John Williams (NSW, National Party) Share this | Hansard source

I would like to contribute to the debate on this superannuation bill, the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2013, and related bills. I simply do not trust the government when it comes to superannuation. I will give you an example. When I came to this place in 2008, at the age of 53, I had a total of $1,650 worth of superannuation—not much for someone of that age, but that is from farming and small business. I salary-sacrificed a lot to build that superannuation up. I contributed a couple of years ago up to the maximum of $50,000, with the employer contribution and my salary sacrificing.

Now we have a situation where the government has taken those total contributions from $100,000 down to $50,000 and then down to $25,000. So this year, of the $6,000 or $7,000 of super I will be paid, I will pay 46 cents in the dollar in tax. At the age of 58 I am doing my best to get a nest egg together for retirement. I find that I have to pay 46 cents in the dollar of $6,000 or $7,000 when my total super is now at about $148,000. Why is that? I thought super was to make people self-sufficient in retirement. This is the government's grab on superannuation and no doubt they are looking very closely at the $1.5 trillion that has been put away in super funds.

Since coming to government, Labor has hit Australia's savings with nearly $9 billion in increased taxes and charges on superannuation. Three point three billion dollars of this has come from low-income earners through various reductions to the government's super co-contribution scheme, established under the previous, coalition government. This Labor government has reduced the co-contribution maximum per year from $1,500 to just $500. It also lowered the threshold at which the co-contributions phase out. When this first came in, my son was an apprentice builder and my eldest son, an accountant, said to him, 'Tom, you should try and put some money aside because when you do the government will make a good contribution of $1,500.' That my son did, but now he sees that eroded away to just $500. He is still what I would class as a low-income earner; he has been a qualified builder for a couple of years.

A coalition government will look to provide certainty and stability in superannuation by not making unexpected detrimental changes to the superannuation system in the next term of parliament if we are elected. This will allow people to save for their retirement and plan with confidence. This is most important. We all know the statistics about our ageing population and how much we need people to be self-sufficient in retirement, not reliant on taxpayers for pensions, health benefits, aged-care facilities et cetera. We know the drain on the public purse is enormous and this will only get greater as a larger number of Australians tend towards those older years, if I can put it that way.

The coalition plans to increase the compulsory superannuation contribution from nine per cent to 12 per cent, with a pause for an extra two years at 9.25 per cent; improve corporate governance arrangements for superannuation; properly address the issues of excess contributions to make sure Australians saving for their retirement are not unfairly penalised for genuine unintended errors; pursue opportunities to cut unnecessary red tape in superannuation; remove regulatory barriers currently restricting product innovation and improved options to manage financial risks in a retirement phase; and revisit concessional contribution caps in super co-contributions for lower income earners once the budget is back in a strong enough position. Finally, a coalition government will conduct a financial systems inquiry which will include the superannuation industry. The coalition will continue to consult with the broad cross-section of stakeholders in the super industry in the lead-up to this year's election. I would also like to add that allowing trustees to cap asset based administration fees is most important.

The government anticipates that this bill is the fourth and last tranche of legislation implementing the MySuper proposals from the Cooper review. The first bill, tranche 1, established core provisions for MySuper, which included rules around the charging of fees in relation to member accounts. This included, in effect, a ban on caps for account administration fees. As paragraph 6.11 of the tranche 1 bill explanatory memorandum discussed:

For any fee that applies to all members of the MySuper product, such as an administration fee or an investment fee, each member is to be charged the fee under the same charging rule. For example, if one member is charged a percentage of their account balance in relation to the MySuper product as an administration fee, then each member of the MySuper product should be charged the same percentage of their account balance in relation to the MySuper product at the same point in time …

This caused an adverse reaction among industry stakeholders at the time. These stakeholders, as well as the coalition, were anticipating that the government's current and final MySuper bill, tranche 4, would include amendments to remove this unnecessary and counterproductive requirement. However, such amendments were not forthcoming.

As I said, there is roughly $1.5 trillion of superannuation in this nation. There is no doubt that this current government tried to do its best to get what it could out of the tin of super money in an effort to bring about its promised budget surplus—a budget surplus that we were told on literally hundreds of occasions would be delivered in this financial year, only to find that the budget would be some $20 billion plus in the red. After the election on 14 September, we will get the true figures on where the budget is at this time. Notice how the election date will take place before the fiscal outlook for this financial year is reviewed for the public of Australia.