Wednesday, 12 February 2020
Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019; Second Reading
Thank you for the opportunity to speak on this legislation, the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019. I think it is important that the debate that we are undertaking now sends the strongest possible signal to working Australians about what is being done to their prosperity, both now and in retirement, because what we have is this faux concern of conservatives about the incomes of working Australians, claiming that greater choice needs to be provided to working Australians about their retirement incomes. On its face, absolutely no-one would have an argument about choice—people should be able to make, and are entitled to make, decisions about what's best for them—but always be concerned when a conservative is saying 'working Australian' that they've got their best interests at heart by providing choice.
The member for Cowan just outlined the number of people, who are denied choice as a result of enterprise agreements that cover them, is about seven per cent of people. It's probably about one per cent of the entire work force. So people need to see through this argument that we've got to inject more choice. This has also been evidenced by some of the comments of conservative senators, people from the other place—be it as has been indicated by Senator Bragg or the other new senator from WA that's just come in—who have either described superannuation remarkably as a cancer or who have said that this type of thing, for example superannuation, is a choice.
This really goes to the agenda of conservatives when it comes to retirement incomes for working people. They're quite happy that people who are well-off have their income and financial arrangements sorted out and can look after themselves, and more than enough for them to have arrangements that protect their retirement incomes—but not for average Australians, not for working Australians.
Conservatives are perpetuating, right now, a double whammy, because what they're trying to say is that the superannuation contribution shouldn't be increased in years to come. Why? Because it will come at the expense of wages—that wages aren't growing and how can you then have an increase in superannuation? Here's the double whammy as it affects working Australians: the coalition has absolutely no policy to increase wages for working Australians. They keep saying that they will; they never deliver. Wages have flatlined for absolutely years, so they have no wages policy to lift wages now. Then, in the absence of the policy, the conservatives use that very point to justify no increase in superannuation contributions in the years ahead. So working Australians are hit now, when wages don't increase, and then they will take a hit when they retire, through either moves to make superannuation voluntary or to deny proper growth in the contributions. This is the biggest challenge in terms of the long-term prosperity of Australian workers—that is, the way that this double whammy, as I describe it, of no wage increase now, no superannuation increase in the years ahead and lower retirement incomes when working Australians finally get to put their feet up after working and slogging in workplaces across the country. They are denied prosperity.
The national system of superannuation in this country, by any measure, has been a national success. Economically speaking, when you look at our ranking—our relative strength compared to others—and you look at the national savings pool that's been put in place, we have the fourth-largest savings pool on the planet and we have a system that will provide $3 trillion for investment to strengthen the economy to allow us to support businesses, both here and overseas. There are very few countries that can say they have that. We, then, cannot only provide for a strong economy now but we can provide for retirement incomes down the track. By any measure: very successful. Yet, it seems that the biggest bug bear of those opposite is the existence of this system—(1) of superannuation and, (2) the industry super funds that bring together employer representatives, employee representatives and independents. This somehow is offensive to conservatives. I actually think, in economic terms, the biggest challenge for us, in this country in particular, is to get our heads around the idea that bringing people together actually works. In superannuation terms, the types of arrangements that exist on the board of superannuation funds where you get employers, employees and independents workers together is a good model that shouldn't just be extended from within superannuation but should be the collegiate approach we use in dealing with the big economic issues confronting the nation. We should be ensuring that that's being replicated.
Choice is being denied. The people who support that system constantly get denigration being levelled at superannuation, particularly industry superannuation. People who choose to support that are being told, 'No, you shouldn't have the choice to support that; you should choose a retail fund run by banks instead.' The statistics are compelling—that is, the returns delivered by industry super relative to retail super. No objective person would opt for a retail fund, if they saw the returns delivered. Based on those returns and based on the statistics, we get told, 'No, you need to be given more choice,' as has been extended through the rhetoric behind this bill. People should be given more choice to choose to what? Opt for a lower performing fund? That is what's been argued. Again, this is part of this broad agenda that we're seeing that would deny working Australians much more strength in their retirement incomes when they decide they've worked long enough and want to be able to, when entitled to, draw on their superannuation for retirement income. This is, as I said, the most offensive thing that we've seen. We believe, rightly, we should see this referred off to a Senate committee for further contemplation, to test some of the assumptions behind the legislation and, importantly, to test the mechanics of what the legislation would do when implemented.
More than anything else, in my contribution today, I wish to be able to send the message to working Australians that they are being denied prosperity now through a failure and absence to have a wages policy that sees serious wages growth and through the denied growth of superannuation incomes or contributions that will lead to stronger incomes in the future. This double whammy is ripping working Australians off. We have a situation for those working Australians too. I've made these types of contributions previously, so forgive me for repeating them, but some working Australians are having to hold down multiple jobs. Sure, people might hold down two jobs, but there are a number of people who hold down four jobs just to get by. The fastest growth that we're seeing is in terms of people and their jobs. I wonder about their superannuation and the strength of their post-retirement incomes when, through the bulk of their working life, they've had to hold down four jobs. This is the stuff our parliament should be contemplating.
There's the rampant growth of underemployment: people not getting the hours that they want and people not getting the income outcomes that they want to make ends meet. And then we suggest that we're going to extend superannuation choice to them somehow and that this will strengthen post-retirement incomes when the stats reveal that superannuation outcomes are better in industry super than they are in retail. This is terrible. Ultimately I am genuinely concerned about the public policy ramifications of this. If people's post-retirement incomes aren't keeping pace with what's required for retirees to make ends meet when they've decided they'll no longer work, where does government step in? You can see pressures will likely emerge on government to provide further support to self-funded retirees under a superannuation system that's not delivering to them. We can do these things now, but at some point the bill will fall due and we as a parliament will likely be required to respond to those circumstances. It'll be the result of the decisions we make on bills like this. This is not right. We should be ensuring that working Australians get a better deal. These types of bills are dressed up as choice but are really about delivering fewer choices, weaker income and fewer options for people later down the track. We should be calling out these types of bills strongly.
I definitely support the shadow minister's amendment. I wait to see, through the referral to a Senate inquiry process, what is revealed through that inquiry, because we should not be making rushed or blithe decisions that impact on the future prosperity of Australians who have contributed much to the growth and the strength of our economy through their labour. We should be doing things to support them, not deny them choice in the years ahead.