Michael Hatton (Blaxland, Australian Labor Party) Share this | Hansard source

John Howard opposed it, as the member for Fraser rightly interjects, every step of the way. The people wanted the money in their kick, in their pocket. They could not see the reason why they should go without.

I happen to know about this because, from 2 January 1985, for 11¼ years, I ran Mr Keating’s electorate office. I was intimately involved in government matters, not just at electorate office level but at a policy level as well, across a whole range of things. I know the person who constructed Labor’s superannuation program, in consultation with the Treasurer and others. He happens to be called Ken Henry, and he is the current Secretary to the Treasury, one of the greatest servants this Commonwealth parliament and the people of Australia have ever had, an extremely smart person. I discussed the innards of what we were doing with super with Ken Henry in the Treasurer’s Parliament House office as it was being constructed.

I know how difficult, indeed impossible, it was to get Australian punters to front up and say, ‘I won’t put it in my kick; I’ll actually invest this for the future.’ If it was putting it on a nag at the Sandown races or doing a bit on the Melbourne Cup, people might understand it. But when it came to saying to people, ‘We want you to voluntarily provide for your future,’ well, the reality was we tried that for three years, and guess what happened? Nothing, virtually. As much as we tried to convince, argue, debate with and cajole the Australian public to come at this, they really did not want to pick it up. So the government was forced to legislate the superannuation guarantee. And it is the nine per cent superannuation guarantee that provides $65 billion of ballast not just to the Australian superannuation industry but to the Australian economy.

I know the effect of this and I know the fundamental design. Paul Keating’s view was that there was only one way we could escape one of the great tyrannies of Australian economic history, that of being almost entirely dependent on money coming in from overseas, whether it was a case of simply attracting it through higher interest rates than were available elsewhere—and it is still a commonality for Australia that to get the investment in we have to have higher rates than the United States and Europe—or whether it was to attract investment across the board if it was not just in physical assets. The whole history of Australia is that Australians have never been able to buy the farm because we have not had the savings base to do it. That is why various Europeans, Americans and people from the Middle East have all had their go in the long line of peoples who bought into Australia and made profits. But it has not adequately returned to the Australian people.

Paul understood very clearly exactly what needed to be done. We not only needed to get Australians to help to provide for themselves for the future because the age pension simply was not going to be enough, but we had to go further. Our stock market is structured in such a way that we did not have the depth that was needed. Once you go beyond the blue chips, which were well supported, there was not the depth that was needed at the second and third tiers so that the billions of dollars, running into the trillions, that would be poured into the market through Australian superannuation would percolate to every level—so that once the blue chips were filled to capacity it would overflow in a cascade into the other areas in investment activity. Look at the drivers now. For instance, there is a Western Australian superannuation company, a government employee company, that is a part owner of Bankstown airport in my electorate. Look at the fundamental underpinning of so much of our corporate activity: it is Australian industry superannuation funds. This is ballast for the broader economy that Labor created, and that is the foundation of our current prosperity.

This Treasurer has fraudulently argued that this government has done all the hard stuff. I will just remind the House of what this Treasurer has done. Faced with the budget situation we had, Mr Keating, when he was Prime Minister, changed what was going to be a tax cut into super. We did two things with the l-a-w tax cuts which this Treasurer from this dispatch box has, time and time again, fraudulently argued that we just frittered away and did nothing with it. I will also mention in passing something else he has made claims about. The first four surpluses ever for any Commonwealth government of Australia were in the Hawke-Keating years. The member for Bennelong when he was Treasurer did not put a surplus budget in, or go anywhere near it. He left us with a $9.6 billion deficit as he exited office but he did not even have the courage to own up to that. He said it was about $4 billion and when pressed a week before the election he said it might be about $6 billion. The member for Bennelong knew full well, because he had been briefed on it, that it was in the order of $9 billion to $10 billion. This Treasurer talks about the $96 billion worth of debt that he says was Labor debt. But, Mr Deputy Speaker, if you take $9.6 billion in March 1983 and extrapolate the value from then until now, the member for Fraser, who was an assistant Treasurer and has great arithmetic abilities, would be able to tell you that that would now be in the order of $40 billion to $42 billion that would be directly attributable to John Howard, the member for Bennelong, when he was Treasurer. That broke the back of the Australian economy and it took our government to lead us out of that.

The changes made in super and the superannuation guarantee, which the member for Bennelong and others on the government side voted against time and time again, are the foundation stones of modern superannuation. And guess what? It is nine per cent because this government came to office—this coalition government that does not believe in giving a fair go to the baby boomers who started late and who will still be relatively impoverished as a result of the measures that are coming through here. They are fine for the young people, but adequate provision has not been made for the baby boomers. And guess what? The baby boomers will not be 12.6 per cent of the total cohort in Australia in terms of age versus everyone else. Guess what? It is 25 per cent. You then have a look at how you adequately provide for them. In terms of aged care, under the Hawke-Keating government there was 15 per cent growth year on year in hostel places, a dramatic change in the way in which nursing homes were dealt with and the way in which they were built and funded. There was also a dramatic change in assisting people to be in their own homes. Why? Guess what? Something that this Treasurer invented or discovered, he thought—he said he really invented it, I think, just a couple of years ago—and that is intergenerational change. The baby-boomer phenomenon means we will have a doubling of that age cohort, and they have not saved as they should have because the circumstances have changed. What did this government do on coming to office? What did this Treasurer do? He said, ‘Oh, this is l-a-w tax cuts so they’re not going to be delivered.’

Under the impressive circumstances at the time, Prime Minister Keating said this: ‘Where we were going to give these as tax cuts, we are going to do two things. One, we are going to give some tax cuts one year early—that is, half of it, the first tranche, will be delivered a year early. Second, the other half will be changed into superannuation contributions—a full three per cent extra to take it from six to nine per cent of super.’ If we had been re-elected we would not now be at nine per cent superannuation guarantee but at 15 per cent superannuation guarantee. The current federal Treasurer is just like Bob Menzies, who, in the early 1950s, ripped away £100 million of pension funds that had been put away since 1947 and put it into consolidated revenue. This Treasurer took funds that would have gone into taking us to 12 per cent and then 15 per cent superannuation guarantee—not $65 billion a year but building into the trillions of dollars of ballast for the Australian economy. That is what a farsighted, instrumental, activist government led by a clever Treasurer and then Prime Minister does.

What this bunch has done is simply take that and ride on the back of it to provide certain benefits to people who are better off. The vast majority of people in the baby-boomer class that Howard has treated as battlers will continue to battle throughout their whole time. There are other provisions here in relation to people who are 60-plus and in relation to people who are 70-plus. The current Treasurer and Prime Minister will allow these people to work longer and allow them to build up a bit more because they have not saved before, but over more than 10 years they have deprived them of the capacity to build what is really the minimum—15 per cent superannuation guarantee. Instead of this we have an expensive set of bills which do more for those people who already have rather than for those who were not compelled to save beyond the nine per cent.

We will support this going through, and I will support our amendments in relation to it. But it is a travesty of the first order that a Treasurer of the Commonwealth of Australia can so lazily claim that this is such a magnificent achievement when it is in fact a total repudiation of the needs of the Australian people. (Time expired)

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