Gerard Rennick (Queensland, Liberal Party) Share this | Hansard source

That was quite an entertaining speech from Senator Sheldon, but of course what comes around goes around, so I thought I'd do a bit of googling myself on industry funds, particularly an industry fund by the name of Hostplus. The banking royal commission heard that Hostplus spent $267,000 on entertainment for clients and staff and another $220,000 on accommodation in the year to June 2017. The fund also spent $260,000 on tickets to the Australian Open tennis, where Hostplus CEO David Elia said his wife and two children were among his guests. Another $40,000 was spent on football tickets at Melbourne's Etihad Stadium, with some of the sports related spending covered by the fund's marketing budget. I found that on a website known as The New Daily, which happens to be funded by industry super funds. You've got to ask yourself what industry super funds are doing in the media. Are they actually making money here? To me, this looks like a clear breach of the sole purpose test. The sole purpose test is all about making sure that money invested is for the benefit of the members, not for the benefit of the union funds or the Australian Labor Party.

The one thing we did hear in the previous speech is that there is a clear choice in this chamber. This side of the chamber is all about choice, and that side of the chamber is all about control. And that matters, because superannuation costs the Australian worker $35 billion a year in fees. I'm not going to be judgemental as to whether it's the banks or the industry funds—that's a lot of money. When you think that that also comes at a cost of $40 billion in tax concessions, that's a whopping $80 billion cost to the economy. Compare that to the pension, which covers the bottom 70 per cent of earners. That costs $50 billion a year and only $6 billion to run. How is it that the Department of Social Services can run the pension for $6 billion, yet in private industry, whether it's industry funds or banks, the cost is $35 billion? And that's just the start. Of that superannuation, $600 billion is actually invested offshore.

What's interesting about that is that, in 1990, Bob Hawke said the money raised by superannuation would be invested right here in Australia. Well, according to the latest numbers—and I should qualify that by saying that it's pre COVID—over 20 per cent of the money invested in superannuation is invested offshore. Imagine the number of jobs we could create here. Imagine the number of dams and the amount of high-speed rail we could build. But wait—that's not all. The number of people retiring with a mortgage has increased from 40 per cent to 70 per cent. The whole purpose of superannuation was so that people could live well in their retirement. But how can you live well in your retirement if you've got a mortgage? It's counterproductive. The other thing, of course—and we saw this in Greece and we're seeing this with the defined benefit schemes in the US now—is that it's actually a Ponzi scheme. I will explain why.

People like me, my generation, will be the first generation with 40 years of superannuation. When 2030, 2035 comes around, we'll be able to pull out 40 years in one hit. Do you know what that means? We're going to need another 40 people coming behind my generation; for every person that takes out 40 years worth of super, you're going to need 40 people putting in one year's worth of super—assuming that contributions and withdrawals are the same per person, and I realise they're not. Otherwise withdrawals are going to start exceeding contributions. Do you know what that will cause? It will cause a crash on the stock market. That was actually discussed with respect to COVID. They were jumping up and down about how, if we allowed young people to access super, it would cause stock market prices to fall. Well, wait until you get people from 1970 onwards with a full 40 years of superannuation savings ripping out that lump sum in superannuation.

I'm glad to speak on the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 because at the end of the day it's important to give people choice. Personally, if it were left to me, I'd make superannuation voluntary, because I think there are a lot of people out there right now who are doing it tough. We have this wonderful thing in Australia, introduced by the Protectionist Party, which is the forefather of the Liberal Party, called the pension. That is what I am happy to pay my taxes for. But I am not happy to pay my taxes for the government to tell me how I must invest my money.

The practice of forcing workers into a predetermined super fund is perverse, as it only encourages negative outcomes that include excessive fees, limited choice and perhaps even a loss of retirement income. That brings another thing into question, too. The Constitution says the Commonwealth can't take property from people without compensation, but what happens if you get to 60 and you've lost your money in super? Paul Keating brought in super in 1992. He never took it to an election. Tell me this: if he took to an election the proposition, 'I'm going to take 10 per cent of your money and give it to someone you've never met, and you may or may not get it back when you're 60,' do you think people would have voted for him? If I were to say to Senator McKim, 'Nick, I'm going to take 10 per cent of your earnings and give it to some white-collar blowhard in the banks, and I'm not going to promise to give it back to you,' would you vote for that? I don't think so.

That's the thing about superannuation. I won't use a figure of speech that comes to mind, but it's been like water boiling. The water's getting hotter and it's slowly creeping up and up and up. It started off at two per cent and didn't seem that bad. Then it became three, four and then five per cent. Now it's 9½ per cent of earnings and it's legislated to go to 12 per cent. Whilst it's 12 per cent of earnings, it may actually be the entire amount of money that someone has left over to meet daily necessities. For example, if you earn $100 a week and you pay $30 in tax and $50 in food and accommodation, you may only have $20 left. A lot of people haven't even got much left; they've got nothing left, yet the government forces those people to give up that last 10 per cent of their money and give it to someone else to manage until they're 60. Meanwhile, so many young people who'd like to be able to pay off their houses can't do that. Their ticket is being clipped twice—once by the banks, with bank fees, interest and mortgage charges on the loan, and another time with their superannuation savings. They're actually getting charged twice for what very often turns out to be no productive income.

I'm delighted to be supporting this bill in the Senate. Many young Australians get their first job at a supermarket, fast food outlet or department store. Many Australians go on to have rewarding careers in the retail and hospitality sectors, not only seeking financial reward in the pursuit of excellence but also enjoying the social aspect of such work. I imagine that my own children will one day get their first job stacking shelves, flipping burgers or serving coffee. These jobs teach responsibility and financial management and help teenagers to establish greater financial independence. They are critical in helping young Australians to mature as adults—to learn new skills, find careers and contribute to the workforce in different ways. It is unfortunate that many of these vulnerable young workers often find themselves on the front line when it comes to experiencing workplace intimidation and bullying. Quite often in these cases it is the union for retail, fast food and warehousing workers, the SDA, that exploits the vulnerability of young workers by insisting that they not only join that union but that they also sign up with a union-backed industry super fund that donates back to the union. After passing through union coffers, these rivers of gold flow on to fund campaigns to elect Labor Party candidates at state and federal elections.

In this day and age it astounds me that any organisation, especially a trade union, which purports to protect workers' rights, would seek to deny workers their choice of superannuation fund—remember that this side of the chamber is all about choice, not control; this is freedom and that's totalitarianism, a very stark contrast—and instead drive them to join a super fund that's effectively owned by the SDA, namely REST Industry Super. Only an anti-choice, anti-worker, corporatist bully would defend such piracy. After all, it is workers' hard-earned money we're talking about, not government, employer or union largesse. The money that goes into super belongs to the working men and women of Australia.

Adding insult to injury, REST Industry Super significantly underperformed many other funds. They ranked just 44th out of 64 comparable funds over five years. Yet, despite the fund's poor performance, the SDA was happy to lock young, casual and low-paid workers into that fund. This is nothing short of corporate robbery, as far as I am concerned. As a further kick in the guts to low-paid workers, the actions of their union also meant that workers who are really struggling to make ends meet and working a second job are forced to either shift that job's superannuation contributions to REST or be ripped off by two sets of fees. Unsurprisingly, the SDA directly benefits from REST, with employee representatives on the Rest board handing more than $300,000 in directors fees to the union in recent years. Wow!

Let's be clear about this. There is virtually no evidence that the SDA in any way, shape or form exists to represent the best interests of its hardworking members. Rather, the SDA exists to manipulate votes on Labor Party matters, and it does that by bullying young retail workers into SDA membership and signing them up to commitments that they don't understand, want or even need. The SDA uses its workplace dominance and position of trust to extort funds and funnel those funds into political campaigns, while they leverage high membership numbers as powerful voting blocs at Labor Party conferences and preselections. That's got a certain flavour to it at the moment, hasn't it? This is the SDA's business model, pure and simple. It is a model that is rife across the union movement, a model where the tendrils of trade union power reach out to entangle and thereby compromise the operational integrity of many industry super funds. Surely any Labor member or senator who may be aligned with the SDA should take a serious look at themselves.

Compulsory superannuation was originally conceived to provide a fair and affordable retirement savings scheme for all Australians, a scheme that would boost the income and financial security of retirees and make the age pension more sustainable, while offering contributing members a degree of flexibility and choice. It is a sad indictment that, in the main, compulsory super has done none of these things. Gee, I'm enjoying this speech! I can't say how much I'm enjoying this! It is fair to say that compulsory super was never intended to shackle low-paid workers to the likes of REST Industry Super simply because they worked a part-time job at a supermarket or fast-food outlet when they were 16. Why should those in the retail and hospitality sector—many of whom enjoy otherwise rewarding careers—be denied options available to workers in other sectors simply because their chosen industry is dominated by a dud union in cahoots with an underperforming super fund?

Superannuation is workers' money. It is not the employers' money, it is not the fund managers' money and it certainly isn't the unions' money. It's the workers' money, and it should be their choice and theirs alone as to where it is invested. This bill is straightforward. It's about standing up for the little guy. It is about ensuring that casual and part-time workers in our shops and restaurants are given the same opportunities to save and invest and get ahead. This bill does not stop enterprise agreements from nominating a fund as a default. It simply allows workers to choose an alternative fund if they wish to. I implore those opposite to look, for once, beyond narrow self-interest and ignore trade union instructions. This bill should rightly be supported by any sensible, fair-minded person. After all, what reasonable individual has a serious issue with allowing workers to choose their preferred superannuation fund?