superannuation Scheme to ensure that, in all circumstances, the calculation of any lump-sum superannuation guarantee safety net benefit meets the superannuation guarantee requirements. The actuary for the Parliamentary Contributory Superannuation Scheme has advised that, in certain limited circumstances, the calculation would not ensure that the benefit would meet the statutory minimum superannuation guarantee requirements. Under the current provisions of the scheme, this could potentially occur where the member converts a significant proportion of their pension into a lump sum and the member has very long service—noting that the main benefits cease accruing after 18 years—and/or the member is over 65 at retirement, in which case a lower lump-sum conversion factor applies, and/or the member's superannuation salary is significantly lower than the member's salary for superannuation guarantee purposes. The bill therefore includes amendments to the Parliamentary Contributory Superannuation Act 1948 to ensure that any lump-sum superannuation guarantee safety net benefit calculated under the scheme will meet the statutory minimum superannuation guarantee requirements. The amendments do not increase any parliamentary pension entitlements for any individual members.

The third key change included in the bill concerns reversionary superannuation benefits payable to, or in respect of, children. The Parliamentary Contributory Superannuation Act 1948, the Judges' Pensions Act 1968, the Federal Circuit Court of Australia Act 1999, the Superannuation Act 1976 and the Superannuation Act 1922 provide for benefits to be payable to, or in respect of, a person who is the child of a deceased member of one of the schemes established by those acts. Generally, to be eligible for a reversionary benefit, the requirement is that the child must prove that, from the age of 16 and above, they remain in formal full-time education. In addition, in some schemes where the child is aged between 16 and 25, the child must also not be ordinarily in employment. The amendments increase the minimum age that a child will have to be to meet the test of being in full-time education from age 16 to age 18 and remove the requirement for an eligible child to not be ordinarily in employment. This reflects that a majority of current children do not leave formal education until at least the age of 18 and that part-time and casual employment is common. These changes are consistent with those that have already been made to the Military Superannuation and Benefits Scheme.

The fourth key change included in the bill is in relation to the Commonwealth Superannuation Corporation Board. Under the changes, the Commonwealth Superannuation Corporation Board will be reduced from 11 to nine directors. The bill also includes two minor amendments to the Parliamentary Contributory Superannuation Act 1948. The first provides the Parliamentary Retiring Allowances Trust with the flexibility to pass a resolution without a meeting. However, this flexibility is subject to the trust first determining in writing that it may make decisions without a meeting and setting out the way in which trustees are to indicate agreement with proposed decisions. The second allows an actuary other than only the Australian Government Actuary to provide advice in relation to the Parliamentary Contributory Superannuation Scheme. The bill also corrects a misdescribed amendment relating to the Judges' Pensions Act 1968.

Once again, I thank members for their contribution and commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.