House debates

Monday, 18 March 2024


Superannuation (Objective) Bill 2023; Second Reading

2:13 pm

Photo of Jerome LaxaleJerome Laxale (Bennelong, Australian Labor Party) Share this | Hansard source

The narrative of superannuation in Australia reads like a cyclical tale of progress met with resistance. At its core, the history of superannuation is a story of a visionary policy introduced by a Labor government which has, predictably, faced opposition and resistance from the Liberals since its inception. This pattern has recurred through the decades, shaping superannuation into what we have today.

The Hawke Labor government recognise the fundamental need for a system that ensures Australians can retire with dignity, a system where workers' lifelong contributions are acknowledged and preserved for their retirement years. This government acknowledges the work of past Labor governments to establish this world-leading retirement program that we are fortunate to have today. This Labor government continues to honour that work, and we recommit ourselves to the intentions of the Hawke government: that super exists to fund a dignified retirement.

A dignified retirement is something everyone has a right to. We are wealthy country, and after a lifetime of work Australians shouldn't be broke at retirement, so we need to ensure that super serves for retirement. But what we have seen from the Liberals, the original opposes of super, is that they continue to seek to undermine it. You see, they can't get rid of superannuation, so they continue to try and chip away at it.

The member for Warringah asked why this bill is necessary. This bill is necessary because we need to stop stupid ideas eroding our retirement savings, because we have seen the Liberals enact policies that risk retirement savings' long-term security and growth. We saw the Liberals, against sound advice, allow people to raid their super during the pandemic. This was a policy which encouraged people to fund their personal pandemic response with their own retirement savings. An estimated $38 billion of early withdrawals was allowed during the pandemic. It's been estimated that this will end up costing super fund members $85 billion in retirement. It will also cost every taxpayer. Modelling released very recently by the Super Members Council shows that the early release of super scheme enacted by the Morrison government will mean a higher reliance on the age pension and lower tax from superannuation, which will hit $2½ billion per year from taxpayers by the mid-2060s.

Disgustingly, this Morrison government policy hurt young people the most. It wiped out super balances and will stop young workers receiving the benefits of compounding interests right into retirement. According to the analysis, all of today's 20-year-olds are projected to pay about $3,000 more in tax to cover the high pension bill caused by the Morrison government's scheme. In an example of a 30-year-old who withdrew the maximum $20,000 from super during the pandemic, they will have $93,600 less at retirement, leaving the member dramatically worse off in their lifetime. That's one person projected to lose nearly $100,000 in retirement because of the Liberal's ideological opposition to superannuation for retirement. Bad policies on super lead to bad outcomes in retirement.

Now we see the Liberals doubling down on their continued attacks on superannuation. Despite their super for homes policy being ridiculed in the final days of the 2022 federal election, they have shockingly recommitted themselves to this policy blunder under the Leader of the Opposition. They want Australians to fund the housing crisis from their own super. They've got no interest in fixing the housing crisis through good policy; they instead want young people to use their retirement savings to fix their policy mistakes. Instead of supporting the Housing Australia Future Fund, they want people to use their retirement savings. Instead of supporting the Help to Buy scheme, they want renters to eat into their nest eggs.

With around 16 million Australians holding a superannuation account and the total value of funds under management now exceeding $3.6 trillion, it's clear that Labor's super system plays a critical role in our economy and the lives of every citizen. Everyone—bar the Liberals, seemingly—knows the system's success hinges on its protection from shortsighted policies. Proposals like those put forward by those opposite in the past and the present will hurt young workers and jeopardise their retirement. That's why we need this bill.

But don't just take my word for it. Let's delve into the history books and see what the Liberals have said about their own policy. In 2017, the current opposition leader criticised super for homes for potentially fuelling housing prices and worsening the crisis. The current shadow finance minister echoed this sentiment, warning it would likely push prices up, not down. Even the deputy opposition leader highlighted the vital need for superannuation in retirement, not as a bandaid for housing market pressures. Despite knowing all this and, in some cases, even publicly acknowledging it, they still resuscitate this old, lifeless plan with the complete understanding superannuation relies upon compounding interest and is designed to secure a comfortable retirement for workers, not to serve as a bandaid for their policy failures.

Our government understands the importance of a secure and robust superannuation system. The Grattan Institute's analysis reinforces our stance, showing that allowing early access to superannuation for home deposits would do little to improve homeownership rates, particularly for younger and less affluent Australians. For those in the 20-to-24 age group with average super balances of just over $15,000, the impact of their ability to enter the housing market would be minimal. However, the long-term consequences for their retirement savings could be severe.

This is just the latest in decades of efforts to threaten and undermine superannuation. John Howard in 1996 pledged to continue with the scheduled increase to the superannuation guarantee; however, he did not. Tony Abbott's tenure as Prime Minister saw a similar pattern of promise and retraction. Leading up to the 2013 election, the Abbott government committed to increasing the superannuation contribution, and that was also an unkept pledge.

Of course, we've mentioned the access to super during the COVID-19 pandemic. In 2019, while they opened up access to superannuation and continued to collect a 15.6 per cent superannuation rate, they were fighting internally about whether to break the Morrison government's commitment to increase superannuation of ordinary workers to 12 per cent by 2025. These episodes in history have not been just one-offs; they've not been missteps; they reveal an insight into the ideological opposition by the Liberals to superannuation for retirement. Their approach, characterised by broken promises and policy reversals, undermines the stability that is essential for effective retirement planning. It sends a message of uncertainty to workers and retirees alike, who question the reliability of superannuation as a pillar of their retirement strategy.

So, in this context, our government's commitment to protecting and strengthening superannuation becomes even more critical. This bill seeks to correct past missteps by enshrining into legislation a clear, unambiguous objective for superannuation. It's simple and it matters. The objective is that super should exist to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way. This should not be controversial, because this is, in essence, what superannuation is all about. It is a means to ensure that, after a lifetime of work, individuals can retire with dignity, supported by their savings. We are proposing to stabilise the superannuation objective by ensuring that any legislative changes are evaluated for their alignment with the core objective of superannuation, fostering transparency and accountability in policy-making.

This bill also seeks to reflect a broader understanding of superannuation's role in our economy and society. It acknowledges that superannuation is about individual savings and its collective benefit to the Australian economy. With approximately $3.6 trillion under management, superannuation is a significant source of capital, driving investments in infrastructure, innovation and sustainable development. It is an explicit declaration of our government's commitment to safeguarding the retirement future of millions of Australians. By legislating the objective of super, we are protecting individual savings and reinforcing the system's role in our national economy and society, because superannuation isn't just financial support; it's a guarantee to safeguard our future and a commitment to Australian workers and a legacy for our children and grandchildren.

The challenges and debates regarding superannuation policy are complex, but the objective should not be controversial. It should remain simple and unchanged: to provide for a dignified retirement. Those opposite have repeatedly proved that, whether it be on housing, climate change, Medicare or, of course, super, they just aren't committed to making the choices that will deliver long-term support, security and prosperity to Australians. Thankfully, we have a government that is always committed to supporting superannuation in Australia. I commend this bill to the House.


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