Jason Falinski (Mackellar, Liberal Party) Share this | Hansard source

Section 47 of the Competition and Consumer Act outlaws exclusive dealing. An exclusive deal occurs when one person trading with another imposes restrictions on the other's freedom to choose with whom, in what or where they deal. The Liberal Party is a political movement whose philosophy is grounded in maximising individual freedom. The Labor Party, on the other hand, is about limiting individual freedom, maximising government control and exerting the tyranny of the state on its people. As a movement, the Liberal Party will always seek to maximise the freedom of the Australian people, consistent with the freedom of others.

Third line forcing is a form of exclusive dealing and is illegal throughout Australia. Third line forcing occurs when a business requires a purchaser to buy goods from a particular third party. Third line forcing could occur if a computer store sold you a computer and required you to buy software for that computer from the software store next door, even if that software store was twice as expensive as the software store across the road. It's bad for our economy and consumers because it limits your freedom to choose and increases your costs. Businesses which engage in third line forcing can be hit with fines of $10 million for each and every breach.

It's therefore a curious peculiarity that, while we outlaw third line forcing for business, it's alive and well in a very damaging form in our superannuation industry. That is to say: there are employers of about one million Australians, who, under federal enterprise bargaining agreements, require their employees to have all their compulsory superannuation guarantee payments paid to one fund and one fund alone, usually, not surprisingly, an industry superannuation fund. If that employee has an account with a different super fund from a previous job, they are prohibited from having their new employer pay superannuation guarantee payments into that fund, even if that means they pay double the administration fees, double the insurance premiums and double the hassle of red tape. It does not matter.

What if a prospective employee refuses to have their super paid to a fund they don't like? Put simply, if they refused to sign away their freedom of choice, they'd miss out on the job, under federal enterprise agreements enforced on people without their choice or consultation. Put simply, this is the effect of these draconian and, quite frankly, immoral measures. They affect one million workers, or nearly 10 per cent of all Australians in work.

The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017 ensures that those one million workers have freedom of choice, that they can choose the best superannuation to suit their future and their retirement. It ensures that they can eliminate the duplication of administration fees they pay to an unwanted industry super fund, that they can eliminate the duplication of unnecessary insurance premiums that they had no choice in taking up and that they can maximise the balance of their superannuation savings in retirement and minimise their dependence on the pension and future generations to provide for them.

Today there are approximately six million Australians with more than one superannuation account who are burdened by this duplication. The government's measure will reduce the number over time. According to David Murray, who chaired the 2014 Financial System Inquiry: 'The Financial System Inquiry found that the outcomes for members were weaker than they should be, the value in the system was weaker, and we found, as a consequence, that the value of the superannuation system to the broader financial system and therefore the economy was not as good as it should be, driven by a weakness in competition around choice of fund, choice of product, a sameness of asset allocation in the system and weaknesses in information for members.' I think David Murray is the master of understatement. There are many reasons why people want to be able to choose their own fund, including as a result of personal circumstances. But do you know what? It doesn't matter. It's their money, and they should have a choice as to where it goes.

The Heydon royal commission heard evidence from Mr Paul Bracegirdle, who, when he became a full-time employee of Toll Holdings Limited, discovered that he was not able to have a choice of superannuation fund under the arrangements agreed between Toll Holdings Limited and the TWU. Mr Bracegirdle had personal reasons for wanting to choose his superannuation fund. His daughter is disabled and will never be able to work. He wanted to choose his own fund because he believes that will enable him to plan the best future for her.

The trade union royal commission also heard evidence that TWU's super provides a large income stream each year to the TWU. For example, according to John Maroney, the CEO of the Self Managed Super Fund Association, a common scenario for many SMSF trustees, of which about 60 per cent are aged 55 or older, is to work in part-time jobs under an enterprise agreement while transitioning to retirement. The fact they can be employed under an enterprise agreement can dictate where their superannuation guarantee contributions go. We believe this is unfair and inefficient and it needs to be changed.

It's not just self-managed super funds that are affected by lack of choice. Arrangements that fail to give employers or employees any choices as to where their super guarantee contributions go may have widespread negative consequences, of which the most significant is accounts proliferation resulting in multiple sets of fees and insurance premiums, both of which can erode superannuation balances unnecessarily. Equivalent third-line measures, if adopted by the banks, would see uproar by the Labor Party and the Greens and calls for a royal commission. This is why I'm pleased to report that the shadow Treasurer, the member for McMahon, agrees with the proposals of this bill. In 2015, he said:

… there's a relatively small number of circumstances where an enterprise agreement says you can only go to that fund: that fund alone. And the Government has said that they'd introduce more choice. Of course, that's something which would be fine. Who could argue with more choice for members?

While I disagree that 10 per cent of Australian workers being impacted by this draconian measure is a small number, I'm glad that the shadow Treasurer agrees with the government's approach. This measure is further evidence of the Turnbull government backing workers. Malcolm Turnbull and the coalition government don't just say we have workers' backs; our actions prove it.

While the member for McMahon may back this change, there may be opposition from the Labor Party and the Leader of the Opposition to this freedom of choice measure, but that's because the Labor Party benefit from the impacted one million workers disadvantaged. While the Liberal Party stick up for the worker, the Labor Party prey on their vulnerability. Let's not forget that, over the past 10 years, industry super funds have given $50 million to unions which fund the Labor Party. Let us realise that it's estimated that the industry funds will give $22 million of workers' retirement savings to unions every year by 2027. While some may call this a gift, Australian workers would be justified in calling it theft.

I'm pleased that these freedom of choice measures will hit many industry funds where it hurts, loosening their unfair grip on workers' super and, further, preventing the Labor Party's hold over workers' superannuation. Let's bear in mind that it's these not-for-profit industry funds which spend millions of dollars a year on TV advertisements to Australians who are forced to buy their product. How is that to the benefit of the workers and account holders? Did you know that these same industry super funds, which one million Australians are forced to join, also spent several millions of dollars establishing a left-wing online newspaper? How is that to the benefit of workers? When it comes to protecting workers, the Leader of the Opposition and the Labor Party are all talk and no walk; all smoke and no chimney; all sizzle and no steak. Instead, their actions prove they are willing to sell workers out for their own personal gain.

It is true to say that the Labor Party and the Leader of the Opposition are to workers rights what Dennis Denuto is to the competent practice of constitutional law. During his time as the national secretary of the AWU, the Leader of the Opposition was part of the furniture in a culture of selfishness. His agenda entailed advancing two key interests: that of himself and that of the Labor Party, which was really all about himself. This Leader of the Labor Party stands for nothing but advancing himself. How did signing up the entire membership of the Australian Netball Players' Association to a union and invoicing them $9,000 without their knowledge benefit netballers? This was all so the AWU could have more votes in Labor Party preselections. How did this benefit workers? It didn't. How did the donation of $25,000 of union and workers' money to the Leader of the Opposition's own election campaign benefit workers? It didn't. The Labor Party may call this politics, but would the Australian people call it honest? Only the Turnbull government can be trusted to look out for workers.

This bill also rectifies another curious peculiarity. This bill closes a longstanding loophole which has been exploited by some unscrupulous employers to short-change their employees' salary sacrificed super contributions to reduce their own superannuation guarantee obligations. In other words, there are instances where employees who entered salary sacrifice arrangements discovered that their superannuation had increased by less than it should have because employers used salary sacrifice amounts to satisfy their superannuation guarantee obligation or based their superannuation guarantee contributions on the lower post-salary-sacrifice earnings base, a legal loophole which is really a form of theft. This loophole has seen an estimated $1 billion stripped from retirement savings by dodgy employers.

Consumer advocates CHOICE fully support these measures, describing them as a commonsense reform. Fixing this legal loophole was one of the key recommendations of the government's superannuation guarantee cross-agency working group. To address these inappropriate practices, we are taking steps to ensure that an individual's salary sacrifice contribution does not reduce their employer's superannuation guarantee obligation in any way. If hardworking Australians are to continue to have confidence in the integrity of the superannuation system, we must ensure employers are paying workers their full entitlements, whether they are wages or superannuation.

The government's changes will give members confidence that salary sacrifice contributions boost their retirement savings as they intend. These changes will no doubt also help the budget bottom line as people with more super will need less government assistance in their later years. I commend the bill and this measure to the House.

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