Gerard Rennick (Queensland, Independent) Share this | Hansard source

Hear me out. Vocally, they will oppose it in the chamber and talk about how it is all bad, but, in the dead of night, 'Little Johnny Howard' and Peter Costello ran down to the sewer with their mates from the banks, CBA, National Australia Bank, Westpac and ANZ. CBA did a joint venture with Colonial Mutual. National Australia Bank did a joint venture with National Mutual. Westpac took over Bankers Trust and ANZ did a joint venture with ING. Colonial Mutual's return on equity, when they were owned by the Commonwealth Bank, was 66 per cent.

So don't believe it when you think the Liberals don't support superannuation. I pleaded with the former Treasurer, Josh Frydenberg, not to lift the superannuation levy from nine per cent to 12 per cent. He didn't block it, because, at the end of the day, the banks love superannuation. You know why? It increases the mortgage. If you can't pay your mortgage off quicker, because your money's tied up in superannuation, it means you've got to pay more interest on your mortgage.

That's why the banks love superannuation and that's why the Liberals love to pretend they hate superannuation. But they don't. Had they been serious about it, they would have listened to me when I was secretary of the finance backbench and pleaded with them to enable people to keep their own wages. Senator Gallagher just belled the cat again, because she said the average balance of superannuation is $267,000. Guess what the threshold is for the full pension, to start getting off the full pension? It's $312,000. That means, after almost 33 years of superannuation, it hasn't shifted the dial.

I'll accept it's not fully matured yet, but guess what? This is what's going to happen when superannuation becomes fully matured. You are going to get people to start withdrawing a lifetime's worth of savings, you're going to get someone pulling out 40 years worth of savings and you're going to need 40 people coming in to replace those savings. You're going to start to see withdrawals exceeding contributions. You're going to see forced asset sales, which is going to induce a liquidity crisis, and then you'll see the government having to step in and solve the problem.

I've approached a number of Labor people and said, 'If you got rid of the tax on the unrealised gains, I'd consider the legislation.' But here's the thing: the whole taxing of superannuation is fundamentally flawed. It was Howard and Costello that ramped up superannuation from four per cent to nine per cent. They should have killed it stone-cold dead when they got elected in 1996. They didn't, but I will acknowledge former senator Richard Alston, who did a great job in 1992 when it was introduced. He tried to oppose it, and the Liberal Party then opposed it. But, of course, Howard was always the bankers' servant—and Costello—and he rolled over on superannuation. To listen to the Liberals come in here and slag off superannuation—I'm sorry, but I'm not buying it. You had your opportunity to kill it stone-cold dead, and you didn't.

Here's the other tragedy about superannuation: today, 40 per cent of people retire with a mortgage, and those 40 per cent are the low-income workers. They are pulling out their superannuation and going on the pension anyway, so we're wasting $40 billion a year on fees for the financial engineers in their ivory palaces in Sydney and Melbourne. Here's the other tragedy with superannuation: last year's MYEFO exposed that superannuation now costs $60 billion a year in tax concessions. It goes to the upper 20 per cent, the very people—and I'm one of them—that don't need the pension and were never going to go on the pension anyway. It costs $60 billion. You could give 14 million workers a $4,000 tax cut and you could lift the tax-free threshold to $50,000 if you abolished superannuation. That would enable young people to save up for a mortgage quicker.

At People First, we're not going to base your tax on how much money you have in superannuation; we're going to give you a tax-free threshold of $25,000 in superannuation and $40,000 outside of superannuation so that your first 65 grand a year is tax free. We're going to fund that because we're going to abolish those absurd tax concessions in superannuation, we're going to get rid of the financial engineers, and we're going to bring back the civil engineers, the mechanical engineers and the electrical engineers to start building infrastructure in this country, not paper castles in the air based on the sand of superannuation, the lies of superannuation, the rorts of superannuation and the dead carcass of corruption.