Nick Champion (Wakefield, Australian Labor Party) Share this | Hansard source

It is a great pleasure to speak on the issue of superannuation. I have spoken on it many times before. Let me at the outset that one of the things we are dealing with here is the legacy of former Prime Minister Paul Keating. He has spoken many times on this issue and on the need for greater national savings and greater provisions for retirement incomes for so many Australians. I think that it is worth acknowledging his role today.

The government’s superannuation plans do four main things. Firstly, they deal with the great, if you like, international economic challenge—that is, the inadequate savings of developed economies. Secondly, they help to rebalance our economy, which I think is a critical thing. Thirdly, they increase retirement incomes for Australians. Fourthly, they increase fairness and equity in our community.

On the issue of the economic and national savings, one of the critical problems is that in Anglo-Saxon economies there is a tendency to not save enough and to consume a lot. That is mirrored by the developing world’s tendency to save more than they consume. This has led to the sorts of economic problems we have seen in the United States, where debt fuelled consumption binges have led to asset bubbles and ultimately to those asset bubbles collapsing. One of the ways of avoiding that is to have a high national savings rate and to invest those national savings in productive investments, and that is exactly what superannuation does. The government superannuation plans add $85 billion to our superannuation savings over the next 10 years and an incredible $500 billion by 2035. That is an economic buttress against future shocks. That is a way of making sure that the nation’s economic bounty is invested in productive long-term investments. That is good for individuals and it is good for the economy.

The second thing our superannuation plans do is rebalance the economy. This is terribly important. There are a lot of debates about foreign ownership—particularly about Chinese investment and other foreign investment in Australia. One of the things superannuation does is ensure that there are adequate domestic savings to invest in productive Australian assets and indeed to invest overseas. Foreign ownership is always a vexed question, but one of the causes of foreign ownership is that we do not save enough. It is absolutely critical that superannuation is there to increase savings.

The third thing is increased retirement income. I have met many individuals who have had inadequate savings. For an employee aged about 30, on average weekly earnings, the government’s changes will add $108,000 on average to their superannuation. For a woman aged 30 today who has an interrupted work pattern—which is typical amongst women, particularly if they have children—it will add another $78,000 in superannuation. They are tremendously important figures, and people know the difference, when they come to retire, that having those extra savings will make. Overall, the superannuation savings of 3.5 million Australians on low incomes will be boosted by $830 million over the forward estimates.

This brings me to my final point, which is that the government’s superannuation changes increase fairness and equity in our community. That is one of the most critically important things, I think. We have a problem not just with the distribution of wealth between rich and poor but also with the distribution through the time of life when you get to spend it. Typically, when you are working, you do tend to have enough money in your pocket to get by. Unfortunately, when you retire, you often do not. This is not just about redistributing wealth from rich to poor or from capital to labour, but also from a time in your life when you have an abundance of income to a time in your life when you do not. That is a critical point. It is important for fairness, it is important for economic efficiency, it is important to the country and we can only hope that the opposition sees the light and supports the government’s changes.

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