House debates

Wednesday, 28 February 2024


Superannuation (Objective) Bill 2023; Second Reading

7:18 pm

Photo of Brian MitchellBrian Mitchell (Lyons, Australian Labor Party) Share this | Hansard source

I do hope that, when the honourable member for Sturt is speaking to those young people in his electorate, he remembers to tell them that he has voted against Help to Buy, that he has voted against the Housing Australia Future Fund—indeed, that he's voted against all the housing measures this government is taking to get more young people—more lower and middle income people—into housing, to deal with the 10 years of failure that he and his colleagues left this country with.

God help Australia if the member for Hume was ever to become Treasurer. I had the misfortune of hearing some of the contribution from the member for Hume when he was moving his amendment. I will never get that time back. I'm getting old. The man who was perhaps Australia's worst energy minister—who never landed a cogent energy plan, who hid a wholesale energy price rise during an election—had the cheek to criticise the member the Rankin, the Treasurer in this Labor government. This is the Treasurer who inherited the rising inflation and rising interest rates from those opposite but whose work has seen those twin dragons moderate. This is the Treasurer who has delivered a surplus, something those opposite never delivered. This is the Treasurer who is putting billions of dollars of debt repayment onto a debt mountain that those opposite more than tripled over a decade. This is the Treasurer who is overseeing record employment growth, real wages rising after a decade of deliberate liberal wage suppression. And this is the Treasurer who has delivered tax cuts for every single Australian taxpayer. So we'll take no lectures from the member for Hume. It takes more than a soundbite and a Hollywood glare into the parliamentary cameras to be up to doing the job of being Treasurer of this country.

We're here tonight to talk about the importance of superannuation. It is an absolute fact that the Australian superannuation system is the envy of the world. It's a seductive argument that the member for Sturt puts forward. However, it's so full of economic holes when they talk about accessing super for your mortgage, because if you raid your super at, say, year 5 or year 10 of having super, you're not just taking the money out, you're also killing the power of compound interest for the next 20 or 30 years of your working life. When you take money out early in super, you never recover that lost money and the lost power of the compounding interest, so you will retire with much less, not a little bit less. The more money you take out at the start, the much less you retire with, and you'll never have enough to live comfortably in retirement.

Superannuation is an integral part of Australia's retirement income system, where the three pillars of compulsory superannuation, the aged pension and private savings work together to ensure that Australians have a comfortable income in retirement. Superannuation is now a $3.5 trillion system, representing the fourth largest pool of retirement savings in the world. It's a significant vehicle for economic investment and continuing economic growth. It is the envy of the world. Overseas governments look to this example about how to do it right, yet those opposite always want to dismantle it.

Labor is proud to have built superannuation and we are going to protect it. Previously the preserve of the executive classes, it was the Hawke-Keating Labor government of the early 1990s who extended the benefits of superannuation to every Australian worker, with Treasurer John Dawkins, the then member for Fremantle, announced the superannuation guarantee in 1992. Like all great reforms that Labor has sought to introduce on behalf of everyday Australians, the Liberals opposed superannuation for wage earners—the sky would fall in! Just like with Medicare and everything we do to make life better for working people, the Liberals opposed it. The Liberals were quite comfortable with wealthy Australians—the businesspeople and the highly paid top classes of the public service—enjoying the benefits of tax breaks and compounded interest, but they twitched their nostrils at the idea that it should be extended to the commoners.

The Labor government endured the usual criticism from those opposite and their noisy barrackers, but we persevered. At the time, three per cent of a worker's earnings were set aside for compulsory super, with that percentage always set to grow over time. By now, in 2024, it was meant to be at 15 per cent for all workers. It's already there for Commonwealth public sector workers but it's not there for the rest of the community. Of course, a couple of decades of Liberal government between then and now resulted in the usual go-slows, delays and excuses, which has resulted in billions of dollars less going into the retirement incomes of Australian workers over that period.

The superannuation guarantee rate will increase to 12 per cent in July 2025. Along with voluntary contributions that can be added with tax concessions, encouraging people to save more money, it will ensure that more Australians can enjoy a higher standard of living in their retirement.

We all know why superannuation was created. We talk about it all the time. It's to provide a comfortable retirement income. But, incredibly, there's nothing in the legislation that formally states this objective. Given that those opposite take every opportunity they can to raid superannuation for other purposes—and we've seen from the contributions tonight that that continues—the Albanese Labor government is determined to ensure that the objectives of superannuation are clearly articulated in law.

The 2014 Financial System Inquiry, chaired by David Murray, found:

An efficient superannuation system is critical to help Australia meet the economic and fiscal challenges of an ageing population.

It recommended that the government seek an agreement that it be enshrined in legislation. Murray said the legislation should confirm the objective of superannuation and suggested it should be:

To provide income in retirement to substitute or supplement the Age Pension.

In 2016, in response to the 2014 review, the former government introduced a Superannuation (Objective) Bill that reflected the recommendations. Incredibly—everybody here will grasp in surprise—that bill lapsed in 2019 without ever being acted upon. The Retirement Income Review of 2020 also broadly agreed with the findings of the 2014 Financial System Inquiry, agreeing there should be a policy to help ensure the purpose of the system was understood.

Legislating an objective for superannuation, a Labor commitment at the last election, will give some peace of mind to Australian workers that we will do everything we can to safeguard their savings to deliver income in retirement, and it will give confidence to the superannuation sector. The Albanese government has introduced legislation to define the objective of superannuation as being 'to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way'. The bill will answer three key questions: (1) the purpose of superannuation, to provide clarity on its role to ensure that it is used for its purpose to preserve savings and deliver income at retirement age; (2) how superannuation delivers on its purpose, how it should operate in an equitable and sustainable way to have stability and deliver upon retirement; and (3) the place of superannuation as part of the retirement income system, how super works with the age pension and personal savings, and how it remains fiscally sustainable.

The Liberals opposed the creation of compulsory superannuation. They continue to believe in the destructive idea that taxes and social investment are inherently antibusiness. One could forgive and understand this tired, fundamentalist Thatcher-Reagan ideology, except for the fact that wherever it has been implemented it has caused immense economic and social damage. We've had more than 40 years of lived experience of that ideology in the United States, and there is now a wasteland of the once great American middle class. Promises of more efficient delivery of services from private sector providers have simply never eventuated. Instead, services get cut, quality gets slashed and, when it all falls apart, the providers come running to the government for bailouts, which inevitably happen because the services are so important and essential to provide.

The Liberals attack superannuation, claiming it keeps wages lower—that, if it didn't exist, somehow all the dollars that go into super would instead be going into wages. These are seductive but destructive arguments, because those opposite have never seen a wage rise they want to support. Here they are pretending that the 12 or 15 per cent extra that goes into super would magically just be in people's pay packets if super weren't there. I can guarantee that every wage rise would have been opposed by those opposite because it's unaffordable for business or because it's the wrong time or because wage rises would be nice but not right now. They are the party of deliberate wage suppression. They spent a decade deliberately keeping wages low. It had nothing to do with superannuation.

The fact is that the Liberals' plans, if implemented, will destroy retirement incomes for millions of Australians and remove trillions of dollars from long-term investment pools. The short-term benefits of a one-off wage rise would not last long and would leave workers entirely dependent on the age pension, which as Murray found out would be completely the wrong thing to do when we have an ageing population. We don't have more taxpayers coming into the system to support an ageing population; we have more people ageing and fewer workers to support them. For the Liberals to pretend that they support higher wages when, for 10 years in government, they deliberately kept them low makes me just shake my head. Seeking to tap into Australians' anxiety, the Liberals have also said that superannuation should be used by domestic violence sufferers and by homebuyers. Of little doubt, they'd be just as—

Debate interrupted.


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