Deborah O'Neill (Robertson, Australian Labor Party) Share this | Hansard source

Let us just talk about Australia once more. I notice that on the other side we have a member who could not wait for the moment to jump in with another negative, damning indictment of something in Australia. There is so much to celebrate here, but they will always look for the negative; they will always talk us down instead of talk us up. Australians are getting well and truly sick of that. When 1 July came Australians saw that it was mythology that had been created by those on the other side, and they are just starting to wake up to the fact that there is a great Australian future out there for them to be a part of.

I state again the very important, historic fact that for the first time in our history, right now under a Gillard Labor government, with a leading Treasurer, Australia has a gold-plated AAA rating from all three global ratings agencies. To put that in perspective, which is something you will never get from those opposite, we are one of only eight nations around the world to achieve this with a 'stable' outlook. That critical perspective is a lens through which we can see just how strong the Australian economy is and how secure the fundamentals of this economy are.

We are in a great position at this time to move these amendments that introduce a retail market for Commonwealth government securities and develop further deep and liquid bond markets for corporate and, now as a result of this legislation, for retail bond owners. These reforms will make it possible for mum and dad investors to buy into some of the safest bonds in Australia. This, at heart, is Labor policy. It is to make accessible things that those opposite would make and keep inaccessible, things that are vital to success in our country, things such as education and things such as financial markets with low risk. This is important for ordinary Australians and we are doing that. It is at the heart of Labor policy.

We are aiming at enabling everyday Australians to invest in their own nation safely and with guaranteed results, and we intend to use that to help pay for a better future. Giving everyday Australians this opportunity is an important first step in introducing thousands of individuals and families to the share market and to the benefits that come from investment. Perhaps that benefit will be some extra retirement income; perhaps it will be to help prepare for the purchase of a second car or a new house or maybe it will be to help Australians become just a little more comfortable from day to day.

These changes will provide retail investors with a benchmark for other investments and opportunities in the finance world. Similarly, for those Australians already engaged in the share market these amendments will also provide the opportunity for a more diversified portfolio by creating a relatively safe buy-in and a steady dividend at maturity.

While the allure of a high-risk investment is something that appeals to some, there are many who are certainly not interested in high-risk investment. It is certainly not a great place to start—the high-risk investment end. People want to start somewhere safe when they first get involved in investment, and this Commonwealth Government Securities Legislation Amendment (Retail Trading) Bill 2012 will enable so many people, previously unsure of their footing in the market, a place to wet their toes and get started on their journey of handling and managing their own investment.

A couple of weeks ago in our last sitting period I had a visit from the students of Umina Public School. At the time that they were visiting and sitting upstairs I was actually speaking on our MySuper provisions. I took the opportunity when I went out to speak to the kids to ask them if anybody knew what superannuation was. I can certainly say that, when I was a student in year 6, superannuation was not anything that I knew about or had heard about and it certainly was not anything that my parents had or knew about or would talk about. It was the Labor Party that brought superannuation in and made it a feature of our economy and a feature of the lives of those people who rely on Labor to give them a fair chance and to give them dignity in retirement and the freedom that a lifetime of hard work and saving can make possible with the support of a superannuation structure.

When I left the chamber and went to meet those students there were a few who at the tender age of 11 and 12 knew what superannuation was. When I explained to them that if they were fortunate enough to get a job in Umina down at Woolworths, Coles or any of the other small traders in that wonderful shopping strip on the Central Coast—which people should come and visit to help out with our tourism industry—the students were very pleased to understand that their retirement was going to be part of the consideration for the future because of what this Labor government had done.

When that came in there was a degree of financial literacy that was much lower than is currently the case. Right now this bill will have a product come onto the market that will make it so much easier for ordinary investors to move forward safely and take an investment of very low risk with government bonds.

In their submission to ASIC on this piece of legislation, the National Australia Bank indicated that there has been an increased demand for these securities driven by more and more local investors moving into retirement. We do have 4.6 million baby boomers reaching retirement with a higher level of education than many who reached that age in former decades and a very great interest, because of their growing financial literacy through their engagement with their superannuation, in how they can make their money last them better. Many of these boomers have already got some money in the market and, after the learning experience of the global financial crisis, they are very much looking at decreasing their level of risk and diversifying their portfolios. The Reserve Bank has also noted that some other investors are moving their portfolios away from high-risk, high-yield financial assets in favour of lower return but less risky deposit based assets.

Due to their relative difficulty to acquire, bonds currently make up less than one per cent of self-managed super funds. But, once this legislation is enacted, it would be beneficial for an emphasis to be put on education about these new financial assets. For many ordinary Australians there will be a dictionary of new terminology that they would previously have been unfamiliar with, but they have increasingly become familiar with the risk of volatile markets and volatility in interest rates. Through that awareness, Australians are ready to engage.

I want to take the opportunity now to highlight the fact that ASIC is overseeing a significant effort to increase Australians' financial literacy. For those who are in the gallery this afternoon and those who are listening, a simple google search of financial literacy will bring up the www.financialliteracy.gov.au site. That is the first thing that will appear. There are a number of links to wonderful programs in there that can help people develop financial literacy. It is never too late to start learning new things. If people do not have a great understanding of the financial market and they are interested in financial literacy this website is a wonderful place to start.

There is a link to a site called MoneySmart which I understand has a very good mobile app. I happened to see a couple of young people discussing this and looking at this mobile app in a local public bar recently. A few questions were being answered by using that MoneySmart website. Very importantly too, the MoneySmart website has a teaching component so that teachers who want to do real-world literacy with their students can use these tools to engage in financial literacy awareness as well as teaching them important management skills.

While this will be a new opportunity for many Australians, there will be a requirement that efforts are taken to ensure protection for new investors. These measures will ensure that financial services providers will have to comply with a range of licensing, conduct and disclosure requirements when they provide their services in relation to Commonwealth Government Securities depository interests. As an example, financial advisers providing personal advice to a retail client about CGS depository interests will have to be licensed and supervised by ASIC before they can do so. They will also have to give the client a statement of advice setting out a range of information relating to their advice, as required under the law.

The amendments in this bill will also require information statements to be provided to retail clients when they are given personal advice about CGS depository interests. The information statements will take the place of the product disclosure statement that is usually required for a financial product. The government considers that tailor-made disclosure documents are appropriate for CGS depository interests because they are a particular type of safe and simple investment.

The establishment of an active retail CGS market will constitute an important step in the formation of a deep and liquid corporate bond market, and I look forward to the opportunities that this will bring to Australians across the nation. This is a critical reform, and I commend the bill to the House.

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