Wednesday, 2 June 2021
Treasury Laws Amendment (Your Future, Your Super) Bill 2021; Second Reading
Thank you very much, Mr Deputy Speaker. I appreciate your protection from the member from Mackellar, who is doing the most interrupting of this particular speech! I'll start again. I was talking about the best financial interests duty, because this seems to be the part of the bill that Labor, the Greens and the even greener independents are hung up on. This is a general principle that there should be very little argument about. Superannuation funds should work in the best financial interests of their members, of the fundholders. It's their money, after all. We keep coming back to this fundamental principle: we know that it's their money. It's the money of Australians; it's not the money of the superannuation funds and the ex-union members which many industry super funds have stacked on their boards. It's not their money to play with. The bill will strengthen enforcement of this obligation by reversing the evidential burden of proof, by creating a regulation-making power to prohibit certain types of payments or investments, by creating a regulation-making power to provide for additional obligations on trustees when making an investment which could be used to avoid their obligation to act in the best financial interests of their members and by making breaches of record-keeping obligations a strict liability offence. When you break it down, which of those could the Labor Party possibly have a problem with?
I also want to talk about the important measures contained in this bill to ensure that Australians have better transparency about whether or not their fund is underperforming. Schedule 2 to the bill will ensure members' retirement savings are protected from underperforming funds by subjecting superannuation products to a new annual performance test. Members who hold a product that fails the test will be notified. This is where it comes back to proactivity: members will be contacted when their product fails the test—that is, that it's underperforming. Products that fail the test for two consecutive years will be closed to new members, protecting members from entering persistently underperforming products. This will end the gravy train, particularly of underperforming funds who continue to underperform.
The reason funds can get away with underperforming is that they are essentially preying on the disinterest of their members. They are preying on their members by continually underperforming and by relying on the hands-off approach, the set-and-forget approach, that many of us apply to superannuation. The introduction of the annual performance test is expected to deliver some $10.7 billion in benefits for members over 10 years. As members, they'll be notified. They'll see that their fund is underperforming over multiple years and they'll be leaving those products. They'll be going to funds that are performing well and they'll be getting higher returns, more money, into their superannuation as a result.
Schedule 2 to the bill will also empower members to make decisions about who manages their savings by requiring the ATO to publish MySuper product ratings on the government's new interactive YourSuper comparison tool. The tool is expected to boost retirement savings by $3.3 billion over 10 years, again, by empowering more members to engage with their superannuation.
This side of the chamber supports superannuation, but we want members to be engaged in it. We want members to have the transparency to better look after their own retirement savings and to have a better plan for their own retirement savings. We would have hoped that there would have been a bipartisan approach to protecting older Australians—protecting all Australians—in terms of making sure that they can retire in a fashion which will enable them to keep up their lifestyle. Unfortunately, it's only this side of the chamber that is pursuing this with gusto. We will do so despite all of the objections of the Labor members opposite, who continue to play politics with the retirement funds of Australians. It may make for good theatre in this chamber for the Labor Party, but all it does is hurt hardworking Australians who are simply trying to fund their retirement, save for their retirement, and are trusting superannuation funds to look after their best interests. For most of the funds, who are looking after their best interests, these obligations will all be very straightforward. For those that are underperforming, that are preying on their members who are less active and less engaged, this will stop that. It will protect Australians.
Under this bill, your savings, your money, your super and your retirement will be more secure and will be better off. The Labor Party want to stop that. This government will deliver it.