Stephen Jones (Whitlam, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That this House notes:

(1) the purpose of superannuation is to enable Australians to save for a dignified retirement;

(2) superannuation has made an enormous contribution to converting Australia from a nation that borrows to a nation that lends, creating a pool of funds to invest locally and abroad;

(3) Australia is the 16th largest economy in the world, but because of universal superannuation has a pool of savings owned by Australian workers worth $2 trillion, which is the fourth largest pool of retirement savings in the world;

(4) before universal superannuation, 68 per cent of Australians and 85 per cent of all women had no retirement savings;

(5) the average superannuation balance at retirement is now approximately $160,000 for women and $280,000 for men;

(6) under current policy settings, the median balance on retirement for full-time workers will be $310,819 for women and $628,634 for men;

(7) over the past decade the average rate of return has been between 6 and 8 per cent—last year it grew by 9 per cent and Australia was among only a handful of countries that saw pension fund growth; and

(8) superannuation is critical to Australia's economic growth and resilience and must be strengthened so it can play a pivotal role in Australia's economic recovery from COVID-19.

Today is 30 days since the government received its report into our retirement income system, an urgent report that they said was going to provide the factual basis on which future policy would be determined. It's 30 days, they're sitting on it and they won't release it. Yet, at the very same time, we've got this sanction revolt from government backbenchers out there trying to pull the superannuation system down and the remarkable spectacle of the Prime Minister thinking out loud about how he might cancel the legislated arrangements for superannuation—legislated arrangements for superannuation that he went to the last election promising to keep intact. Not just once but 22 times since the last election the Prime Minister and senior government ministers have repeated that promise, and yet, here we have this sanctioned revolt of the dirty dozen, those baby-faced Liberals out there, trying to pull down the superannuation system for no other reason than it wasn't their idea in the first place.

Australia's superannuation system is the envy of the world. It consistently appears in the top three of funded pension or superannuation systems when compared to countries all around the world. It is providing us with a $3 trillion savings pool that is available for investment in Australia and overseas. And haven't we needed it over this year—whether it's recapitalising listed companies, whether it's providing emergent release for households, whether it's ensuring that we can be investing in the recovery, patient capital, investing for the long-term? And won't it be absolutely critical to the future economic development of this country as we make our way out of the COVID crisis? But those guys over there are like the Taliban in blue suits. They want to blow it up because it doesn't conform to their religion. We will resist it.

Today we saw the figures from APRA. We saw that $32 billion has been withdrawn from this problem-plagued early release scheme. A lot of that money has gone to households in desperate need, and we welcome that and we support it. But, day after day, scandal after scandal, we are finding out that a lot of that money has not been properly accessed. I don't blame the individuals; I blame this hopeless government. I blame this hopeless government for the scheme that they have set up which has led to over 600,000 Australians, most of whom are under the age of 35, completely wiping out their retirement savings. Those opposite laugh and giggle. They think it is funny. Those of them with half a brain in their head wriggle awkwardly in their chairs because they know as well as we do that we set superannuation up for a purpose.

In the 1980s, when we started on this journey, the ratio of retirees to workers was one in seven. Ten years ago, it was one in six. Today, it's one in four, and rapidly approaching one in three. Let me repeat that: for every retiree, there are three taxpaying workers in the workforce. Who's going to pay for the future pension system? The answer from that mob over there is, 'Don't worry about it; put it on the bill. The grandkids will pick that up.' Well, Australians deserve better than that—better than putting it on the bill for the grandkids to pick up. We've burdened the grandkids with so much—debt approaching $1 trillion and wiping out a generation of superannuation retirement savings. And, after that, what do those opposite say? They say, 'Let's cut the increases.'

These smug, smart backbenchers will leave this debate and go back to their offices. They'll stick their feet on their desks in the comfort and the knowledge that they'll continue to take home 15 per cent in superannuation. But the people who come in quietly and clean their offices and walk around them saying, 'I'm sorry, Sir; can I just get that bin?' get nine per cent. So when you get back to your offices, I ask you to look those cleaners in the eye and tell them, 'I am worth 15 per cent but you're only worth nine per cent.' I dare you. The people of Australia will not cop it. We will fight to preserve our superannuation system for the good and the dignity of those people and for the future of the country. (Time expired)

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

Is the motion seconded?

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Financial Services) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

Whilst I quite like the member for Whitlam—given that he was one of the class of 2010 and we acknowledged our collective anniversaries last Friday—I think in this last 10 years he's also spent a bit of time at acting class. That was a very good performance but, as usual for those opposite, it lacked any substance. And, as usual with those opposite, what you do is you don't listen to what they say, because it usually has nothing of value; you look at what they do. That's the difference. They do very little. They talk a lot and do very little.

But this government, since we've come to government, has been delivering. We've been delivering on a transparent, competitive and efficient superannuation system which, as the member for Whitlam quite rightly pointed out, very successfully underpins our economy, and also underpins people's wealth creation and their planning for retirement. We're focused on ensuring that Australians can reap the full benefits of that superannuation system, and ensuring that members of our super funds and everyday Australians are a priority at the forefront of all decision-making processes with respect to superannuation.

That's why, since we've come to government, we've passed legislation to improve the efficiency through strengthening the powers of the regulator to deal with underperforming funds. We've capped fees on low-balance accounts, which has helped around seven million Australians to save around $570 million in fees in the first year alone. We've banned exit fees on all superannuation accounts, and for the first time ever the ATO has the power to proactively unite low-balance, inactive accounts with active accounts. This has seen the ATO proactively reunite almost 2.53 million accounts with almost $3.2 billion in savings.

This government, surprisingly to the member for Whitlam, won't be supporting this motion and allowing the member for Whitlam to distil a complex issue down to simple sound bites, as those opposite usually try to do. We know that the issues are more complex. Instead, we're focused on delivering a better superannuation system for everyday Australians. I'm talking about those people who work in our local schools, in our local small and family businesses, like Beenleigh Glass or Luv a Coffee, or on the production lines at places like Teys Australia in Beenleigh or ATP Science at Loganholme. It's these people, these everyday Australians, who now have 9.5 per cent of their wages effectively foregone, going into superannuation, because that was part of the trade-off for setting up super and future increases as well. We want to see them enjoy a dignified and comfortable retirement.

This week, we're getting on with the job of delivering for the Australian people. In the Senate we'll resume debate on the your super your choice Bill. This bill will provide choice of fund for more Australians employed under federal enterprise agreements and workplace agreements. I note that those opposite who have just waxed lyrical about the importance of superannuation for five minutes, and particularly the member for Whitlam, made no mention of this piece of legislation. It is a piece of legislation that this government has introduced to ensure that working Australians have genuine choice of superannuation fund.

I've spoken plenty of times in this place previously outlining the impediments to Australians who, under workplace agreements or other industrial instruments, do not have a choice of fund. If they believe in choice and they say that people should be free to choose, support this legislation, Member for Whitlam as the relevant shadow minister. He has made no commitment here in this place today. As I said at the outset, don't listen to what they say; have a look at what they do. If they genuinely believe in choice of superannuation and the importance of superannuation, back this legislation in the Senate and let Australians have true choice of their superannuation funds.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Financial Services) Share this | Link to this | Hansard source

Superannuation provides Australian workers with a dignified retirement. It's a worker savings scheme that allows Australians to own their own home and to live comfortably in retirement without having to rely on a government pension to get by. It is really about the government saying thank you to Australian workers for your hard work in building the economic wealth of our nation. It's the government saying, 'You worked hard for our nation and we'll support you through a savings tax concession so that you can save for your own retirement and have a good life in your elderly years.'

The Australian superannuation system has been remarkably successful in achieving that goal, for which it was planned. That's evident in the fact that Australia has the 16th-largest economy in the world, but we have the fourth largest pool of retirement savings of any nation in the world. It's also evident in the fact that before universal superannuation 68 per cent of Australians—and 85 per cent of women—had no retirement savings whatsoever. Now, because of compulsory superannuation, the average superannuation balance at retirement is approximately $160,000 for a woman and $280,000 for a man.

But you don't need to worry about the stats, Deputy Speaker—just ask any Australian worker who's worked all of their working life with voluntary superannuation contributions and compulsory super contributions. Ask them about the benefits of a superannuation system allowing them to retire with dignity and respect and have that reward for their hard work over all of their working years. Labor built that superannuation system that I'm referring to.

For all of those reasons we're justifiably proud of the system that we put in place, in providing that support for workers to retire with dignity. We will defend it to the hilt, because of the fact that it provides Australian workers with retirement savings so that they can live with dignity and respect in their retirement years. The Australian superannuation system—that dignity and respect that I've spoken of—is now under attack by this government, and the future dignity of Australian retirees is at risk.

We've known for a long time that the Liberal and National parties don't support compulsory superannuation. They didn't vote for it when it was established. When they were last in government they put a stop to increases in the compulsory rate of savings under superannuation. They've always attacked superannuation when they've had the opportunity in government, and they're attacking it again. But this is no ordinary attack. This is a full-on double-barrelled attack on superannuation in this country, through the early-release scheme, encouraging people to raid their superannuation savings. Again, those on the back bench—and some of the ministers now—are out there freelancing and saying that we should be increasing the compulsory rate of superannuation savings in this country.

Labor will fight this double-barrelled attack on superannuation. We'll fight to defend Australian workers' rights to retire with dignity under our superannuation scheme. We'll fight to ensure that Australian workers retire with a decent balance in their superannuation balances, particularly those disadvantaged workers who we know, under the current scheme, will not retire with adequate savings. I'm speaking, of course, of low-paid workers and women in Australia.

The early release scheme has been a disaster. We've seen it subject to fraud. It had to be shut down because of fraud and the AFP investigations that were undertaken. We've seen that 40 per cent of people who've accessed their super and raided it early have had no drop in their income, and, of those who did, 10 per cent spent it on gambling! Those opposite will say, 'This is their money; they can do with it what they like.' It is their money, but it was established to provide them with dignity in retirement not to whizz up against the wall on gambling and alcohol under an early release scheme that's been poorly designed and allows people to raid their superannuation.

Labor will fight to ensure the integrity of our superannuation system. We'll fight to ensure that these legislated increases, these guaranteed increases, are met by this government.

Anika Wells (Lilley, Australian Labor Party) Share this | Link to this | Hansard source

During my first speech in parliament I spoke about wanting to be a good ancestor, and I rise today to keep that promise and fight against the Liberal and National parties' incessant attacks on superannuation, attacks that are incredibly short-sighted and, possibly, are one of the greatest acts of intergenerational theft that my generation will see from a federal government.

To kick off 2020, the Morrison government passed a bill that retroactively legalised the theft of superannuation payments from workers, allowing bosses who have ripped off their workers to get off scot-free. That is an actual problem that they should be addressing—not these problems that Liberal backbenchers are freelancing about in the media.

Then, they dropped the drawbridge on superannuation, allowing desperate and vulnerable people to take out up to $20,000 from their super. And what's next—talks of scrapping the legislated superannuation guarantee which would not only be an immediate pay cut for workers but would guarantee them less money in retirement. We shouldn't be surprised because a war on superannuation is in the LNP DNA, and they've been slinging around the line that people should have the right to do what they want with their money. To a point, they're right. We can't blame people for having to prioritise having to get by each day at the expense of their future financial security. People have lost jobs. People have lost benefits. And during the worst economic crisis since World War II, with record high unemployment, these losses are much more frightening. But what I cannot tolerate are a government who sit by and watch people drain their own retirement savings whilst patting themselves on the back for the support that they are giving these people when more money has been drained out of superannuation accounts than has been paid through JobKeeper to date.

The data which shows what people are spending their superannuation on is heart breaking. Fourteen per cent of men and 15 per cent of women are repaying debt, and 13 per cent of men and 15 per cent of women are buying food. Think about that—having to take money out of your super to pay for groceries. Around 2.7 million people have so far withdrawn a total of $33.3 billion, and almost 500,000 of those are people aged under 35. So after taking into account inflation and cost of living, a 25-year-old who withdraws $20,000 now will be between $80,000 and $100,000 worse off in retirement. A 35-year-old who withdraws $20,000 will be at least $65,000 worse off. Industry analysis has shown the aggregate loss of savings for Australians under the age of 35 is collectively $44 billion.

At the same time the Morrison Government were watching hundreds of thousands of young people raid their own super, they have announced that the minimum pension drawdown rates would temporarily halve for the 2019-20 and 2020-21 financial years, assisting retirees who do not wish to sell their investments, while the value of those assets is reduced. Our lowest paid and most financially vulnerable people should not have to fund themselves through a pandemic while so many handouts are going to far more wealthy people who will never have to touch their retirement savings. The decision to protect one generation at the expense of another is one of the greatest acts of intergenerational theft of our time and will leave permanent scarring once this pandemic is over.

Generational progress in living standards has been the happy dividend of Australia's strong economic performance since the Second World War. Children could expect to be substantially healthier and wealthier and better housed than their parents at the same age. But this generational progress, the covenant of trust between generations, can no longer be taken for granted. The wealth of households under 35 has barely moved since 2004. Millennials are earning about 20 per cent less than our parents did at the same age when you adjust for inflation. Younger Australians are much less likely to own a home than their parents at the same age. Poorer, younger Australians have gone even further backwards and, now, the great public bargain that ensures workers will not retire in poverty is under attack.

I have spoken to constituents who know what it's like to live in poverty in retirement because they retired without super. A 71-year-old man from Zillmere came to chat with me at a mobile office about his experience. An oil rigger and labourer for most of his life, this man did not own his own home, was living in social housing and struggling with rising electricity costs, relying solely on the aged pension. I also spoke to a nurse who lost thousands of dollars in superannuation because of the Abbott government's decision to scrap the mandated increase to superannuation back in 2014. I wonder what she will have to say about the deliberations to scrap the 2021 rise? If we do not strengthen and protect superannuation and, instead, let this government tear it to pieces, our Australian covenant of trust that one generation will look after the next stands to fall.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Lilley for her erudite comments, as always. The problem with the compulsory superannuation guarantee that the Labor Party is so desperate to force upon the Australian people is that it will make them worse off. So why do the Labor Party want to make workers, ordinary Australians who are struggling to make ends meet, worse off?

Could it be the tens of millions of dollars that they receive in donations from industry super every single year?

It isn't just me saying this. This is the Governor of the Reserve Bank of Australia saying that Australians will be worse off. Labor is in favour of making Australians worse off so they can get more donations for their political party. It isn't just me saying this. It is, indeed, the Grattan Institute—an institute that I never thought I would ever call upon to bolster a public policy argument. They say that Australians will be worse off, and yet the Labor Party, as an honourable party in favour of workers, want to make them worse off. Would it have anything to do with the tens of millions of dollars that the Labor Party get in donations, laundered through the union movement, every single year? It's not 30 pieces of silver—you have to give them that! They're not cheap! They'll only ask for tens of millions of dollars.

Then we move on to maybe the one department in the entire federal Public Service that knows something about this. What does Treasury have to say about this? Treasury says that Australian workers will be worse off. But the Labor Party is an honourable party which believe in standing up for Australian workers. No they don't! They believe in standing up for the tens of millions of dollars that they receive in donations from industry super every single year, laundered through the union movement, and they're happy to make Australian workers worse off.

The shadow minister is scurrying from this Federation Chamber! He drops this motion like a stinking dead cat on the table and runs away the minute the facts come out. And it's not just me saying this. In fact, it's the industry superannuation association itself. Bernie Dean, as we know, is a financial expert. How do we know that? Because he pays for advertising to tell everyone that—that he's a financial expert—and because ASIC doesn't do anything when he advises young Australians that they would be better off keeping their money in accounts that are being chewed up in the fees of fund managers and his very members. But he sits on a piece of research that shows Australian workers will be worse off if the compulsory superannuation guarantee goes up. And what does he have to say? Well, the Labor Party is an honourable party that believes in supporting Australian workers.

But they don't. They believe in looking after their donors. They believe in putting their donors ahead of ordinary Australians. And why do they believe this? Because it's worth tens of millions of dollars to them every single year. This side of the House wants to stand up for Australian workers. It wants to see them have real wage increases and wants to see them have hope and opportunities for financial security in their retirements. Those on that side of the House want to make sure that their donors continue to get as much money as they possibly can and, indeed, they will force people—force Australians—to do so. Shame on them and shame on their leadership for allowing this to go on and for not looking after Australian workers!

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

It's really topical to talk about this important resolution on superannuation because all in this chamber take retirement security very seriously. In fact, it was one of the key issues that I focused on in the lead-up to the last election—people may recall that. This side of the chamber wanted to make sure that as many Australians could be independent in their retirement as possible. The other side of the chamber put forward a great big new tax on Australian retirees. A million Australians would have lost a third of their income overnight had there been a change in government. At the time they mocked and ridiculed us providing a platform for those Australians to stand up and give a voice and a face and human experience behind their sinister agenda. It was only after the election it became completely apparent to them just how many low-income Australians would've been pushed below the poverty line had they been elected to government. They would've discarded the interests of millions of Australians and their economic welfare at a vulnerable stage of life. That's why they sit on the opposition benches.

When it comes down to it, we all think superannuation has a place. Despite the dishonesty of some members, we believe that super has a place, that retirement saving has a place. Remember, I supported that very strongly at last election when they did not. We also should have an honest conversation about what delivers retirement security. To the opposition, retirement security is about as much money being given to their mates as possible. It defers and reprioritises life choices—for young Australians in particular—from the most important vehicle that you can provide for security in retirement, and that's to buy your own home. It is patently absurd that we as a society force a 20-year-old to save for retirement 50 years in the future when they cannot afford that 10 per cent of their wages to save for a deposit to buy a house today. The reality is that owning your own home is by far the most important vehicle for retirement security. If you cannot secure your own home, you are exposed to ever-increasing rental prices at a stage when you can't earn more income. It's been clearly shown by research institutions that homes are the most important thing. Home ownership is the most important thing to retirement security, not having a large super balance. If we don't have a large superannuation balance, we can at least support it through the pension. And we do.

We know why those on the other side of this chamber so unendingly prosecute the case to increase super contributions. As the member for McKellar just outlined with the wisdom of 50 years experience, they do it because the money goes to the funds that their mates control. They don't care about the retirement security of Australians. They care about themselves and the money that is laundered through those funds directly through to the Australian Labor Party. When it comes down to it, you sit here and you make the case about why you support that system. It's because it benefits you at the expense of Australians and their wages. This isn't just my opinion. It's the opinion of the Governor of the Reserve Bank of Australia, who recently said in front of the House Economics Committee that if you increase the cost of the superannuation guarantee it will cost the wages of Australians. It will also cost the jobs growth of Australians. At this critical time, now you want to trade off your own interests against the Australian people and harm the job creation and job opportunities that they need right now. As the member for McKellar outlined, the Grattan Institute, the Treasury, the Reserve Bank of Australia and ACOSS all understand this. There's only one group that doesn't seem to, and it is those people who sit on the other side of this Chamber and the people who manage the funds who will get the benefit. It is the greatest vested interest argument I have ever seen at the expense of the Australian people—at the expense of their home ownership, at the expense of their retirement secure, at the expense of their jobs and opportunity today.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

There we have it. If we need any illustration of where the Liberal Party stands on superannuation, that speech tells us. They are not the party of superannuation. They want to condemn Australian workers and young people today to a retirement in poverty. That is what they want. Superannuation is the vehicle to a retirement of security, to a retirement where people who have worked all their lives can look forward to something at the end of their working lives and not have to beg and scrape like they would under these people opposite. The member for Goldstein comes to this Chamber and makes out he's the workers' best friend. All it needed was him in a hi-vis vest and hard hat to complete the charade! He makes out he's the workers' best friend. He's the same bloke who was very happy to see penalty rates cut for young people just last year and the year before. If he wants to see young people get ahead in life, stop cutting their penalty rates. That would be a start.

Labor is the party of superannuation. Labor built superannuation and we are proud of it. Superannuation works. It works on the magic of compound interest. You need to start saving early in life. The longer you save the more you will have saved at the end of your life. What those opposite are doing is raiding super now. We've seen this happen throughout the last few months. So many Australians have raided their super—some of them because that's all the government would let them have, in terms of assisting them to get by. They've raided their super and have got zero dollars in their accounts. They have to start all over again. The $20,000 they are getting this year and next year is going to cost them $100,000 by the time they get to retirement. They will have to go onto the aged pension. Some of them will have to sell their homes, which those opposite say are so important, to get by. Superannuation works by compound interest. We know those opposite support superannuation, because all their friends in big business and corporate Australia and senior levels of the Public Service have been enjoying the benefits of superannuation for decades. What they don't like is the fact that Labor came along in the eighties and nineties and said, 'How about we extend the benefit of superannuation to all workers, not just the privileged few?' That is what they don't like. They don't like the fact that Australian workers—ordinary workers, bank workers, supermarket workers and tradies—have all got access to superannuation. They don't like it.

Superannuation is the path to a retirement of prosperity and comfort, and Labor are determined to protect it. What we've seen in the last few months is that one in seven Tasmanians have taken around $587 million from their superannuation accounts as a result of the changes those opposite brought. I'm not laying one iota of blame or responsibility on the people who have accessed their super. I know a lot of people are doing it very tough at this point in time and they saw that $10,000 that they were given access to as a lifeline. The reason it's a lifeline is that those opposite have failed so miserably in providing for people in what is a shared global pandemic, a shared disaster. They've said, 'You're on your own. If you want to keep going over the next few months, raid your own super, raid your own retirement savings. That's what you need to do.' The reason people have had to access the $10,000 is that there was nothing else for them. I don't blame people for making use of the super that was made available to them, but the costs are going to be borne in the decades and generations to come. Ten thousand of those accounts in Tasmania have been drained to a zero balance. They have to start again. By and large, these are workers on lower incomes and a lot of them are women. We know that women, throughout their working lives, have a more fractious relationship with super. They will retire with a lot less and will be dependent on the aged pension for much longer in life. These are all the things we have been trying to avoid over the last few decades.

Superannuation is a success story in this country. It's a massive reserve of capital. What I took great exception to was the member for Goldstein calling this laundering. It is the superannuation holders who are the beneficiaries of superannuation. They put money in and they get money out at their retirement and have a retirement of comfort. We are the party of superannuation and we are damn proud of it.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired. The debate is adjourned and resumption of the debate will be made an order of the day for the next sitting.