Andrew Bragg (NSW, Liberal Party) Share this | Hansard source

I rise to address the bill before the chamber, the Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020. I think it's very hard to avoid considering the context of this bill. We are talking here about a government program for private pensions, which is what superannuation is, and I think the history of the scheme is highly relevant to this bill. This history is one of the many major flaws with this scheme. Originally, in modern times, the Whitlam government had a review to work out what sort of super scheme they should have. They didn't proceed with anything. Then, in 1992, the Keating government put in place the superannuation guarantee arrangements. Of course, in doing so, the Keating government gave the keys of the city to the unions and the banks, and the unions and the banks have run this scheme in their own interests, not in the interests of members, for the past 30 years.

There are more lurks and rorts in this scheme than you can think of. It is impossible to think of another industry in Australia where the door opens and the money just falls in. That has created a culture within the superannuation sector where, because people are disconnected by law from their own money, there is very much the view that this is not our money so we'll waste it and we'll charge high fees on it. It has only been during this pandemic, when we've had changes like the early release scheme, that you've seen for the first time people thinking, 'Okay, this actually is my money and I'm going to do something with it.' The data that came out of the early release scheme, where almost $40 billion came from superannuation, showed that 60 per cent of that money went into people's personal balance sheets to improve their personal position by paying down debts and paying down mortgages.

The flaw at the centre of this system has been paternalism and separation from the Australian people, with opaque, bizarre schemes designed by people to feather their own nests. The macrostats here, I think, are essential and critical. Who could imagine an intergenerational retirement scheme, an intergenerational policy, with no framework and no objective—nothing. No-one knows what the hell this thing is for. It is perhaps to reduce pension outlays. It is perhaps to increase standards of living in retirement. It is perhaps designed to reduce our reliance on foreign capital. If it is any of those things, it's a big, red fail on all those fronts, because this system costs the budget more than it saves. Can you imagine? We're going to have a national savings scheme that is designed to save the budget money but costs the budget more money than it saves, not just now but every year until 2050 and beyond. There is no projection that exists from any actuary, private sector or public sector, that shows that this scheme will ever become positive to the budget or that it will ever improve the nation's balance sheet. It is a scheme which is way off the path, and that is a major problem.

This particular issue of the Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020 is a very good initiative. It's one of a number of initiatives that Senator Hume has initiated in this place and it has already achieved a number of important changes so that people have more of their money. But I have to say that, in a system which is replete with lurks and rorts, this would have to be amongst the best in terms of a scheme that helps vested interests, not workers.

These are called eligible rollover funds. They are where the workers' money is deliberately sent because the funds don't want to find the worker. The average fee is 1.63 per cent according to Rainmaker. It's extraordinary, when you think that you can go down to Vanguard and get an Aussie shares fund, an indexed fund, for 10 or 15 basis points—10 or 15 basis points, yet these people want to charge workers 1.63 per cent. It is criminal, but this has been a feature of the scheme. I give great credit to the government, in particular Senator Hume, for putting forward this initiative now, but it is ridiculous that it has taken us 30 years to get to the point where we decide to clean these things up.

The macroproblem we have here is that we have a scheme with no objective, no framework and no capacity to ever deliver anything for the Australian budget. In fact, the only thing it delivers is more cost to the budget. It is also regrettable that this scheme has no real prospect of ever reducing people's reliance on pensions. Even the Intergenerational report shows that, by 2050, 70 per cent of Australians will be on the pension. Even if we went to 12 per cent super we would still have 70 per cent of people on the pension, because if we want more than 50 per cent of people to be self-funded in retirement we need to look at contribution rates of 20 per cent or more, which is just not realistic.