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

In terms of the single default, what I would say is that the modern workforce is very different to the workforce of 1992, yet we are stuck with a rigid system from 30 years ago which basically assumes that you work for 30 or 40 years and you're retired for a few years. Now we have an economy where people are working multiple jobs and can work flexibly. Obviously, the advent of the gig economy has created more opportunities than were there in the past. So what this system will do is ensure that there is only one default fund for each Australian worker unless they choose to do something else. From 1 July this year, employers will have to pay into the worker's default fund. That is their fund, and that is the fund that they will have until they choose a different one. People have been concerned about the burden on employers. Employers have reported that they can do this. Because of the advent of straight-through processing, this is apparently quite an easy thing for employers to do through the ATO.

We have about 100 default funds today. People have said, 'Jeez, wouldn't it be bad if we had 10 big industry funds?' Would I be worried about that? No, I wouldn't be worried about it, because I have a view that, the more people have in super and the better the system is, the easier it will be to engage with. People will decide to do something else. We shouldn't be trapped into this mindset that the whole thing has to be designed for the default person, for the disengaged person. I know that suits the Labor Party and the Greens, who like people to be disengaged from their own money so they can basically take the money from the black box, as they've done for 30 years. In the last year, $30 billion in fees has come out of the super system, and there's been another $20 million paid to unions.

Very few people come to this debate with clean hands. I have worked inside the system. I have seen how broken it is. I have seen how crooked it is—and it is crooked. The whole idea of the Labor Party defending the position that people should have multiple accounts is disgusting. Multiple accounts means twice the fees and it means lower returns. But do you know what it means for the Labor Party and their mates—the unions? It means more money and more fees. That is why they are defending it. Who would have thought that the party that proclaims to stand for the workers is wanting to defend a system which takes away the workers' money—because, of course, they have to pay double the fees? The whole idea of this is to say that you have one fund. It doesn't matter whether it is a retail fund, an industry fund or whatever; that is your fund. You can choose a different fund—that's fine; we all believe in choice—but that is the backstop that we have. I should say that $2.6 billion a year is lost through multiple accounts. I know that's a lot of union subs. I know that union membership has fallen down to 10 per cent and this is how unions are keeping afloat—but it is really not appropriate. So don't forget: $30 billion a year in fees.

The performance testing should have been a feature of the system. The fact that there have been so many poor-performing funds over the last 30 years really is an embarrassment to all of us. I think we all share a collective blame there. We shouldn't be compelling people to put their money into a scheme that isn't working. Where people have been able to get great returns, fabulous—that's great, and we want more people to get that. But there have been serial underperformers. As far as I can see, the bulk of these have been in the retail sector. These are not funds that should be able to receive compulsory contributions.

This is an outsourced pension scheme. People sit in here and talk about the liberties of the superannuation scheme. Give me a break—this is a compulsory scheme. The only reason the system exists is because of Canberra. This is not the free market in operation; this is a compulsory pension scheme—which doesn't work. So I think the underperformance test is a good idea. I know there are different views about whether or not the metrics are right. For the record, my view is that it should be simple, clean and comparable. People need to be able to see that the calculation that has been done on their fund is fair, reasonable and comparable. The way that is to be done is obviously through the regulations. People know that. It's not in the bill. What the bill sets up is the framework to assess super funds.

I find it unfathomable that people would come into this chamber and argue against the principle of being tested. What are people afraid of? We are making people put their money into these locked boxes. They should be tested. They should be the best possible funds. If they can't perform, if they can't even meet their own benchmark, they shouldn't be taking compulsory contributions. And lest we forget: these are the same people, largely, who come in here every day running the lines from the super funds. They can't think for themselves. If you watch them tonight, they will read all their speeches. It really is pathetic. Last year, as Australia faced the greatest economic shock in 100 years, those opposite were saying that people shouldn't be able to have access to their super in an emergency—that people couldn't have access to their own money; that they couldn't be trusted to touch their own money. Such is the depth that the Labor Party, the unions and co will go to defend their financial benefactors and the super funds.

Senator Sterle interjecting—

That is true. I look forward to your contribution. Maybe you can do it without having to read it.

Senator Sterle interjecting—