Mary Fisher (SA, Liberal Party) Share this | Hansard source

I wish to comment on the Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 and Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 report, and in particular the observations made by coalition senators in their dissenting report. I want to focus on a couple of aspects of those comments, and I quote:

Current arrangements where default funds under modern awards are selected by Fair Work Australia are not transparent, not competitive and inappropriately favour union dominated industry super funds.

The continuation of those current closed shop anti-competitive arrangements for the selection of default superannuation funds is a national disgrace.

In the lead-up to the last election the government was shamed into promising a Productivity Commission inquiry to address the anticompetitive aspects of its decision to hand to Fair Work Australia the power to approve default funds.

Very disappointingly, it has taken the government more than 18 months to commission the inquiry from the Productivity Commission, which we now understand will take the best part of this year.

The coalition senators go on to say:

It is clear that the Minister for Workplace Relations and Superannuation has been intent on protecting the best interests of his friends in the union movement for as long as possible.

Those observations are even more pertinent given the recent increases announced to the compulsory superannuation guarantee levy to start from 30 June this year and to be phased in over the next eight years to 2020, rising to some 12 per cent by that time. It is particularly interesting given that the same minister, Bill Shorten, has reportedly given up on trying to say the minerals resource rent tax will pay for the superannuation increases. Of course it will not pay for that. All it might do, if the government raises enough money with it, is compensate for the tax revenue that the government will not reap because of there being more money put into super, which of course attracts a lower tax rate than if that money were paid in another way. He has realised that that decoy does not work anymore, so he has essentially been forced to say, 'Forget about it, my union mates. Forget about employers funding this increase from nine per cent to 12 per cent.' He is saying to his friends in the union movement that workers will have to fund these increases over time by agreeing to defer part of what would otherwise be their annual wage increases from now until 2020 and that those deferred wage increases will have to be worked out between employers and employees during wage negotiations.

That is pretty interesting, because his colleagues in the lower house certainly were not up to speed when, for example, Labor's MP for Canberra, Gai Brodtmann, did her doorstop interview on 21 March. She was talking about the mining resources rent tax. She said:

… it’s also the superannuation benefits to 8.4 million Australians. So there’s significant knock on effects and benefits from this tax and bring it on, I say.

I have to warn you it is excruciatingly painful to get to the end point of this interview. It continues:

QUESTION:

That superannuation is paid for by the businesses, it’s not paid for by the Government.

GAI BRODTMANN:

Well the superannuation will be, in terms of how it is paid for, will be discussed in enterprise agreements over coming years. It’s going to be phased in over time and it will be subject to those enterprise agreements.

There are then some inaudible questions, and then there is a further question:

But that superannuation isn’t coming from the miners. It’s coming from those small businesses that you say need the help.

GAI BRODTMANN:

Those discussions will be held over time once it’s phased in.

QUESTION:

What does that mean, sorry?

GAI BRODTMANN:

That the discussions on the superannuation and how that actually is introduced will be discussed over time and phased in over time and it will be discussed in the course of enterprise agreements.

QUESTION:

So you’re suggesting there might be another alternative to the small businesses paying that themselves?

GAI BRODTMANN:

No. What?

There are some more inaudible questions, and then there is a question about:

The instant tax write-off because they do have to pay superannuation themselves and most small businesses are likely not to benefit from the tax cuts.

There is then some discussion about related issues, but—ah—we return to the superannuation:

GAI BRODTMANN:

Discussions in terms of how the superannuation is going to be introduced and phased in over time?

QUESTION:

[Inaudible]

GAI BRODTMANN:

That’s right.

QUESTION:

So what are these discussions?

GAI BRODTMANN:

The discussions between employees and employers.

QUESTION:

If the employers have to pay it, what are the discussions [inaudible]?

GAI BRODTMANN:

No, the discussions between how it is actually, how it is going to be introduced, those discussions need to be held between employees and employers.

QUESTION:

So eventually they’ll need to pay it.

GAI BRODTMANN:

The, but the discussions need to be held between employees and employers.

QUESTION:

But do you think that these discussions could lead to changes to the legislation?

GAI BRODTMANN:

I’m not aware of that.

QUESTION:

So why would small business need to have discussions though? To still discuss this policy?

GAI BRODTMANN:

No, I’m talking about. No. Let’s just … Let’s leave it at that. Yep. Next question?

You might think that is the end of it, but no. We keep going:

… when it is being introduced, when, how [inaudible]?

GAI BRODTMANN:

That’s right.

QUESTION:

You’re not sure these discussions …

The rest of the question is inaudible, and then there is a further question:

Are the discussions more between the employer explaining to the employee …?

GAI BRODTMANN:

That’s what I’m saying. The discussions needs to be held in terms of the employees and employers in the enterprise agreement context.

QUESTION:

But whatever is the result of those discussions in the end, the employer must pay 12 per cent superannuation.

GAI BRODTMANN:

Well, it’s increasing from nine per cent to 12 per cent, so …

QUESTION:

And they’ll pay for that.

GAI BRODTMANN:

That’s the scenario.

Well, hallelujah! Gosh, that was like getting blood out of a stone. So Minister Shorten obviously had not told his colleagues of his plans that, no, business will not pay; workers will have to sacrifice by deferred wage increases over time—which is, of course, what must happen because, as has been indicated by colleagues of mine in the lower house, it is obvious that, if businesses are required to pay for these increases, they are ill placed to afford them. But Minister Shorten is going to have to stare down his colleagues in the union movement, which this report has found that he is intent on protecting as far as superannuation goes. He is going to have to stare down the likes of Tony Sheldon, who says that:

… the long phase-in period meant "any business worth its salt" should be able to manage its affairs to pay increased wages and superannuation.

He is going to have to stare down his not-so-much mate—but he is going to have to talk to him—Dave Oliver if he becomes head of the ACTU. Mr Oliver apparently warned on Tuesday night that the union movement saw the increase in the super guarantee as an entitlement, not a salary sacrifice. If Minister Shorten really means what he says, he is also going to have to tell his mate Paul Howes from the AWU, who says his union has no intention of defraying its wages claims because of increases in the super levy. He said, apparently, that the issue had not been raised with him by a single CEO or a single IR manager because the increases were small and over a long period of time. You have to be kidding! Does Minister Shorten really mean that the increase will have to be factored into future wage negotiations? Does he really mean what he told 3AW:

I can't see that business will be paying any more in the future than they otherwise would have been if the superannuation changes hadn't gone through … But what I do recognise is that a portion of what would have been employees' increases will go into compulsory savings, which is concessionally taxed.

He then said—and this is the giveaway:

… that he expected union leaders would attempt to obtain the best possible outcomes for their members.

Stop speaking with a forked tongue, Minister Shorten. You are no workplace relations novice. You know damn well how it works, and you know damn well what you have to do to keep your union mates to the promises that you have made that the superannuation increases will be paid for over time by deferred wage increases. You know damn well that you will have to amend your Fair Work legislation to require both modern awards and any workplace agreements from here on to reflect that deferred wage increases will have to be, and can only be, the only way to pay the increases in the superannuation guarantee contribution starting from 30 June this year, rising from nine per cent to 12 per cent. If you mean it, legislate it. I seek leave to continue my remarks later.

Leave granted; debate adjourned.