Stephen Jones (Whitlam, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

In this debate, I'll be formally moving an amendment which has been circulated in my name. I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House calls on the Government to commit to ensuring that all Australians have a decent retirement, including by committing to:

(1) no cuts to the legislated superannuation guarantee for Australian workers; and

(2) adequate funding for the aged pension".

The shorter form of that amendment invites all members of this place to affirm their support for the election commitment given by the Prime Minister. If members opposite are not inclined to support this amendment, which invites all members of this House to affirm their support for the election commitment given by the Prime Minister, then they should stand and say why not. Are they willing to affirm their commitment to the legislated 12 per cent superannuation guarantee levy?

This bill extends the range of circumstances under which former and current members who are public servants can contribute to the Public Service superannuation accumulation plan. It allows Australian workers to build their retirement nest eggs and participate more fully in our world-class superannuation system. In a sea of crazy propositions that go in the name of superannuation, this bill stands out as an atoll of sensible measures that have been put forward by the government and government members. We will support it. It's a sensible measure. It will improve the integrity and efficiency of our superannuation system, and it should enjoy the support of all members of this House—as, indeed, should my second reading amendment.

There's been an incredibly important role played by superannuation through this crisis. It has provided access on an emergency basis to much-needed funds—something that Labor fully supports. But, all too often, it appears that this has not always been the case. The early-release scheme has been incredibly poorly administered. It has been subject to fraud and abuse—something that should be subject to the full glare of an independent audit and a commissioned inquiry; I will come to that in a moment.

Our world-class superannuation system may not be celebrated by all members opposite, but it's recognised around the world as one of the best in class. The Mercer Global Pension Index, an annual assessment of the private pension systems around the world, has consistently ranked Australia's superannuation system in the top two or three. Last year, it was ranked No. 3 out of nearly 40 countries—a significant achievement.

We have the fourth largest pool of superannuation retirement savings of anywhere in the world. Australian workers' own retirement savings are equal to 140 per cent of GDP. As a proportion of GDP, this is greater than the United States, whose pension funds amount to 135 per cent of GDP; the United Kingdom, whose pension funds amount to 104.5 per cent of GDP; and Canada, whose pension funds amount to 85 per cent of GDP. It's an incredible achievement. We're the 16th-largest economy in the world, with a workforce of just 13 million people and yet we've created a pool of funds available for local investment and a stream of foreign earnings on overseas investments.

It'd be hard to overestimate the way it's transformed the Australian economy. For nearly 200 years we were a nation that borrowed money from the savings of the rest of the world. The capacity of our businesses to get a loan for investing in new plants and equipment and the capacity of the government to build infrastructure was dependent on the savings habits of other people in other countries. In a few short decades, we have changed all of this. Superannuation has made a significant contribution to converting Australia from a nation that lends to a nation that borrows. These are all benefits of the system.

I want to go back a moment to talk about why we embarked on this path in the first place. Before we commenced building a world-class system of private pension savings—superannuation, as we call it in this country—less than 30 per cent of Australians enjoyed the benefit of superannuation and less than 20 per cent of women enjoyed the benefits of a superannuation savings account. When we embarked on this journey of ensuring that all Australians could enjoy the dignity of private pension savings, the ratio of retirees to workers was one to six. That is to say that for every retiree who was dependent on a government pension there were six people in the workforce paying income taxes. When the vast majority of workers retired—that 70 per cent of the workforce—they enjoyed nothing but the government pension. Their retirement was short, because life expectancy was shorter. They had a reliance on the paucity of the government pension and their circumstances were humble indeed.

After the introduction of universal superannuation, things changed dramatically. Indeed, the landscape around us has changed as well. We now have universal provision of superannuation throughout the entire workforce. We have built a nest egg for people to rely on when they retire, but the world hasn't stayed still. You might recall that ratio that I mentioned of workers to retirees—that was, one retiree to six workers. You might be curious to know what that ratio is today. Well, I can tell you what it was 10 years ago. Ten years ago for every retiree there were five workers—that is, five people paying income tax amongst other things to support the pension payments of one retiree.

Over the last decade alone, that ratio has dropped from one retiree to five workers down to one retiree to four workers—that is, for every one retiree we have four people paying income tax. That number is not staying still; it is dropping rapidly. We are on track over the next 15 years to go from one retiree to four workers down to one retiree to three workers. Over the course of the last 25 years, we have gone from one retiree to five workers down to one retiree to four workers, and, over the next 10 to 15 years, we'll go from one retiree to four workers down to one retiree to three workers. If the experience of the last six months is any indication, that journey from one to four down to one to three will accelerate rapidly. One of the reasons we have managed to push that curve out a little bit is because of immigration. The average age of people who come to this country through the immigration scheme is generally mid-20s to mid-30s. That's enabled us to push that curve out—not stop it, but push it out.

So, when we embarked on the journey of superannuation, we did it for a reason. We did it in the knowledge that we had an unsustainability in our ageing population. Our ageing population is a great benefit; it's a great tribute to this country. It means we are living longer and healthier lives. A better diet, better health care and a better lifestyle mean we are living longer, but it also creates challenges for the budget. The answer from the mob on the other side is to make people work until they're 70 or 80. We know that's their plan because it was baked into their budgets not too long ago. Make somebody work till they're 70 or 80—that's their plan. There are many on the government side who are sowing the circumstances to ensure that is where we go into the future. The campaign that is being run by those on the other side to cancel universal superannuation flies in the face of our demographics—one retiree to six workers when we started, one to four now, and on the way to one to three.

Mr Tim Wilson interjecting—

The member for Goldstein is on the speaking list. He will have something to say, sure.

Mr Tim Wilson interjecting—

What the member for Goldstein needs to understand is that the people who say they want people to be self-reliant used to sit on that side of the House, but they don't anymore. They don't want people to be self-reliant. Their answer to the ageing population is to say: 'Put it on the tab. Let the grandkids pick up the bill, because we don't care!' Remember when they used to talk about debt and deficit? That was before they added to the government debt. It's heading towards a trillion bucks—you won't see them campaigning on that! Their answer to our ageing population is to say: 'Put it on the tab. Work till you're 70; work till you're 80. Put it on the tab. Let the grandkids pick up the bill.' That is quite literally what they are saying in response to our budgetary challenge. We say this is utter nonsense.

Those opposite imagine a world without superannuation, without the dignity and the benefits of superannuation in this country. Can you imagine what the last 12 months would have looked like if we hadn't had our superannuation system? Not one cent of the $32 billion that has been drawn down on would have existed—not one dollar—if you had listened to the member for Goldstein, because he has voted against every single dollar! I invite the member for Goldstein to tell us, when he makes his erudite contribution, how many superannuation increases he has voted for. Not one. Not one dollar. The coalition have opposed every single cent that has gone into universal superannuation through the SGL. They have the temerity to say, 'We wish this away.' Where would we have been over the last 12 months if it had not been there?

It might surprise many people in this place to know that our superannuation system has not yet fully matured. The reason it has not yet fully matured is that, when the people who are now approaching retirement started their time in the workplace, they did not have universal superannuation, or they didn't have it to anywhere near the levels that it is today. That fact is undeniable. Despite that, our superannuation system is already contributing more to retirement income than the government contributes. Do you know how much the government contributes to pension payments each year? Around about $43 billion. That is a significant amount. We don't begrudge a cent of it. We opposed this mob when they tried to cut it. It's in their plans to do so again. Superannuation lump sum payments are in excess of $40 billion a year, and allocated pensions are in excess of $40 billion a year. So, over the last 12 months, more than $80 billion was paid into national income through the superannuation system. Yet these nongs over here want to do away with it! There is a $110 billion contribution to our national income over one year alone, and every single cent of it is opposed by the member for Goldstein and his outfit. Every single cent of it! Where would our economy be if we did not have the contribution of superannuation over that 12-month period? Yet they want to smash the system. They're like blue suited Talibans—it doesn't conform with their religion, so they want to blow the whole thing up. We will fight them every step of the way.

Our superannuation system has not only provided benefits to individuals through its contributions, lump sums and retirements pensions; it has been absolutely critical to stabilising our capital markets during the heady days, particularly those first two months, when we saw the stock market swing and drop by amounts of up to 30 per cent. We have seen enormous turmoil within our capital markets. Had it not been for the long-term, steady, patient capital of our superannuation system, those fluctuations would have been even greater. It's been a critical part of recapitalising those large listed companies that have gone to the stock market in search of additional cash, and the unlisted companies. There are significant plans to reinvest in our economy to ensure we are creating investment and jobs and growth as we come out of this recession. And this mob wants to do away with superannuation. They like to pretend they understand capital. They're clueless when it comes to capital, because here we have a $3 trillion pool of domestic savings, dedicated to improving the lot of retirees, but patiently investing in wealth and jobs and capacity and industry here in this country.

We often see members of the National Party come in here and decry the fact that we've got foreigners, people from overseas, coming in and buying up our agricultural companies and buying up our agricultural land. It's actually Australian workers, through their superannuation funds, who are the foil to that. I'd expect we'd enjoy support from members of the National Party if ever that mob over there get their way and manage to convince the Prime Minister to renege on his election promise. Australian workers and Australian households investing in Australian agriculture, Australian farmland, Australian industries and Australian infrastructure are ensuring that Australians retain the wealth and benefits of those investments through their superannuation funds, which adds to our national wealth and our national productivity and to the retirement benefits of individual fund members. When described like that, who could be against it? Only a mad ideologue, somebody who is committed to destroying something either because they don't understand it or because it wasn't their idea in the first place. That's that mob over there.

Labor have built this system for all Australians, and we're committed to defending it. We invite every member of the coalition to come in here in a moment and vote in favour of the policy that they took to the last election. If they don't have the courage to vote in favour of the policy they took to the last election, they should stand up and say why. They should stand up and say why they looked the voters of their electorate in the eye and said, 'I support your superannuation,' but now they're going to renege on that promise.

Well, we can tell you this, each and every government member: we will hang it around your neck if you renege on the promise that you gave to electors in the last election. We will hang it around your neck at the next election. We will hang it around your neck. I see the member for Goldstein beckoning with his hands—that is, if the Assistant Treasurer doesn't get to him first, because, whatever differences I might have with the member for Goldstein, the Assistant Treasurer is out there saying a lot worse things about him than anything that I could ever imagine. He might get to you first, sunshine; don't you worry about that. The member for Goldstein shows a lot of courage. But maybe the Assistant Treasurer will get to him first, unless of course the Prime Minister does the right thing and puts the Assistant Treasurer towards the back bench, and maybe the member for Goldstein, the Assistant-Treasurer-in-waiting, can fulfil his ambitions by becoming the Assistant Treasurer—if his factional enemies in Victoria don't get the best of him between now and then.

Let's be clear about this. Let's be very clear about this. A cut to superannuation is a pay cut. Those opposite promised they were going to guarantee it; now they're backing away from it. We will ensure that they stick to their promise or bear the electoral price of that, because we made a solemn promise to the people of Australia that we would ensure that we protected their retirement savings and we protected their pay, and we'll do exactly that.

Mr Tim Wilson interjecting—

If those opposite want to—

Mr Tim Wilson interjecting—

I'm glad the member for Goldstein has raised this. This is a bloke who campaigned at the last election on something called a retiree tax. Nothing amounts to a retiree tax like taking an axe to the superannuation system, the retirement system for all Australians. This bloke wants to take an axe to a $1 trillion system, something that is providing dignity in retirement savings not for the pinstriped suits he stands up in here and defends but for ordinary Australians.

I met with a delegation of workers from my electorate in Canberra a few months ago and I was struck by the story of Gay. She could have been my mum. She lives in Bowral, in my electorate, and she's been a shop assistant her entire life, working for a large supermarket chain. Gay is lucky enough to own her own home, and when she retired from full-time work she used some of her $100,000 of superannuation to buy a new car—a modest car, a Kia—to replace her old run-down Subaru, which was on its last legs, and, in her words, 'This one's going to see me out. The other one was costing me heaps and heaps of money every year on repairs, but I know, with this one, it'll will see me out. It'll ensure that I can get around and see my family and ensure that I can visit friends, and get to the one shift I do each week to help me top up my pension on top of my superannuation.' One of the moving stories I've heard. Again, she could have been my mum. It was the first new car she'd ever owned. Because of Gay's super, her quality of life is much better.

Now, $100,000 in superannuation mightn't sound like a lot to people in this place. The member for Goldstein pulls in 15 per cent superannuation, like all members in this place; the person who cleans his office, 9½ per cent. After he makes a contribution in this debate he'll go back and stick his feet on his desk, feeling pretty confident that he's made a great contribution to democracy. Meanwhile, the person who cleans his office will politely knock on the door and say, 'Mr Wilson, can I empty your bins? Can I pick up those glasses? Thank you so much,' and clean his office. She or he is on 9½ per cent.

The member for Goldstein has got to explain why he wants to cut the superannuation for the person who cleans his office because that person's not worth 12 per cent but he's worth 15. Good luck with that, because we made a promise to all Australians that we'd increase their superannuation, and we're going to stick it. We take the view that it doesn't matter whether you're a corporate boss, a member of parliament, a cleaner or a shop assistant; you're entitled to a dignified retirement. It's not something that's the privilege of the rich and the wealthy. The rich and the wealthy have their superannuation savings, hundreds of thousands of dollars squirrelled away, and everyone else, penury and mendicant on the pension.

We have a very different view. We think the pension should be adequate, but people should be able to save for their retirement and ensure that they can look after themselves, their families, their kids, maybe have a holiday and buy some presents for the grandkids or maybe like Gay, buy that new car—one that'll see you through after retirement. That's the vision that we have for Australians, something that provides a dignified retirement system together with all of those other benefits, economy, in terms of jobs and in terms of domestic investment if superannuation is added to this country.

I've got to say, at a time when business investment has absolutely fallen off a cliff, it didn't start with the COVID recession; it started under this mob. They had no plan for business investment, nothing to incentivise business to invest in this country. They talk about it a lot—jeez, they do. You could have built three new capital cities in this country if they were powered by Hansardwith the amount that these guys talk about business investment. However, they were unable to shift the dial on it.

The patient capital of superannuation, investing in infrastructure, investing in capital formation and investing in listed equities are big parts of the solution to capital investment falling off a cliff in this country. And this mob who pretend to know something about capital want to pull all of that apart. Well, we'll fight them on it every step of the way. In this place and in the community, we will not make it easy. We will not make it easier for the Prime Minister to break his promise to the Australian people to guarantee their superannuation. A superannuation cut is a pay cut, and we'll be fighting for the people of Australia.

See this speech in context