Anne Urquhart (Tasmania, Australian Labor Party) Share this | Hansard source

There are a number of points that I think everyone in this chamber would agree that we want included in superannuation laws. We want laws that test superannuation funds on their performance. We want laws that ensure superannuation funds are spending members' money wisely. We want laws that ensure fewer duplicate funds are created and that ensure superannuation fund members have access to accurate and timely information about the performance of their funds and are able to move to better performing funds with minimum restrictions. These objectives should be quite achievable. Unfortunately, we have before us today a poorly drafted bill that has struggled with these issues, and in many respects it's failed in these issues. If we all agree that those are sensible objectives, then our job today is to ensure that they are met.

Labor is the party of superannuation. We introduced it. We have consistently defended it and consistently improved it. We've done so because it is a core Labor value, something that we treasure—and that is dignity in retirement. As a result, Australians have $3 trillion in nest eggs for retirement—$3 trillion of economic security to enjoy after decades and decades of hard work, $3 trillion of investment in the economy and $3 trillion of planning for the future. As the Morrison government has learnt, Labor will not stand by and let this extraordinary achievement be degraded. Labor supports the objectives of the Treasury Laws Amendment (More Flexible Superannuation) Bill, but, as I've said, superannuation is a Labor legacy, and we want to see our superannuation system performing well, so we support the implementation of measures that will prevent members from unintentionally opening multiple superannuation accounts. We support the implementation of an objective performance benchmark for superannuation funds. We believe profoundly in the fundamental principle that superannuation trustees must always act in the best interests of their members, not those of parent entities, those of shareholders or those in the banking industry. As a result, Labor cannot support the bill in the form that it is being brought forward by the government today.

The passage of this bill through this chamber as it is drafted would damage the interests of current and future Australian superannuation fund members, working Australians who deserve that dignity in their retirement, working Australians who deserve our respect. So we all have a job of work to do today and for as long as this debate continues. Labor cannot support the bill as drafted, so we will aim to fix it right here in the Senate. We believe that if we all hold on to those key concepts—dignity in retirement, respect for working Australians and proceeding in the best interests of superannuation—then we might, but we should, get there. But, if the government can't accept the simple fixes that we propose, then we will protect the interests of Australian workers by voting this poorly drafted bill down.

Labor will be moving a series of amendments to fix this bill. We're not here to sink the bill; we're here to fix it. We want an objective performance test and we want to close down issues with multiple accounts. And, to be very clear, we cannot support a bill that staples members to underperforming funds for years. Treasury has estimated that 21 out of 77 default MySuper funds covering three million Australians will fail the benchmark on day one. This means that, if this bill passes, up to three million people will be stapled to a dud fund for life. That is a patently ridiculous and undesirable outcome, and it attests to the repeated pattern we see with this tired government, making an announcement claiming they've done something momentous and claiming to have solved a problem. But in the detail that's where we find all the flaws, all sorts of consequences that they have failed to consider. You cannot claim that this bill makes an improvement in workers' superannuation, when it leaves behind millions of Australians—three million Australians in this case. It's all announcement, no delivery. Independent modelling has estimated that this measure alone could cost Australians tens of thousands of dollars in retirement savings. Treasury's own information spelled most of this out for the government, who have simply chosen to ignore it.

There are many other problems with this bill. It attacks the basis of insurance in superannuation—the industrial default system—meaning that workers in high-risk industries will miss out on insurance tailored to their profession. We heard the examples of those professions when Senator Brown spoke earlier in this place. Non-industrially determined funds often include exclusions in their default insurance packages for high-risk occupations. Labor knows that our truck drivers, construction workers, police officers, firefighters and health workers deserve better. It really begs the question: why is essential workers insurance under attack once again?

The government has already begrudgingly accepted the necessity of valuable, industrially relevant insurance for workers in high-risk industry, through its acceptance of the dangerous occupation exception to the putting members' interests first package in 2019. We must bear in mind that some workers actually choose to stay in two funds: one for access to affordable insurance and one that's self-managed. Yet the government is proposing these stapling measures, so workers who are changing into high-risk careers and do not choose their fund will likely remain in their previous fund, which may well have insurance which is inappropriate for their heightened risk. This bill threatens to undermine the provision of putting members' interests first reforms which relate to those dangerous occupations.

Finding insurance as a worker in a high-risk industry is difficult, and it will be made more difficult if this bill passes unamended. Workers who are stapled to a fund—it may be the super fund for their first job in hospitality, fast food or retail—and do not join their workplace default fund as their work changes face higher premiums, may be underwritten or may be excluded entirely from insurance cover. The very least we can do as legislators is to ensure that our first responders, who are out there every day risking their lives for our safety, have the insurance cover that they need and the cover that they deserve.

Another huge problem is the rush the government is in. It just doesn't seem to be able to get its act together when it comes to the timing and implementation of its decisions. This is just like the massive Medicare changes announced by Minister Hunt in late May, giving the health sector just weeks instead of months to change over its entire system to support almost 1,000 changes. Now the government wants these superannuation changes to take effect from 1 July 2021—this year. That will mean that Australian employers have to scramble to implement new systems in just a couple of weeks. So you've got to ask: what is the rush? There's no answer to that question, except that once again we see a level of fumbling and incompetence, with rushed changes which have major implications. You could be forgiven for thinking that the Morrison government lives in la-la land, not contemporary Australia. Just like those Medicare changes, here is another example of magical thinking; the government has completely forgotten that the changes don't just magically happen with a vote in our parliament or by Ministers Hume and Hunt simply waving their magic wands. There is the practical process of implementing such significant change to be considered.

The bill introduces new administrative burdens on superannuation funds, tying funds up in red tape, which will ultimately be paid for by superannuation members through increased administration fees. The government's bill also has huge gaps in coverage as it will only cover default MySuper products when the majority of underperforming funds are concentrated in the choice sector.

For these many reasons, Labor cannot support the bill as drafted, and, as I said earlier, we will aim to fix that here in the Senate. I'll just add a couple of salient points. As most of us who are genuinely engaged in matters of ensuring that working Australians have sufficient retirement savings know, member engagement is critical to ensuring that super fund members are in the scheme that best suits their personal needs and career and life stages. Super funds have a range of products, including various investment choices. To staple a person to a fund with limited choices may not be in that person's long-term best interests. As you go through life, circumstances change; we know that. What suits an 18-year-old in casual work will not necessarily suit that person when they are maybe a 40-year-old professional. Stapling a super fund member to their first fund is contrary to member engagement, as it will encourage a 'set and forget' mentality.

We want super fund members to take an interest and to take responsibility, and much of that is about education. Rather than encouraging 'set and forget', the federal government should be encouraging Australians to take control of their super, including selecting the death, disability and income protection insurance that is most suitable to their individual circumstances and planning for a comfortable retirement. An important aspect of taking control is having comparative super fund information readily available. This must be on a consistent basis for retail and profit-to-member funds, which is not the case at present. There are some actual costs that retail funds are not required to declare at the moment. It would be an undesirable outcome if, as a result of this bill passing the Senate, millions of Australians are stapled to underperforming funds and untested superannuation products.

In its current form, the bill encourages that 'set and forget' environment where working Australians don't take an interest in their super, don't bother checking their balances, never discover the miracle of compound interest and don't make choices that best suit their situation and the nature of their work. The situation is even more baffling because it espouses the opposite of the Liberal ideology of individual choice and self-determination. Is the Morrison government playing some form of game? Does it want people disinterested in and disengaged from their superannuation? Is this about another ideological fare by some kind of elitist view—a paternalistic group of Liberal people saying to working Australians, 'You're not competent to look after your own money, so we should do that for you'? I say to senators opposite: is getting your hands on the money what this is all about in the long term? We know that's been the plan for a very long time—to get your hands on members' money. I have my suspicions, and I sincerely hope that, in our deliberations on this bill, you prove those suspicions wrong, and let people take charge of their super without your involvement.

(Quorum formed)