House debates

Wednesday, 28 February 2024


Superannuation (Objective) Bill 2023; Second Reading

6:54 pm

Photo of Carina GarlandCarina Garland (Chisholm, Australian Labor Party) Share this | Hansard source

I'm really pleased to support the Superannuation (Objective) Bill 2023, enshrining an objective of superannuation into legislation. This legislation defines the objective as:

… to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.

Our government is moving to enshrine an objective of superannuation in legislation as part of our agenda to strengthen and maximise the benefits of the nation's superannuation system, a system that is a proud Labor legacy.

As the Treasurer has already indicated to the House, this simple and straightforward objective will serve as a guide for future governments, regulators, industry and the wider community. These changes will instil greater confidence in Australia's superannuation system.

With approximately 16 million Australians holding a superannuation account, and the total value of funds under management now $3.6 trillion, it represents the fourth-largest pool of retirement savings in the world. Currently 1.6 million people aged 65 or over receive income from a superannuation product. This will more than double over the next decade, as a further 2.5 million people are expected to retire with a superannuation account.

Our world-class superannuation system, introduced by a Labor government to give dignity and retirement to working people, is not surprisingly the envy of the world. The Superannuation (Objective) Bill will require members of parliament who introduced bills which propose changes to the superannuation system to provide a statement of compatibility. This statement will need to explain how the bill is compatible with the legislated objective of superannuation. It will also require makers of regulations related to superannuation publish a statement of compatibility which explains how the regulations are compatible with the legislated objective.

We know that, for the last decade, superannuation policy has, unfortunately, been costly, confused and chaotic, with the system being undermined by previous governments. Those opposite raided the superannuation system for their own purposes, with a devastating impact on the retirement savings of millions of Australians. Of particular concern are young adults in the 20 to 25 age bracket, who stand to have the equivalent of $75,000 to about $90,000 less in retirement than they otherwise would have had. And that is shameful.

Those opposite allowed for the draining of $36 billion in retirement savings across a matter of months—that money, gone. The short-sightedness of those opposite means that this will result in tens of billions of lost retirement income and earnings when we consider lost interest. These were savings that were meant to be preserved and invested so that they lasted a lifetime and provided for dignity retirement. Legislating an objective of superannuation will help prevent this sort of shortsightedness ever happening again. Subsequently, making sure the focus of superannuation is on the best interest of members, not those interested in ideological battles, is the intent of this legislation.

The objective will help ensure superannuation delivers on its foundational promise of providing a dignified retirement for more Australians. It will secure the future of superannuation by embedding its purpose into law and result in any further changes to superannuation in the future to be in accordance with the objective, not to undermine it. The requirement for ministers to produce a statement to parliament explaining how any proposed changes to superannuation are compatible with its legislated purpose form part of these important changes. Policymakers will be held to account when considering changes that affect Australians retirement savings.

It's important to highlight that this legislation also does not change the ability of members to gain early access to their superannuation on certain grounds or in cases of genuine financial hardship. There are over five million Australians at or approaching retirement age, and that is more than at any time in our nation's history. Delivering better retirement incomes has therefore never been more important. This bill is an important step towards a stronger superannuation system for a stronger economy, and it has been met with support from the superannuation industry.

Australia's retirement income system has traditionally been viewed as having three pillars: the social security means tested age pension, the compulsory superannuation contributions made under the superannuation guarantee regime and additional private savings. We also know that superannuation is a significant source of capital, contributing to the strength of our financial markets. There are also opportunities to leverage superannuation investment in areas of national economic priority where it aligns with the best financial interests of members. Having a clear, legislated objective of superannuation will help ensure these broader benefits of super can be maximised.

The superannuation guarantee was introduced in 1992. That Australia's superannuation balances are $3.6 trillion and the fourth-largest pool of retirement funds in the world is quite remarkable. Whilst at the time the legislation did not include a statement about the objective, the then Treasurer stated that:

… by the beginning of the next century, virtually all employees will be accumulating substantial superannuation savings to help fund their retirement income.

He added that this:

… will also enable future Commonwealth governments to improve the retirement conditions for those Australians who were unable to fund adequately their own retirement incomes.

This is an important point because there is in this the seen and the unseen.

When those opposite allowed superannuation accounts to be raided to the tune of $36 billion, there was a significant cost that could be seen in the medium term with respect to lower retirement savings, particularly for those aged 20 to 25. What's not seen and not as easily measured goes the statement that the Treasurer of 1992 made about the Commonwealth's ability to improve the retirement conditions for those Australians unable to adequately fund their own retirement. That's namely the poor and the vulnerable, including people living with disability as well as those coming from entrenched disadvantage. Time will show that there will be an invisible cord that directly links the decisions of those opposite with the marginalised and vulnerable who are unable to fund their retirements adequately in the years to come because of the opportunities, investment and interest lost. That invisible cord was created when those opposite chose to raid the superannuation system due to their own ideology and to their own benefit. Rather than take responsibility for being good economic managers, they abdicated responsibility and allowed the previously quarantined retirement savings of Australians to be their de facto stimulus package, a package that we are still reaping the effects of through persistent and high inflation. That's precisely why they have their fingerprints all over the cost-of-living challenges we are continuing to navigate through now.


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