Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I rise to speak on the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2013 and related bills. The handling of superannuation policy and legislation by the Rudd and Gillard Labor governments has been nothing short of disgraceful. As I travel around Australia and speak to Australians saving for their retirement—Australians working hard, trying to do the right thing to get themselves in a position to be able to look after their own needs in retirement so that they do not have to be a burden on the public purse by having to rely on the aged pension—they invariably complain to me about the constant chopping and changing and the constant chaos in the way this Labor government has approached superannuation laws. Remember, in the lead-up to the 2007 election the then opposition leader, Kevin Rudd, said that there would be no change to superannuation—not one jot, not one tittle, he said.

But since then, between then Prime Minister Rudd and current Prime Minister Gillard, they have imposed almost $9 billion of additional taxes on people's retirement savings—almost $9 billion of additional taxes to plug their budget black hole, which is coming straight out of people's retirement savings. They promised no change but of course this dishonest government immediately, in its first budget, slashed concessional contribution caps from $100,000 for people over 50, over time, to just $25,000. And right now concessional contribution caps across the board are down to $25,000—which means in practice that any Australian who wants to save more than $25,000 towards their retirement has to pay top marginal tax on that 46½ per cent. Why would anyone agree to lock more than $25,000 a year into their superannuation if they have to pay more tax than they might have to pay on their take-home pay?

So, we have had the increased taxes because this is a government that has fundamentally mismanaged the budget. They have spent $220 billion more than they have raised in revenue, even though they have benefited from the best terms of trade in 140 years, because they spent too much. And people across Australia—doing the right thing, working hard, saving for their retirement—have been asked to pay the price. But increased taxes were not enough. The government also had to impose massive regulatory change without going through proper process, without trying to test the cost-benefit equation and without making sure that the additional cost that is ultimately imposed on people saving for their retirement delivers a proportionate benefit. Conservative estimates across the industry are that the increased red tape imposed by the Rudd and Gillard Labor governments will cost about $1½ billion just to implement and many hundreds of millions of dollars in additional compliance costs year in year out, which will come straight out of people's retirement savings and superannuation accounts.

And here we are: for the last three years the government has said, 'We're going to legislate the regulatory framework for those Australians who do not make active choices in relation to their superannuation'—legislate the consumer protection framework for those Australians who find themselves in default super arrangements—'we're going to call it MySuper, and it's going to come into effect on 1 July 2013.' Guess what? 1 July 2013 is less than a week away. And here we are dealing with the fourth tranche of the so-called MySuper bills in relation to legislation that is supposed to come into effect and be implemented in less than a week from now, and major businesses across Australia that are looking after people's retirement savings are expected to comply from day one.

It is incompetence writ large, but that is what we have become used to with this government. Over the last three years particularly, under the leadership of the current Prime Minister and with the current minister for superannuation, this government has been chaotic, dysfunctional, divided and fundamentally incompetent. People across Australia are on the receiving end of all of that dysfunction, division and incompetence. Not only do people have to pay more tax when they were promised no change and no increases in tax, they also have to pay higher fees as a result of all of the chopping and changing and the additional red tape that the government has imposed without going through a proper cost-benefit analysis or proper regulatory impact assessments.

Because of the truncated nature of the way in which this legislation has been dealt with—because of the government's running so hard into the wind—businesses across Australia are exposed to higher costs than they would have been if the government had handled this legislation competently and professionally. We have a minister for superannuation who is so distracted from his portfolio that he cannot possibly focus on what needs to be done to ensure a proper and orderly process. If Minister Shorten were as focused on his superannuation portfolio as he is on his other extracurricular activities, he would have done much better for people across Australia saving for their retirement.

In 2007, people were promised no change, but the government slashed concessional contribution caps from $100,000 down to $25,000 and progressively slashed the superannuation co-contribution benefits for low-income earners from $1,500 for every $1,000 saved down to just $500 for every $1,000 saved—saving about $3.3 billion in the process at the expense of low-income earners. In the lead-up to the 2010 election we had another pre-election lie from this government. We now have, in this bill, another broken promise from a Gillard Labor government which clearly cannot be trusted. In the lead-up to the last election, we were told that the concessional contribution cap for people over 50 with super balances of less than half a million dollars would be increased to $50,000 from 1 July 2013. Actually, it was initially to be from 1 July 2012, but that was deferred. Now, instead of getting an increase to $50,000 for people over 50, as promised, we are getting an increase to just $35,000 for people over 60 from 1 July 2013—not to $50,000 but just to $35,000.

Honourable Senator:

An honourable senator interjecting—

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

As Senator Boyce said, why would anyone be surprised, because this government lies. This government lies. Here we have the minister for superannuation out there, jumping up and down and talking about the fact that a coalition government would scrap the low-income super tax offset. Let me make this prediction: if the Labor Party happen to be returned to government on September 14, the Labor Party would scrap the low-income super tax offset because they cannot afford it. That is what they have done in the past; that is what they will do in the future. Because Labor's record on superannuation is to promise the world in the lead-up to the election—they promised no change, in the lead-up to the 2007 election, and an increase back to $50,000 concessional caps for people over 50 after the 2010 election—and then, after the election, target low- and middle-income earners with additional taxes on their superannuation. They will pursue the pre-election rhetoric of 'target the rich'—those bastards that are not paying their fair share of tax—before an election to get people on board and then, after the election, just press ahead, as they have done in the past, targeting low- and middle-income earners with increased taxes and red tape.

Here we are dealing with the fourth tranche of the MySuper bill which is implementing a series of corporate governance changes. But one corporate governance change which the government has not touched, because their paymasters in the union movement do not want them to touch it, is the very sensible and very important recommendation of the Cooper review into superannuation that at least one third of directors on industry fund boards should be independent directors. The Cooper review, initiated by this government, came to the conclusion in 2012 when they reported that it is no longer appropriate to have corporate governance arrangements based on the so-called equal representation model. Superannuation today is big business, and the thought that you could have some cosy arrangement with union representatives in charge and employer representatives making up the numbers as an appropriate corporate governance model for superannuation that is looking after people's retirement savings in 2013 is just completely unacceptable.

Superannuation boards, like all other boards of major businesses, should have appropriately high corporate governance standards. They should have an appropriate diversity of skills and experiences represented on their boards. There should be independent directors who are not linked either to the union interests or to the employer organisational interests but will take a dispassionate view, including on behalf of those fund members that are represented by neither a union nor an employer organisation. That was the very sensible view promoted by the Cooper review.

Guess what? When we moved that amendment in the House of Representatives, the House agreed with us. The House of Representatives voted for our amendment 72-68. But guess what happened then? The phones started ringing hot. All of the union votes that are keeping the Gillard government in power, all of the union votes that are making sure that Ms Gillard remains as the Prime Minister until the job is done, said, 'You have got to fix that. Go back in. Fix it.' Fix it they did. They forced the House of Representatives to remove what was a good amendment that implemented good policy, which was consistent with the government's own Cooper review recommendations and the coalition's policy. But, clearly, it was not consistent with the vested interests of the union bosses that are running the show in the Labor Party. So, here we are, dealing with this bill again. I can confirm that the coalition will again move that set of amendments. Hopefully the Greens will see the merit in ensuring that there is a diversity of skills and experiences for competency on boards and will vote for proper corporate governance.

I have to pause here. The intriguing thing about what happened in the House of Representatives is that, ultimately, what helped Labor do the bidding of their union bosses by removing that very sensible amendment was the support at the final hour of Independents such as Mr Windsor in the seat of New England and Mr Oakeshott in the seat of Lyne. I use the word 'Independents' loosely because I would say that they are fully paid-up members of the Labor Party, or they may as well be. We have this ludicrous situation where the so-called Independent members of parliament in the House of Representatives voted against independent directors on boards. I ask the question: what do the Independents have against independence? Why can't the Independents see the sense of having proper independent representation on superannuation boards which are currently filled with union hacks and employer representatives? Surely the Independents would have seen the merit in having independent directors as part of good corporate governance. If ever anyone wanted to see evidence that the Independents are fully signed-up members of the Labor Party, or may as well be, that was one key example.

Then we have the MySuper legislation which is supposed to enshrine in legislation the default fund arrangements, the concealed protection arrangements, that should apply to Australians who do not make active choices in relation to their own superannuation. But guess what? This government actually does not trust its own legislation. Here we are debating the fourth tranche and, if it passes the Senate, it becomes law on 1 July 2013. This government does not trust its own legislation and says, 'We can't possibly allow these products that are established in the name of this legislation to compete freely in the default fund market. We've got to have this additional red-tape process through Fair Work Australia.' It is a highly discredited process, it is non-transparent and non-competitive, and it protects the vested interest of the union movement, which is the only thing that remains to unite this rabble of a Labor Party. Standing up for the vested commercial interests of the union movement is the last thing that is uniting the Australian Labor Party.

Senator Boyce interjecting—

Senator Boyce has just reminded me that it represents just 17 per cent of Australian workers. We say, 'If this MySuper legislation passes through the parliament, trust your own bill, trust your own legislation.' Any product which qualifies for registration of a MySuper product should be allowed to compete freely in the default fund market without any further discredited and conflicted involvement by Fair Work Australia. You have union reps, who are super fund trustees, going to Fair Work Australia and arguing in favour of the listing of their fund as the default fund in a particular modern award. It is completely conflicted and completely inappropriate, and it is something that the coalition would fix in government. We believe that any MySuper product should be able to compete freely in the default fund market.

There are four bills here, which would normally attract a 20-minute contribution by each senator on behalf of the coalition, which we now have to ram into this very truncated debate. In the House of Representatives they had months and months to deal with this and we get less than one hour. One of the bills is the Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill, and we also have the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill, which is effectively a breach of promise in relation to what the government said they would do before the last election.

There is, of course, a better way. If the coalition are elected to government at the next election we will not make any unexpected detrimental changes to superannuation. With the coalition there are no surprises and no excuses. We will be open, transparent and upfront before the election instead of promising no change before the election and then hitting people with additional taxes after the election. We will improve corporate governance arrangements for super, ensuring that there is appropriate provision of independent directors on super boards by making sure there is proper management of conflicts of interest, in particular in relation to Labor Party transactions. We will properly address the issue of excess contributions to make sure that Australians saving for their retirement are not unfairly penalised for genuine unintended errors. We will pursue opportunities to cut unnecessary red tape in super, which the government has added in abundance. We will remove regulatory barriers currently restricting product innovation and improved options to manage financial risks in the retirement phase. We will revisit concession contribution caps and super co-contribution benefits for lower income earners once the budget is back in a strong enough position. And, of course, we will conduct a financial systems inquiry, which will include a focus on superannuation. We will not rescind the increase in compulsory super from nine to five per cent, though we will delay the full phase-in by two years so we will get there by 2021 instead of 2019, which will help us fund the income tax cuts and pension increases without a carbon tax.

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

I also stand to speak on the package of superannuation bills. I imagine that most of my colleagues will know the abbreviation WTF. It is certainly one that I have had sent to me in the last couple of hours by people in the superannuation industry who are gobsmacked and shocked that the government thinks that the fourth tranche of superannuation bills should be dealt with in 65 minutes—four bills that would in other circumstances have had numerous hours of debate each are now being rammed together into a miserable 65 minutes. So, here we go: the Gillard Labor/Greens government is again treating this parliament with disrespect. As Senator Cormann pointed out, there were months of debate and discussions about this legislation in the House of Representatives, but could the government bring it here in a timely fashion? No.

The Senate, which is the House of review, is one of this parliament's great strengths, and here we have debate being guillotined again—four superannuation bills, all being done in a miserable 65 minutes; that is, about 13 minutes per bill. When the coalition was in control of the Senate between 2004 and 2007, there were 32 bills guillotined. In the three years since the Gillard Labor government has had the majority in the Senate, more than 215 bills have been guillotined through the Senate; that is, seven times as many. It is beyond bemusement that the Greens, who were so proud under Senator Bob Brown of their opposition to gagging debate, have turned into the lapdogs that they are. We as lawmakers are not being allowed sufficient time to properly scrutinise and debate these bills, and that just is not good enough. I understand the response of members of the superannuation industry. We are talking about legislation that will affect the future of every Australian employee. We have seen so many examples of poor drafting leading to unintended consequences, and this tranche is yet another of those areas.

The first of the bills listed, the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill, seeks to introduce the fourth tranche of MySuper legislation. It also makes a few of the government's changes flowing from the Cooper review into superannuation. The government has been forced to bring a raft of changes to its own legislation after it was introduced. Just think how much better this legislation could be if it were properly debated. Those changes followed on from the Joint Committee on Corporations and Financial Services, of which I am deputy chair, which held an inquiry and found many serious issues in this bill. This shabby drafting is not good enough because it increases market risk and has the potential to cause Australians to lose confidence in their superannuation. Australians have lost confidence in any promise that this government might make in relation to super, but there are concerns that they could lose confidence in the entire superannuation system with the chopping and changing, the promising and unpromising, that has gone on with this government. The coalition will be moving amendments to this bill, as Senator Cormann pointed out.

The Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill amends the Income Tax Assessment Act 1997 to provide income tax relief to superannuation funds where there is a mandatory transfer of default members' account balances to a MySuper product in another superannuation fund. As Senator Cormann said, all this red tape is caused by the government's inability to trust its own legislation. We support the change that this has brought about to ensure that members of funds which participate in mergers are not unnecessarily penalised through capital gains tax considerations.

The purpose of the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013 and the Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Act 2013 is to amend various tax and super laws to bring in some of the budget related announcements. Of course, these are some of the changes that have been brought on the government by the way it went about drafting this legislation and introducing it in the first place. Once again, we have process issues.

This government, having promised not to do anything to super, has steadily reduced the concessional contribution cap for those aged over 50 since 2007-08—all part of Mr Swan's class warfare, no doubt, because of the extraordinarily rich people out there who were going to retire in the lap of luxury, apparently! One of the things that I am surprised Ms Gillard and others did not point out to Mr Swan is that this reduction in the concessional contribution cap particularly disadvantages older women. Once women's children have grown up, once they have perhaps achieved some seniority after returning to the workforce, in many cases they have the first chance in their lives to build a real superannuation pot for their retirement. It is not while children are growing up. There is plenty of research showing that, in fact, working women are far more likely to put money into their children's needs and their spouse's needs, or their partner's needs, before putting it into their own superannuation by way of concessional contributions. So, congratulations to this government for making it even harder for older women to build their superannuation to the level where it could be useful to them! I would just point out that male workers retire with 32 per cent more in their superannuation accounts than do women, even though women, because they live longer, spend 45 per cent more time in retirement than do men. Yet this government was too short-sighted to see the damage that they were doing with their attack on concessional caps. With this being the last parliamentary sitting week before the election, at least the government cannot introduce any further changes to superannuation. The raft of ill-thought-through changes have seriously undermined confidence in the superannuation system.

Voluntary contributions to superannuation were as high as four per cent of Australia's total salary base prior to the GFC. Since then contributions have more than halved. Those opposite might suggest that this is because of the GFC. I would suggest that it is because of Australians' lack of confidence in their economy and their government. Whilst the GFC was a significant contributor to that slump, the industry says—and I think it is just common sense—that the continuing uncertainty around the changes to superannuation has accelerated that slump, and people continue to lose confidence in super. The leader of the coalition, Mr Abbott, has made a firm commitment on behalf of the coalition that, should we win government in September, there will be no more unexpected detrimental changes to our super system. That is a commitment that I am sure all Australians will approve of.

I would like also to speak briefly about recommendation 2.7 of the Cooper review, which Senator Cormann mentioned, which suggests putting an end to the equal representation on superannuation boards model. Recommendation 2.7 says:

For those boards that have equal representation because their company constitutions or other binding arrangements so require, the SIS Act should be amended so that no less than one‐third of the total number of member representative trustee‐directors must be non‐associated and no less than one‐third of employer representative trustee‐directors must be non‐associated.

For a government that is so keen to ensure that corporate governance in the corporate world functions well, it is beyond belief that it would not accept this recommendation as a sensible way of improving transparency and accountability and of improving confidence in the superannuation system. There is no reason whatsoever not to accept this except that, as Senator Cormann pointed out, the union masters have spoken to the government about how they want this to look and about how many cushy jobs as trustees on boards their union mates want. It certainly does not allow for independent directors to be included.

It is not possible for a union member to be on the board of a superannuation scheme where the member's funds go without there appearing to be the potential for a conflict of interest. I am sure many of those directors exercise their duties as trustees in the most honest and the fairest way possible, but there must always be the likelihood that people will see this as having the potential to lead to a serious conflict of interest. We cannot go into the 21st century with the huge amount of money—the trillions of dollars—that we currently have in our superannuation system without wanting it to be the most efficient and competitive superannuation system with the highest standards of corporate governance. That is the system that will deliver value for superannuation fund members. Continuing to improve corporate governance in the industry will also help to increase Australians' level of confidence in the system and their willingness to make additional contributions. Why would any superannuant currently make extra contributions, given that they have no idea what the government is going to suggest next? We will certainly be pushing yet again for that change to happen.

One change, at least, that the government has in effect accepted is our amendment to allow trustees of MySuper accounts to cap asset based administration fees. We had been intending to move amendments on this ridiculous situation where there was going to be no limit on percentage based fees on super accounts, no matter how large a super account balance was. We are pleased to see that the government has finally decided that it will see the sense of this and take it on board. There was certainly a serious, adverse reaction among industry stakeholders when the government first came up with this scheme. Stakeholders could not believe it. It is good that the government has finally allowed for greater flexibility in fees. If the government had persisted with what it was intending, a $500,000 superannuation account could have been charged an administration fee 100 times greater than that of a $5,000 account, if the fee had been based simply on percentages. Clearly, it cannot cost 100 times more to run a $500,000 account than a $5,000 account, so why would the government insist on doing that when it claimed that it wanted an efficient system, a system that delivered value for money to Australia's superannuants? Without caps Australians will have more in their super and they will end up with more money. So it would have been inherently unfair, inequitable and, as I said earlier, inefficient to have maintained the situation that they have.

The coalition continues to be concerned that it is 2½ years since the Cooper review was handed down, and yet only some of the Cooper review has been implemented. The government has haphazardly implemented many of the findings of that review. We have tried to improve it along the way, and I think that we have made some very sensible improvements. But it is just beyond belief that this legislation is being be pushed through in the way that it currently is.

It is also interesting that, to date, this Labor government has hit Australians with nearly $9 billion in increased taxes and charges on superannuation over the last five years. Nine billion dollars has come out of superannuation accounts, which would not have come out of superannuation accounts if this government had held its promise to maintain super—not to fiddle with or change super.

We have begun consulting with a broad cross-section of senior superannuation industry stakeholders and experts, and we certainly will not be making any changes that could harm the superannuation system in Australia. We will certainly not be doing anything that will cost Australian superannuants a cent. We plan to increase the compulsory superannuation contribution from nine per cent to 12 per cent. We will be improving corporate governance arrangements. The first improvement will be around independent trustees.

We will properly address the issue of excess contributions to make sure that Australians who are saving for their retirement are not unfairly penalised for genuine unintended errors. What a farce that little effort has been from this government!

A coalition government will also pursue opportunities to cut unnecessary red tape. I think if we looked at the first, second, third and fourth tranches of the superannuation legislation we would see that at least a quarter of it could quite easily be removed so that people do not have this ridiculous situation of being second guessed by unions or by the government in every aspect of their superannuation.

A potential coalition government will also remove regulatory barriers currently restricting product innovation and improved options to manage financial risks in the retirement phase. We will revisit the concessional contribution caps and super co-contributions for lower income earners once the budget is back in a strong enough position.

As I said, we have already begun talking to the industry, and we will conduct a financial systems inquiry, which will include the superannuation industry, so that it becomes part of the financial system, not something tacked on and changed at the whim of the union movement or when the Treasurer needs desperately to scrabble around, as he did late last year, to find a surplus. It will be done in a coherent way.

I would expect that it will include looking at the terrible impacts that this government's changes to the concessional caps have had on women. Women have 35 per cent lower median balances in superannuation than men, and nothing has been done to assist them to improve this situation. There have been all manner of suggestions made—even by the Australian Institute of Superannuation Trustees—but all of them have been ignored by this government because the government's spending in other areas has meant that they could not help older, retiring women.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I also rise to make a contribution on this suite of bills, which include the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2013, which is the fourth tranche of legislation implementing the MySuper proposals that followed the super system review, otherwise known as the Cooper review; the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013; and the Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill 2013, the purpose of which is to amend various taxation and superannuation laws to implement a number of budget related announcements.

Three separate measures to be implemented by the bills are set out in four schedules to the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013. These three measures are a temporary increase in the superannuation concessional contributions cap for those aged 50 or more; amendments relating to the payment of the low income superannuation contribution; and an increase in tax paid on concessional contributions for certain taxpayers earning more than $300,000 per year.

The Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill 2013 fulfils the requirements of section 55 of the Constitution that a separate bill is required to impose a tax. This highlights the fact that this suite of bills contains yet another new or increased tax by this government.

The other bill which we are debating tonight is the Superannuation Laws Amendment (MySuper Capital Gains Tax Relief and Other Measures) Bill 2013. The purpose of this bill is to amend the Income Tax Assessment Act 1997 so that certain tax liabilities can be transferred between various superannuation and life insurance entities. The bill also amends the Defence Force Retirement and Death Benefits Act 1973 to allow for the payment of an additional superannuation contributions tax for some military personnel who are covered by the superannuation scheme established by the DFRDB Act.

Three years ago today the faceless men of the Labor Party installed Prime Minister Gillard and Australians woke up to a new leader of their country, one that they did not vote for. What was the reason for this? Labor had 'lost its way', Prime Minister Gillard then said—it was time to 'let the sun shine in' and allow transparency to reign. Yet here I am this evening, standing in this chamber to debate four government bills proposing significant changes to superannuation legislation in Australia. How much time have we been allowed to 'let the sun shine in'? A grand total of one hour and five minutes. One hour and five minutes to debate four bills, in my opinion—and, I am sure, the opinion of many Australians—does not constitute sunlight and transparency. It is utterly ridiculous and only serves to demonstrate the true arrogance of the Labor-Green alliance that rules this chamber.

The figures support my comments. In the three years of Liberal-National control of the Senate between 2004 and 2007, only 32 bills were guillotined—and, even then, only after much more reasonable opportunity for debate than what we are experiencing here this week and have experienced throughout the period of Labor-Greens control of the Senate. But it is worse than that. In the three years since the Greens-Labor alliance obtained their majority in the Senate, over 215 bills will have been guillotined—215 bills passed without due consideration and debate, with no opportunity for the chamber to properly analyse and consider the consequences of those bills, to test them and to find unintended consequences. For parties who claim to believe in openness and transparency in government, this is a complete abuse of power, and smells of desperation.

The fact is that the government, with the complicity of the Greens, are seeking to push as many of their poorly drafted pieces of legislation through this chamber, without any respect for parliamentary process or good governance, as they can. One wonders what price Labor have paid for the deal that they inevitably had to do with the Greens for their support in this regard. Interestingly, the facts on the use of the guillotine are not something that we ever hear when the Greens are scare-campaigning on the possibility of a coalition controlled Senate, despite the fact that they insisted that the Senate should be the house of review, providing proper scrutiny. With 65 minutes to debate these four bills in relation to superannuation, the Greens are just as bad as Labor, in not living up to their promises and not living up to the expectations of the Australian people.

The two concession cap bills that we are looking at today serve to demonstrate what we already know: Labor is clearly no friend of low-income earners saving for their retirement through superannuation. It is also clear that Labor's promises in relation to superannuation cannot be trusted. Superannuation is a key element of our retirement framework, and superannuation is extremely important to Australians. It is their nest egg and, to a large extent, it will determine the quality of the lifestyle they can enjoy in their retirement years. Many Australians are forced to sacrifice throughout their working life to make co-contributions to their superannuation to ensure their savings will adequately support them through their later years. But, under this Labor-Greens alliance, Australians have not been offered any certainties in relation to their superannuation. Policies have been chopped and changed. Ministers have come and gone and been reshuffled around Labor's revolving-door cabinet. Industry stakeholders have been left in the cold, with very little stakeholder liaison undertaken by this government when it comes to change in any sector, but particularly in financial services and superannuation.

The chronology of events tells the tale. In 2007, Labor promised there would be no change to superannuation—a promise which has been pathologically broken, over and over again. In the 2009-10 budget they reduced the concessional contributions cap to $25,000 per annum, indexed, with effect from the 2009-10 financial year from $50,000. They reduced to $50,000 per annum the transitional concessional contributions cap, applicable to individuals aged 50 and over, for the 2009-10, 2010-11 and 2011-12 financial years, from $100,000. On 1 July 2009 they reduced the transitional concessional contributions cap from $50, 000 per annum to $25, 000 per annum for 2009-10 and later years, but they promised that amount would be indexed to changes in AWOTE. On 2 May 2010, and in budget 2010-11, the concessional contributions cap for those over age 50 with less than $500,000 in total superannuation benefits was permanently raised from $25,000 to $50,000. This must all sound very confusing to anybody listening—and it is. On 29 November 2011, the indexation of concessional contributions caps were paused for one year—that being 2013-14. But, in the 2012-13 budget, we saw the deferral of the 2010-11 budget measure to increase the concessional contributions cap for individuals over 50 with a superannuation balance of less than $500,000 from 1 July 2012 to 1 July 2014.

Be that as it may—despite all of these changes and the broken promises—the coalition will not oppose these bills tonight, even though they contain a tax increase on superannuation. Unfortunately, Australia is not in a position to oppose these changes, due to the Labor created and fostered budget emergency—the unfortunate legacy of the Rudd and Gillard governments and the past two parliaments that they have overseen. However, all that Labor's cavalier attitude towards superannuation has done is to give Australians a clear choice at the next election. On the one hand, Australians can choose the coalition, led by Tony Abbott and offering stability and clarity in relation to superannuation policy. On the other hand, Australians can choose the high-taxing and erratic Labor Party that has failed to provide Australians with the certainty they deserve in relation to superannuation arrangements.

Mr Abbott has made a firm commitment to Australians that, if we are fortunate enough to obtain government after 14 September, we will restore certainty and stability to Australia's superannuation system, allowing Australians to plan and save for their retirement with both security and confidence. In almost no area of government is this as important as in superannuation, as people today will be making decisions that impact not over the next months or even over the next few years but over decades. Increasingly, I am hearing from Australians who have been fearing for their future since the current government came to power and set about tearing up certainty in our superannuation system.    Over the past five years, Labor has constantly and continuously targeted people saving for their retirement with significant tax increases and changes. They have targeted Australians doing the right thing—Australians saving to achieve a self-funded retirement, so as not to burden the public purse in future years—with a whopping $9 billion in increased taxes on super savings so far and with a clear threat of more to come.

Why are they attacking the superannuation system so savagely? It is because Labor simply cannot manage their own budget. They have had to penny-pinch and revenue-raise at every turn to compensate for their reckless waste and mismanagement over the last two terms of their government: the tragic pink batts scheme, the cash-for-clunkers scheme, the border-control budget blow-out, the Julia Gillard memorial school halls, the canteens you cannot even fit a pie oven in and the mining tax that has failed to raise them any revenue. That is right—they have wasted their opportunity.

They have not delivered good policy outcomes for Australians. They have wasted Australian taxpayers' money. And it is all at a time of record terms of trade, when they should have been delivering surpluses and saving for the nation's future, not dipping into the savings of individuals who have made those sorts of prudent decisions for their own benefit. I find it incredible that they now have the audacity to try to balance their books with the superannuation of the Australian people, money that Australians have worked hard for and money that rightly belongs to them.

The fundamental difference between the coalition and Labor is that the coalition believes governments, like families and businesses, have to live within their means. Our funded commitments stand in contrast to Labor's record of broken promises to Australian families. These bills contain a tax increase on superannuation that the coalition would not wish to see in place, but Labor leaves us with no alternative but to support that tonight. We understand the importance of a self-funded retirement and we understand how everyday Australians sacrifice now so that they may look after themselves in the future, without reliance on the taxpayers of Australia.

Unfortunately, after years of waste and mismanagement, we have no choice. These bills make technical changes to the low-income super contribution, a payment this government cannot afford because they have linked it to the failed mining tax that has not raised any meaningful revenue. These bills are largely just another attack on our superannuation system from a desperate and flailing government. But the coalition has a better way. Our focus in government would be on encouraging increased voluntary savings to complement compulsory superannuation, if and when the budget can afford it. We will work with—not against—the superannuation industry and all associated stakeholders to ensure our superannuation is the most efficient, transparent and competitive superannuation system. We will make sure our system has appropriately high standards of corporate governance to ensure all Australians get the best possible value and maximise their superannuation savings. We will target our efforts to improve transparency and efficiency.

Unlike the Labor Party, the coalition recognises the importance of integrity of the system. We will not just pay lip-service to these traits. We will work to improve our system by improving governance and implementing a series of corporate governance reforms recommended by the Cooper review but not progressed by Labor. In particular, we have said that we would ensure there is a more appropriate provision for independent directors on superannuation fund boards. This is primarily by ensuring that directors who want to sit on multiple superannuation boards must demonstrate to APRA that they do not have any conflicts of interest. The disclosure of conflicts of interest should be mandatory and directors of superannuation funds must disclose their remuneration in line with the provisions that apply for publicly listed companies and other APRA regulated sectors.

This industry is worth trillions of dollars. It is vitally important that we get it right. A coalition government would improve transparency in the information that is available to Australians when selecting their super fund so that they may easily compare the market options. Additionally, we would seek to address the issue of excess contributions to make sure that Australians are not unfairly penalised for genuine, unintended errors when contributing to their super, of which part is dealt with tonight.

We will also cut red tape in this area and streamline employers' superannuation reporting by implementing a superannuation clearing house through the Australian Taxation Office. We will review the regulatory barriers currently restricting the availability of relevant and appropriate income-stream products for Australian retirees. And we will also review the current mandated minimum-payment levels for account based pensions to assess the adequacy and appropriateness in light of current financial market conditions.

This is a very comprehensive set of initiatives from an opposition that has seen how damaging and destructive the last two terms of government have been on this vital sector of our economy. Most important is the promise from Tony Abbott earlier this year that a future coalition government will not make any unexpected detrimental changes to people's superannuation arrangements—because, as in so many other areas of government, Labor has failed to provide Australians with certainty in investing in superannuation.

On the third anniversary of the installation of this Prime Minister—who was installed in our country's highest office by the faceless men of the Labor Party amid a flurry of promises about sunlight and transparency—this chamber finds itself subject to the guillotine, yet again.    Just 16.25 minutes is available to each in this suite of four superannuation bills that represent more broken promises from this Labor government. Nothing has changed. It is still the faceless men in charge of the Labor Party and the Gillard government has failed to restore transparency and accountability to the parliament of Australia. The coalition applauds and supports Australians saving for a self-funded retirement and on 14 September we offer those Australians a real choice.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I would like to contribute to the debate on this superannuation bill, the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2013, and related bills. I simply do not trust the government when it comes to superannuation. I will give you an example. When I came to this place in 2008, at the age of 53, I had a total of $1,650 worth of superannuation—not much for someone of that age, but that is from farming and small business. I salary-sacrificed a lot to build that superannuation up. I contributed a couple of years ago up to the maximum of $50,000, with the employer contribution and my salary sacrificing.

Now we have a situation where the government has taken those total contributions from $100,000 down to $50,000 and then down to $25,000. So this year, of the $6,000 or $7,000 of super I will be paid, I will pay 46 cents in the dollar in tax. At the age of 58 I am doing my best to get a nest egg together for retirement. I find that I have to pay 46 cents in the dollar of $6,000 or $7,000 when my total super is now at about $148,000. Why is that? I thought super was to make people self-sufficient in retirement. This is the government's grab on superannuation and no doubt they are looking very closely at the $1.5 trillion that has been put away in super funds.

Since coming to government, Labor has hit Australia's savings with nearly $9 billion in increased taxes and charges on superannuation. Three point three billion dollars of this has come from low-income earners through various reductions to the government's super co-contribution scheme, established under the previous, coalition government. This Labor government has reduced the co-contribution maximum per year from $1,500 to just $500. It also lowered the threshold at which the co-contributions phase out. When this first came in, my son was an apprentice builder and my eldest son, an accountant, said to him, 'Tom, you should try and put some money aside because when you do the government will make a good contribution of $1,500.' That my son did, but now he sees that eroded away to just $500. He is still what I would class as a low-income earner; he has been a qualified builder for a couple of years.

A coalition government will look to provide certainty and stability in superannuation by not making unexpected detrimental changes to the superannuation system in the next term of parliament if we are elected. This will allow people to save for their retirement and plan with confidence. This is most important. We all know the statistics about our ageing population and how much we need people to be self-sufficient in retirement, not reliant on taxpayers for pensions, health benefits, aged-care facilities et cetera. We know the drain on the public purse is enormous and this will only get greater as a larger number of Australians tend towards those older years, if I can put it that way.

The coalition plans to increase the compulsory superannuation contribution from nine per cent to 12 per cent, with a pause for an extra two years at 9.25 per cent; improve corporate governance arrangements for superannuation; properly address the issues of excess contributions to make sure Australians saving for their retirement are not unfairly penalised for genuine unintended errors; pursue opportunities to cut unnecessary red tape in superannuation; remove regulatory barriers currently restricting product innovation and improved options to manage financial risks in a retirement phase; and revisit concessional contribution caps in super co-contributions for lower income earners once the budget is back in a strong enough position. Finally, a coalition government will conduct a financial systems inquiry which will include the superannuation industry. The coalition will continue to consult with the broad cross-section of stakeholders in the super industry in the lead-up to this year's election. I would also like to add that allowing trustees to cap asset based administration fees is most important.

The government anticipates that this bill is the fourth and last tranche of legislation implementing the MySuper proposals from the Cooper review. The first bill, tranche 1, established core provisions for MySuper, which included rules around the charging of fees in relation to member accounts. This included, in effect, a ban on caps for account administration fees. As paragraph 6.11 of the tranche 1 bill explanatory memorandum discussed:

For any fee that applies to all members of the MySuper product, such as an administration fee or an investment fee, each member is to be charged the fee under the same charging rule. For example, if one member is charged a percentage of their account balance in relation to the MySuper product as an administration fee, then each member of the MySuper product should be charged the same percentage of their account balance in relation to the MySuper product at the same point in time …

This caused an adverse reaction among industry stakeholders at the time. These stakeholders, as well as the coalition, were anticipating that the government's current and final MySuper bill, tranche 4, would include amendments to remove this unnecessary and counterproductive requirement. However, such amendments were not forthcoming.

As I said, there is roughly $1.5 trillion of superannuation in this nation. There is no doubt that this current government tried to do its best to get what it could out of the tin of super money in an effort to bring about its promised budget surplus—a budget surplus that we were told on literally hundreds of occasions would be delivered in this financial year, only to find that the budget would be some $20 billion plus in the red. After the election on 14 September, we will get the true figures on where the budget is at this time. Notice how the election date will take place before the fiscal outlook for this financial year is reviewed for the public of Australia.

Ursula Stephens (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time allocated for consideration of these bills has expired and the question is that these bills be now read a second time.

Question agreed to.

Bills read a second time.

John Hogg (President) Share this | Link to this | Hansard source

In respect of the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2013, the question is that the amendments numbered (1) to (7) on sheet 7415 circulated by the opposition be agreed to.