Sue Boyce (Queensland, Liberal Party) Share this | Hansard source

I also stand to speak on the package of superannuation bills. I imagine that most of my colleagues will know the abbreviation WTF. It is certainly one that I have had sent to me in the last couple of hours by people in the superannuation industry who are gobsmacked and shocked that the government thinks that the fourth tranche of superannuation bills should be dealt with in 65 minutes—four bills that would in other circumstances have had numerous hours of debate each are now being rammed together into a miserable 65 minutes. So, here we go: the Gillard Labor/Greens government is again treating this parliament with disrespect. As Senator Cormann pointed out, there were months of debate and discussions about this legislation in the House of Representatives, but could the government bring it here in a timely fashion? No.

The Senate, which is the House of review, is one of this parliament's great strengths, and here we have debate being guillotined again—four superannuation bills, all being done in a miserable 65 minutes; that is, about 13 minutes per bill. When the coalition was in control of the Senate between 2004 and 2007, there were 32 bills guillotined. In the three years since the Gillard Labor government has had the majority in the Senate, more than 215 bills have been guillotined through the Senate; that is, seven times as many. It is beyond bemusement that the Greens, who were so proud under Senator Bob Brown of their opposition to gagging debate, have turned into the lapdogs that they are. We as lawmakers are not being allowed sufficient time to properly scrutinise and debate these bills, and that just is not good enough. I understand the response of members of the superannuation industry. We are talking about legislation that will affect the future of every Australian employee. We have seen so many examples of poor drafting leading to unintended consequences, and this tranche is yet another of those areas.

The first of the bills listed, the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill, seeks to introduce the fourth tranche of MySuper legislation. It also makes a few of the government's changes flowing from the Cooper review into superannuation. The government has been forced to bring a raft of changes to its own legislation after it was introduced. Just think how much better this legislation could be if it were properly debated. Those changes followed on from the Joint Committee on Corporations and Financial Services, of which I am deputy chair, which held an inquiry and found many serious issues in this bill. This shabby drafting is not good enough because it increases market risk and has the potential to cause Australians to lose confidence in their superannuation. Australians have lost confidence in any promise that this government might make in relation to super, but there are concerns that they could lose confidence in the entire superannuation system with the chopping and changing, the promising and unpromising, that has gone on with this government. The coalition will be moving amendments to this bill, as Senator Cormann pointed out.

The Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill amends the Income Tax Assessment Act 1997 to provide income tax relief to superannuation funds where there is a mandatory transfer of default members' account balances to a MySuper product in another superannuation fund. As Senator Cormann said, all this red tape is caused by the government's inability to trust its own legislation. We support the change that this has brought about to ensure that members of funds which participate in mergers are not unnecessarily penalised through capital gains tax considerations.

The purpose of the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013 and the Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Act 2013 is to amend various tax and super laws to bring in some of the budget related announcements. Of course, these are some of the changes that have been brought on the government by the way it went about drafting this legislation and introducing it in the first place. Once again, we have process issues.

This government, having promised not to do anything to super, has steadily reduced the concessional contribution cap for those aged over 50 since 2007-08—all part of Mr Swan's class warfare, no doubt, because of the extraordinarily rich people out there who were going to retire in the lap of luxury, apparently! One of the things that I am surprised Ms Gillard and others did not point out to Mr Swan is that this reduction in the concessional contribution cap particularly disadvantages older women. Once women's children have grown up, once they have perhaps achieved some seniority after returning to the workforce, in many cases they have the first chance in their lives to build a real superannuation pot for their retirement. It is not while children are growing up. There is plenty of research showing that, in fact, working women are far more likely to put money into their children's needs and their spouse's needs, or their partner's needs, before putting it into their own superannuation by way of concessional contributions. So, congratulations to this government for making it even harder for older women to build their superannuation to the level where it could be useful to them! I would just point out that male workers retire with 32 per cent more in their superannuation accounts than do women, even though women, because they live longer, spend 45 per cent more time in retirement than do men. Yet this government was too short-sighted to see the damage that they were doing with their attack on concessional caps. With this being the last parliamentary sitting week before the election, at least the government cannot introduce any further changes to superannuation. The raft of ill-thought-through changes have seriously undermined confidence in the superannuation system.

Voluntary contributions to superannuation were as high as four per cent of Australia's total salary base prior to the GFC. Since then contributions have more than halved. Those opposite might suggest that this is because of the GFC. I would suggest that it is because of Australians' lack of confidence in their economy and their government. Whilst the GFC was a significant contributor to that slump, the industry says—and I think it is just common sense—that the continuing uncertainty around the changes to superannuation has accelerated that slump, and people continue to lose confidence in super. The leader of the coalition, Mr Abbott, has made a firm commitment on behalf of the coalition that, should we win government in September, there will be no more unexpected detrimental changes to our super system. That is a commitment that I am sure all Australians will approve of.

I would like also to speak briefly about recommendation 2.7 of the Cooper review, which Senator Cormann mentioned, which suggests putting an end to the equal representation on superannuation boards model. Recommendation 2.7 says:

For those boards that have equal representation because their company constitutions or other binding arrangements so require, the SIS Act should be amended so that no less than one‐third of the total number of member representative trustee‐directors must be non‐associated and no less than one‐third of employer representative trustee‐directors must be non‐associated.

For a government that is so keen to ensure that corporate governance in the corporate world functions well, it is beyond belief that it would not accept this recommendation as a sensible way of improving transparency and accountability and of improving confidence in the superannuation system. There is no reason whatsoever not to accept this except that, as Senator Cormann pointed out, the union masters have spoken to the government about how they want this to look and about how many cushy jobs as trustees on boards their union mates want. It certainly does not allow for independent directors to be included.

It is not possible for a union member to be on the board of a superannuation scheme where the member's funds go without there appearing to be the potential for a conflict of interest. I am sure many of those directors exercise their duties as trustees in the most honest and the fairest way possible, but there must always be the likelihood that people will see this as having the potential to lead to a serious conflict of interest. We cannot go into the 21st century with the huge amount of money—the trillions of dollars—that we currently have in our superannuation system without wanting it to be the most efficient and competitive superannuation system with the highest standards of corporate governance. That is the system that will deliver value for superannuation fund members. Continuing to improve corporate governance in the industry will also help to increase Australians' level of confidence in the system and their willingness to make additional contributions. Why would any superannuant currently make extra contributions, given that they have no idea what the government is going to suggest next? We will certainly be pushing yet again for that change to happen.

One change, at least, that the government has in effect accepted is our amendment to allow trustees of MySuper accounts to cap asset based administration fees. We had been intending to move amendments on this ridiculous situation where there was going to be no limit on percentage based fees on super accounts, no matter how large a super account balance was. We are pleased to see that the government has finally decided that it will see the sense of this and take it on board. There was certainly a serious, adverse reaction among industry stakeholders when the government first came up with this scheme. Stakeholders could not believe it. It is good that the government has finally allowed for greater flexibility in fees. If the government had persisted with what it was intending, a $500,000 superannuation account could have been charged an administration fee 100 times greater than that of a $5,000 account, if the fee had been based simply on percentages. Clearly, it cannot cost 100 times more to run a $500,000 account than a $5,000 account, so why would the government insist on doing that when it claimed that it wanted an efficient system, a system that delivered value for money to Australia's superannuants? Without caps Australians will have more in their super and they will end up with more money. So it would have been inherently unfair, inequitable and, as I said earlier, inefficient to have maintained the situation that they have.

The coalition continues to be concerned that it is 2½ years since the Cooper review was handed down, and yet only some of the Cooper review has been implemented. The government has haphazardly implemented many of the findings of that review. We have tried to improve it along the way, and I think that we have made some very sensible improvements. But it is just beyond belief that this legislation is being be pushed through in the way that it currently is.

It is also interesting that, to date, this Labor government has hit Australians with nearly $9 billion in increased taxes and charges on superannuation over the last five years. Nine billion dollars has come out of superannuation accounts, which would not have come out of superannuation accounts if this government had held its promise to maintain super—not to fiddle with or change super.

We have begun consulting with a broad cross-section of senior superannuation industry stakeholders and experts, and we certainly will not be making any changes that could harm the superannuation system in Australia. We will certainly not be doing anything that will cost Australian superannuants a cent. We plan to increase the compulsory superannuation contribution from nine per cent to 12 per cent. We will be improving corporate governance arrangements. The first improvement will be around independent trustees.

We will properly address the issue of excess contributions to make sure that Australians who are saving for their retirement are not unfairly penalised for genuine unintended errors. What a farce that little effort has been from this government!

A coalition government will also pursue opportunities to cut unnecessary red tape. I think if we looked at the first, second, third and fourth tranches of the superannuation legislation we would see that at least a quarter of it could quite easily be removed so that people do not have this ridiculous situation of being second guessed by unions or by the government in every aspect of their superannuation.

A potential coalition government will also remove regulatory barriers currently restricting product innovation and improved options to manage financial risks in the retirement phase. We will revisit the concessional contribution caps and super co-contributions for lower income earners once the budget is back in a strong enough position.

As I said, we have already begun talking to the industry, and we will conduct a financial systems inquiry, which will include the superannuation industry, so that it becomes part of the financial system, not something tacked on and changed at the whim of the union movement or when the Treasurer needs desperately to scrabble around, as he did late last year, to find a surplus. It will be done in a coherent way.

I would expect that it will include looking at the terrible impacts that this government's changes to the concessional caps have had on women. Women have 35 per cent lower median balances in superannuation than men, and nothing has been done to assist them to improve this situation. There have been all manner of suggestions made—even by the Australian Institute of Superannuation Trustees—but all of them have been ignored by this government because the government's spending in other areas has meant that they could not help older, retiring women.