Patrick Dodson (WA, Australian Labor Party, Shadow Assistant Minister for Reconciliation) Share this | Link to this | Hansard source

On behalf of the opposition, I rise to speak on the Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020. At the outset, I can confirm that the opposition will be supporting this bill. Labor has a proud track record on superannuation and will continue to fight for a stronger and fairer superannuation system. Our superannuation system sits alongside the Pharmaceutical Benefits Scheme, Medicare and the National Disability Insurance Scheme as a significant national achievement. Unfortunately, too many Australians still retire without adequate retirement savings. This is why our superannuation system needs to be strengthened and protected, not undermined. Every Australian deserves dignity in retirement.

As originally drafted, this bill contained a single schedule that amends the Retirement Savings Accounts Act 1997, the Superannuation Industry (Supervision) Act 1993, and the Superannuation (Unclaimed Money and Lost Members) Act 1999 to facilitate the closure of eligible rollover funds by 30 June 2021. This measure addresses recommendation 5 of the 2019 Productivity Commission inquiry into superannuation, which recommended that the Australian Taxation Office be responsible for holding lost superannuation accounts and that the Australian Prudential Regulation Authority oversee the winding up of eligible rollover funds.

These changes build on the 2019 protecting your super legislation, which saw low-balance and inactive accounts transferred by trustees to the Australian tax office but not to eligible rollover funds. Since the implementation of the protecting your super legislation, fund trustees have been required to transfer inactive or low-balance accounts to the Australian tax office. Eligible rollover funds were designed to look after unclaimed superannuation, but essentially they are now redundant. This legislation provides a timetable to wrap up the remaining ERFs by 30 June 2021, with funds transferred to the Australian tax office. This will allow the Australian Taxation Commissioner to reunite superannuation accounts they receive from eligible rollover funds with the members' active accounts. The Australian tax office has successfully reunited more than 2.1 million lost or forgotten superannuation accounts. This is a great success rate over a 10-year period.

Labor will continue to support measures that target duplication accounts and stronger, fairer superannuation schemes and systems. The opposition will be supporting the government's amendments, as circulated on sheet SH137. As outlined in the supplementary memorandum circulated with the amendments, the amendments delay the operation of the charges proposed to be made by schedule 1 of the bill to provide trustees of eligible rollover funds additional time to exit the market. In addition, the government amendments insert schedule 2 to the bill:

… to provide that a superannuation provider may pay to the Commissioner any amount it holds on behalf of a member, former member or non-member spouse, if it reasonably believes that paying the amount to the Commissioner is in the best interests of the member, former member or non-member spouse, and for reunification by the Commissioner of those amounts with the member, former member or non-member spouse's active superannuation account.

Australia has a superannuation scheme that is the envy of many countries around the world. It was established by a Labor government to ensure that people could live in retirement with a measure of dignity. This is not a history that is shared with those on the opposite side of the chamber. For decades now, the coalition in opposition and in government have worked to undermine and dismantle the system that has been helping to bring security and dignity to Australians in retirement, to reduce the burden on the social security system and to build our national prosperity. There are those opposite who would halt the rise of the superannuation guarantee or, worse still, abolish it altogether. Before the last election, Mr Morrison promised that he would leave superannuation alone, a very straightforward promise one would have thought. But now he appears to have changed his mind and he has a plan to cut workers' superannuation. Labor will fight this unfair plan. It is unfair that the Prime Minister and every other minister of parliament pulls in 15.4 per cent superannuation on their earnings, but the Prime Minister and government senators and members reckon that 9.5 per cent is enough for ordinary workers. Mr Morrison engaged consultants to try to back in his plan to cut workers' superannuation, and they said 9.5 per cent might be enough under certain circumstances. But, on further examination, these certain circumstances are wages growing by four per cent every year well into the future. When wages have not grown by four per cent for the last decade, this is simply fanciful. The Prime Minister will accrue more superannuation in two years than the average Australian retires on. It is absolutely critical that the Prime Minister keep his promise to leave superannuation alone.

Whilst Mr Morrison might not be backing workers to 12 per cent, Labor is backing workers with a 100 per cent commitment to the legislated superannuation guarantee rise. The Labor leader, Mr Albanese, and the shadow minister for finance, Mr Jones, reaffirmed Labor's commitment last week. We call on the government to make the same commitment. Freezing or repealing the legislation increases will not lead to pay increases and will not change super tax benefits for high-income earners. The original timetable has already been delayed twice. This has cost workers retiring today between $60,000 and $100,000 in their superannuation balances.

The Reserve Bank has identified low productivity growth, globalisation, underemployment and a decline in bargaining power—all of these—as drags on wages growth. Wages are weak not because of superannuation guarantees but because the government has no credible economic plan to raise them. We agree that workers need a pay rise. We do not think it should be paid for with super cuts. The last time the Liberals and Nationals froze the superannuation guarantee, what happened? Did we see an explosion in wages growth? No, we did not. Wages growth did not pick up. In fact, we had record low wages growth instead.

The Liberal Party has form when it comes to undermining superannuation. Those opposite have opposed every increase. Whilst this bill makes sensible changes that we support, we know what lies around the corner. Government senators continue to have free reign to advocate measures that will undermine the strength of our superannuation scheme and undermine a decent retirement for millions of Australians. It is time for the government to keep its commitment and unequivocally reaffirm the promise of the Prime Minister, Mr Morrison, before the last election when he said he would leave superannuation alone.

Andrew Bragg (NSW, Liberal Party) Share this | Link to 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.

Stirling Griff (SA, Centre Alliance) Share this | Link to this | Hansard source

Senator Gallacher, on a point of order?

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

It's a point of order on relevance and anticipation:

A senator shall not digress from the subject matter of any question under discussion, or anticipate the discussion of any subject which appears on the Notice Paper.

Senator Bragg has continually referred to things of no relevance to this legislation and has made false and misleading statements to the chamber, and does so on a regular basis.

Stirling Griff (SA, Centre Alliance) Share this | Link to this | Hansard source

I do not consider Senator Bragg's comments to be lacking relevance. The senator still has time to respond.

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

Thanks for that, Senator Gallacher. I appreciate that. It was good. This is a bill that's designed to improve the system, so I think that's good and I look forward to your support, Labor's support, for it. It's going to clean up the mess that was put in place by Paul Keating 30 years ago when he gave this scheme to the banks and the unions to run in their own interests, not in the interests of workers.

Opposition senators interjecting—

You don't care about the workers. Don't pretend you care about workers; it makes me sick.

This bill is going to improve the operation of the superannuation scheme. Accounts under $6,000 will have to go to the ATO. The ATO will then, through the tax file number matching system, relocate that money to the individual worker. So, ultimately, people will pay fewer fees because there will be fewer multiple accounts, and that is a good thing. But, best of all, in the case of eligible rollover funds, which because of this legislation will become a thing of the past, people won't be paying 1.63 per cent, on average.

Opposition senators interjecting—

It's really shameful that you would defend that.

Opposition senators interjecting—

I'll go through the fees.

Opposition senators interjecting—

I'm going to tell you. I know you're desperate to hear.

Opposition senators interjecting—

I'm going to tell you.

Stirling Griff (SA, Centre Alliance) Share this | Link to this | Hansard source

Senator Bragg, could you direct your remarks through the chair.

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

There's AMP Eligible Rollover Fund, 1.4 per cent; Australian Eligible Rollover Fund, 1.7 per cent; Australia's Unclaimed Super Fund, 50 basis points; SMF Eligible Rollover Fund, 2.48 per cent—wow! There's Super Safeguard, 2.84 per cent, and SuperTrace eligible rollover fund, 2.47 per cent. That's an average of 1.63 per cent. Those are shamefully high fees. It doesn't matter whether they're union funds, bank funds, industry funds or retail funds. We're not here to run people's agendas. We're here for the Australian people. So it is regrettable that, again, the interjections from the Labor Party show they're not interested in fixing this system. They only have sectional interests, which is very disappointing and unbecoming.

At the end of the day, it shouldn't matter to anyone what type of fund it is. These fees are ridiculous, and they'll be a thing of the past thanks to this legislation, which I look forward to seeing Labor support. Ultimately, this is another step in the journey to getting this system to a place where it does work. I accept that there are a range of views about superannuation, and I hear the interjections that come from Labor all the time. There are a range of views about this. There are some people in this place who would like to abolish super, and there are some people who would like to see a 20 per cent super guarantee. I am on the record as saying I think the idea is good but it should be recalibrated so it works harder for the workers.

I don't think we should be sitting in here running a protection racket for the banks and unions who've charged super-high fees for 30 years and have delivered nothing. The system costs more than it saves, it gets no-one off the pension and you defend it for reasons that are known only to you. But I think this is a good idea, to try to make the system work as well as it can. There's a lot more we should do. I commend Senator Hume and her excellent work and advocacy to the chamber and this bill.

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020. From the outset, let me say that Labor supports this bill and the government's amendments. The bill responds to recommendations of the Productivity Commission's 2018 report Superannuation: assessing efficiency and competitiveness and builds on changes contained in the 2019 'protecting your super' legislation.

This bill is part of a suite of initiatives that support the Australian tax office to reunite multiple inactive or low-balance accounts with members' active accounts. The bill finalises arrangements for the transfer of the money, in these accounts, from eligible rollover funds to the ATO. The eligible rollover funds were designed to look after unclaimed superannuation and their role is, essentially, now redundant. APRA will oversee the wind up of the fund. Under arrangements already in place, the ATO has been able to reunite multiple accounts, over two million that were lost, with their owners. The bill before the Senate will enable even more members to be reunited with their superannuation savings.

Labor has a very proud record on superannuation. Back in 1972, just 32 per cent of workers were covered by superannuation arrangements. This represented 36 per cent of male workers but just 15 per cent of females. It is the vision and determination of progressive Labor governments and Labor unions that delivered what is now a world-class universal superannuation system. That is why we are calling on the Prime Minister to rule out the freezing or appealing of the legislation that will deliver the super guarantee increase.

This government simply cannot be trusted when it comes to superannuation. John Howard froze super and said wages would rise, and they didn't. Tony Abbott froze super and said wages would rise, and they didn't. Scott Morrison wants to freeze super and says wages will rise, and they won't. The Liberals can't be trusted with your superannuation. They came into government in 2013 and froze super. Did wages rise? No. Wage growth has been the slowest on record under this government. It is a Liberal lie that freezing your super will lift your wages. It is a Liberal lie that is designed to suppress wages and super. And it is a Liberal lie that will leave workers worse off in their retirement.

Superannuation is a proud legacy of the Australian Labor Party, and we will always fight for Australians' superannuation. We will always fight for a dignified retirement for all Australians, and we will fight the attacks on superannuation by those on the other side. It was Gough Whitlam who first advanced the case for a national superannuation scheme, to improve equity and broaden superannuation coverage. He set up a national superannuation committee of inquiry but, unfortunately, by the time the committee reported, a conservative government was in power and it rejected a national superannuation scheme. Since then, the attacks from the other side have continued day after day, year after year, because those people opposite on those benches do not want Australians to be able to retire with their own funds and to retire in dignity. It was the Hawke Labor government and the Australian union movement that reignited the push for a national superannuation scheme. It was Bob Hawke who began discussions with the ACTU on broadening access to superannuation as part of the accord. Then with the support of the Labor government, the ACTU's national wage case claim sought a three per cent superannuation contribution by employers to be paid into an industry fund. The accord continued to deliver pay and super increases.

In 1991, Labor announced in the budget the superannuation guarantee. This was a historic moment that we should celebrate. This historic Labor initiative delivered a major extension of superannuation coverage, an efficient method of encouraging employers to comply with their obligation. What a great thing it is. It's not a scary thing; it's nothing to be frightened of when unions, employers and governments work together to deliver outcomes for the people of Australia. It's a great thing. It is nothing to be frightened of, because the people of Australia have benefitted from workers, employers and governments working together, and Australia is now the fourth-largest holder of pension fund assets in the world. We have almost $3 trillion in superannuation assets under investment; 15 million superannuation fund members own this national wealth. And because of this, generations of older Australians can retire with dignity.

Labor has continued to support positive changes to superannuation and its regulation. Too many Australians still retire with inadequate savings, and Labor will continue to protect and strengthen superannuation arrangements. That's why we are committed to seeing the legislated super guarantee rise to 12 per cent. We will continue to protect superannuation from attacks by Liberal governments. We know that the two previous delays to super guarantee increases have cost workers between $60,000 and $100,000 in their superannuation balances. Let's not forget that, in 1995, Tony Abbott said:

Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people. … The government is making us worse off now so that it will be better off in the future.

And his views live on.

Senator Rennick—hello, Senator Rennick!—has called superannuation a 'cancer' and went as far as to attack his own party, saying the coalition 'sold out its values when it didn't stop the cancer called superannuation'. It doesn't stop with Senator Rennick. I'm speaking after Senator Bragg, who believes there needs to be 'drastic surgery' to Australia's superannuation funds. And what would this drastic surgery look like? Senator Bragg last year told us exactly how he thought superannuation should be voluntary for low-income workers. Why do they need super? Why do they need to be able to retire with dignity? Then we have the member for Goldstein. In a recent motion in the House, the member claimed Australians are retiring in poverty because they are forced to save for superannuation at the cost of saving a deposit on a home.

The members' contortion of these important issues—saving for retirement and barriers to home ownership—shows just how unfit this government really is. It is true that many Australian families are struggling and that saving for a deposit and home ownership are out of reach. So wouldn't it be good if the government had a policy that improved access to affordable housing? Wouldn't that be good? It is false for the member to portray saving for home ownership and saving for retirement as a zero-sum game. Instead, the government should be working on plans to boost wages and boost retirement incomes. Since 2013, under this government's watch, wages have been growing at about two per cent a year and, again, this is the slowest growth on record since the end of the Second World War. As the economist Richard Denniss points out, low wages have been a goal of the coalition and of businesses for decades. We are told that low wages will deliver benefits that will trickle down to all Australians. Well, Australians are still waiting. Just one result of the government's wage suppressing policies is that it's even harder for people to save for a deposit to buy a home or for anything else. Another impact is that superannuation savings are also lower.

Jim Stanford of the Centre for Future Work says unprecedented low wage growth shows no indication of rebounding, and this is because low wage growth is the result of deliberate coalition policies. This was confirmed by former federal Treasurer Senator Cormann, who let slip that downward flexibility of wages was a design feature of the coalition's economic framework.

I also want to say, briefly, something about the effect that raiding super funds has had on retirement incomes. The Australian Prudential Regulation Authority has reported that more than $37 billion has been withdrawn from retirement funds through the federal government's COVID early release scheme. This represents 4.9 million applications by Australians to access up to $20,000 in both the previous and current financial years. This scheme has been accessed predominantly by people under 35. For people aged 30, $20,000 withdrawn last year would mean almost $80,000 less superannuation by the time they retire.

Industry Super Australia has said that the government scheme will leave younger people poorer at retirement. It said:

Busting into super early comes at a steep cost for the individual and future taxpayers. As a society we shouldn't be demanding our young people pay the price yet again.

One of the fathers of superannuation, Paul Keating, has noted that when the government allowed people to take money out of their retirement savings in super to spend now, it in effect asked those least able to afford it to stump up $30 billion worth of stimulus at the expense of their own security in retirement.

It was Labor that created Australia's superannuation system so that every Australian can have dignity in retirement. We know that government members are pushing to erode our world-class superannuation system, including by delaying increases and moving to a voluntary system. Only Labor will strengthen and protect our superannuation system for millions of Australians.

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

I rise today in support of the Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020. This bill reminds me of one of my favourite movies—I got to see it again last year during COVID—called The Untouchables. There's a scene whereby the great Jim Malone played by Sean Connery was pulled out of retirement and he was going to crack down on corruption and gangsters. In the scene where he gets killed—it's a fantastic scene; one of the best death scenes of all time—he's listening to music and cooking dinner. This gangster walks along the hallway, and it's all quiet. Jim Malone turns around and he's got a big shotgun. He goes, 'You're just like a wop. You bring a knife to a gunfight. Now get out you dago bastard.' He walks out along the hallway and, as he steps out the door, he's gunned down machine gun style—rat-tat-tat. Then he crawls back along, as he's bleeding out, and he calls Kevin Costner to let him know that the gangsters have got him.

This bit of legislation is pretty much like bringing a knife to a gunfight, because effectively it doesn't do enough to crack down on superannuation. What we really need to do is just get rid of the whole thing. I want to be like Eliot Ness, one of the world's most famous accountants, who cracked down. Superannuation is like a whole bunch of white-collar gangsters, Eliot Ness style, who are ripping $40 billion in fees off each year. This is gangsterism, legalised by white-collar corporates, and I don't know why we allow it to happen.

If Paul Keating had said to the Australian public—back in 1991 when he passed it in the August budget and then it was introduced July 1992—'In 25 years time, I'm going to take 10 per cent of your income and give it to someone you've never met and you may or may not get it back when you're 60,' do you think they would've voted for it? We don't know and we'll never know because there was never a mandate. There was never a referendum on this. What we do know, however, is that New Zealand had a referendum on it and they voted 92 to eight per cent against compulsory super.

You've got to ask yourself: what is it about Labor? Why are they so afraid to have a referendum on compulsory super? I'll tell you why: it's all about command and control. These guys don't want the workers to have their money—

Debate interrupted.