Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

As I mentioned to the Senate yesterday, the coalition support this bill. The reason we support this bill is that we support anything that makes our superannuation system more efficient, more transparent and more competitive. Unless we have the most efficient, the most transparent and the most competitive superannuation system possible, investment returns for superannuation fund members across Australia will not be maximised. Ultimately this is what superannuation is all about: giving Australians a vehicle to use to work towards achieving self-funded retirement.

What we are concerned about is that, unlike the good measures which we support that are included in this legislation—even though, as I expressed yesterday, we had some queries around some of the cost recovery arrangements, but leaving that to one side—in many other areas in relation to important and necessary superannuation reform this government in general and the Minister for Financial Services and Superannuation, Minister Shorten, in particular have been very slow and very unenthusiastic to act.

The other thing we need is the highest corporate governance and transparency standards possible. We need genuine competition in the default superannuation market. We need to make sure that Australians who make additional efforts to contribute additional savings to their superannuation do not get disproportionately penalised when they make inadvertent errors by making excess contributions to their superannuation savings. There is a whole range of areas where we need reform and where the minister has been very slow and very unenthusiastic to act.

When it comes to the completely inappropriate closed-job anticompetitive arrangements with which default funds under modern awards are currently selected by Fair Work Australia, we of course understand why the minister has been so unenthusiastic to act: he is clearly conflicted when it comes to doing the right thing in the public interest by ensuring that all Australians can benefit from genuine competition in the default market, because he is very close to the vested interests of one particular segment of the superannuation market. This really is of very significant concern because in the lead-up to the last election even the Labor Party was shamed into making an election commitment, which was a promise, to ensure that there would be a more open, transparent and competitive process to select default funds under modern awards.

In the lead-up to the last election the Labor Party was shamed into the acknowledgement that the current process is inappropriate, that the current process is a closed-shop anticompetitive arrangement that needs to be fixed. But of course here we are, two years since the last election, nearly two years since that commitment was made, and not one single policy, not one single law, has been changed to ensure that all Australians, including those that find themselves in default fund arrangements, can benefit from genuine competition in the default fund market.

In January or February this year Minister Shorten and the former Assistant Treasurer, the short-lived Assistant Treasurer, former senator Mark Arbib, did commission a Productivity Commission inquiry into this whole issue—finally. That inquiry is expected to deliver an interim report shortly and a final report in about September or October. Mr President, I am prepared to bet with you now that this side of the election Minister Shorten will do absolutely nothing to fix the absolutely disgraceful closed-shop anticompetitive arrangements which are inappropriately favouring one segment of the superannuation market right now. He will do absolutely nothing to fix that this side of the election. What we really would like to see is Minister Shorten and the government building on the measure in this particular bill and actually taking a leap forward to ensure that our superannuation system truly is the most efficient, the most transparent and the most competitive possible. I will run through a number of measure that the coalition would pursue in government in a moment.

Before I do, let me bring the attention of the Senate to some research into our super system conducted by the ATO, the Australian Taxation Office. That research found that only 45 per cent of Australians have confidence in their ability to make informed decisions about their super—that is, 55 per cent of Australians do not have sufficient confidence in their ability to make those informed decisions. The ATO research also found that, after more than four years of constant chopping and changing and increased taxes on superannuation by Labor in government, 43 per cent of Australians do not have any interest in super and 69 per cent have no knowledge about the government's latest proposed changes.

I pause here for a moment. Most of you would remember that in the lead-up to the 2007 election, when the member for Griffith was the Leader of the Opposition and was running to become the new Prime Minister, he made a commitment to the Australian people that he would not make any change to superannuation arrangements in Australia—'not one jot, not one tittle', he said. No doubt he thought of the arrangements that had been put in place by the Howard-Costello government, including generous concessional contribution rates and making superannuation returns tax free for anyone who takes out their super after 60 years of age. A whole range of very beneficial changes were made by the Howard-Costello government, and Mr Rudd, the member for Griffith, at the time promised that he would not make any change to the superannuation arrangements—'not one jot, not one tittle'.

That was important because one of the things that Australians are sick and tired of is this constant chopping and changing in taxation arrangements in relation to superannuation. We have had a lot of that from this bad government. We have had a lot that from the high-taxing government currently sitting on the benches opposite. For example, they have progressively reduced concessional contribution caps, from $50,000 and $100,000 all the way down to $25,000. What people often do not realise is that that $25,000 concessional contribution cap also includes the compulsory superannuation component, which of course means that people who are working multiple jobs can quite easily inadvertently breach that cap. And quite a number of people have breached non-concessional contribution caps, with very disproportionate penalties imposed by the ATO as a result. I am led to believe, and I think the minister has conceded this point publicly, that even the minister has been caught up by, I assume inadvertently, breaching contribution caps. So it is an issue that he should have a lot of personal knowledge about and an issue that he should have fixed long ago.

The coalition's view is that Australians who are doing the right thing, who are doing everything they can to work towards achieving self-funded retirement and making sacrifices to achieve that goal, should not be penalised disproportionately when they make clearly inadvertent errors. Errors are also sometimes made because of circumstances beyond people's control—for example, because employers make a mistake, because super funds make a mistake or because, in the context of multiple employers, people have lost sight of what each individual employer is contributing.

The point I am making is that there are a lot of areas in superannuation that need to be fixed. The minister ought to be congratulated for this legislation. It is legislation that has our bipartisan support right from the outset because we support any measure that improves transparency and efficiency in the superannuation market. But we do think there is a whole range of other areas that need fixing—in particular the closed shop anti-competitive arrangements in the default fund market; the corporate governance and transparency standards, which Minister Shorten has been very slow to act on, despite recommendations from the Cooper review; and this whole issue of excess contributions. With those few words on behalf of the coalition, I commend the bill to the Senate.