Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Hansard source

I would like to thank the member for Robertson for her contribution, and to thank all those who have spoken on this legislation. I rise to sum up this cognate debate on the Superannuation Legislation Amendment (Stronger Super) Bill 2012 and the Superannuation Supervisory Levy Imposition Amendment Bill 2012.

Our superannuation industry is one to be proud of, a distinct national advantage and one that is forecast to grow very significantly over the next 20 years. Our superannuation system currently manages $1.4 trillion for Australians. This amount will reach $6 trillion by 2030. Despite this, there are many inefficiencies still to be fixed in our system. There are currently approximately 12 million members with superannuation, yet there are over 31 million accounts, and there are over five million lost member accounts with a total value of over $20 billion—that is, an average of one lost superannuation account for every two working Australians.

The superannuation industry can do better in processing transactions, and there are still too many paper based systems. These inefficiencies lead to higher administration costs. Currently, different superannuation funds require different information from employers. This unnecessarily increases the compliance burden on Australia's employers. Ultimately, these inefficiencies lead to higher administration costs which consequently reduce the retirement incomes of all working Australians. The industry has attempted to develop its own voluntary standards over many years but has been unable, thus far, to achieve consensus. This is why the government has decided to take a leadership role by introducing this legislation, which will improve the efficiency of the superannuation industry under the SuperStream reforms. These reforms flow from the recommendations of the Cooper review inquiry into the superannuation industry.

Schedule 1 of the Superannuation Legislation Amendment (Stronger Super) Bill 2012 introduces the framework for the development of common standards and processes for superannuation transactions. Supporting regulations and legislative instruments will prescribe the detailed requirements underlying this framework. By setting down standardised rules for how funds transact with each other, and by setting standardised requirements for the information that funds can request from employers, significant efficiencies will result, ultimately lowering administration costs, simplifying processes for employers and for funds, and resulting in a more timely allocation of contributions to member accounts.

The government has adopted a staged approach to implementation to minimise the impact on the superannuation industry and on employers. Rollovers between superannuation funds will be required to comply with the new standards from 1 July 2013. New standards dealing with contributions from employers with more than 20 employees will apply from 1 July 2014. These standards will then apply to smaller employers from 1 July 2015, subject to further consultation on their impact.

Schedule 2 of the Superannuation Legislation Amendment (Stronger Super) Bill 2012, together with the Superannuation Supervisory Levy Imposition Amendment Bill 2012, enables costs to government associated with the implementation of the SuperStream measures to be recovered by a levy on APRA regulated funds. The superannuation industry's own estimates show that the SuperStream reforms of this government will deliver savings of up to $1 billion per annum. The benefit of these savings will flow through to members in the form of lower fees and charges. When averaged out across the number of accounts in the superannuation industry, the savings are in the order of $30 per account each and every year which significantly exceeds the transition costs involved in implementing these reforms.

The government will be bringing forward further legislation to complete the package of SuperStream reforms. This will include announced reforms to further benefit members, such as a new facility to enable members to easily look up and keep track of their superannuation. Fund members will also benefit from having low, inactive accounts consolidated automatically.

There are costs associated with implementing all these reforms. The most efficient way to meet these costs is by collecting them directly from the superannuation industry. The levy is a temporary one. It will only collect the costs that the government incurs in supporting the implementation of all these reforms. The costs will be recouped over six years, but must be considered in the context of the annual long-term savings of $1 billion estimated by industry.

These are real, important, significant and wide-ranging reforms. They will be implemented in a staged approach across a number of years. For these reasons, the government is establishing a SuperStream Advisory Council which will have the role of providing advice to government on issues relevant to the successful implementation and maintenance of the reforms.

I must acknowledge that the coalition has also acknowledged that the SuperStream measures have the potential to deliver real savings that will benefit superannuants, and that it supports changes that make the superannuation system more efficient, transparent and competitive. Valid feedback has been raised in relation to the provision of additional ongoing information in relation to SuperStream. While the government has already released some of the information on the breakdown of costs, further information will be released shortly. The government also acknowledges the contribution of the Parliamentary Joint Committee on Corporations and Financial Services, and will consider how best to implement its recommendations about enhanced reporting by the ATO.

Finally, in relation to the matter raised by the member for Bradfield with respect to the strict liability provisions, I can advise the legislation provides a flexible compliance framework so that compliance action can be taken where necessary. However, the Australian Tax Office will take an educative approach in the first instance, as advised at the committee hearings. Secondly, I note numerous strict liability provisions that already exist in superannuation legislation were introduced by the Howard government in 2000. I commend the legislation to the House.

Question agreed to.

Bill read a second time.

See this speech in context