Claire Clutterham (Sturt, Australian Labor Party) Share this | Hansard source

I rise to speak in support of the Treasury Laws Amendment (Supporting Choice in Superannuation and Other Measures) Bill 2025. This bill is comprised of six sections touching on a range of different reforms. Today I will speak in relation to schedules 1 and 2—two of those reforms—and how they reflect and further the objective of superannuation as set out in the Superannuation (Objective) Act 2024.

The core purpose of this bill is to implement two policy measures to support the transition to payday super. Firstly, the bill amends the Superannuation Guarantee (Administration) Act 1992 to support employers to streamline the choice of fund process during employee onboarding. These amendments are intended to provide greater flexibility for when an employer or their agent may request details of an employee's stapled superannuation fund from the commissioner so that the employer or their agent can provide those details to the employee during onboarding to inform the employee's choice of fund.

Secondly, this bill amends the Corporations Act to ban advertising of certain superannuation products to new employees as part of that onboarding process. Schedule 2 will commence on 1 July 2026. The ban under this schedule is intended to reduce the risk that employees are induced or influenced to choose a superannuation product that is not appropriate to their needs, or if it results in the opening of multiple unnecessary superannuation accounts during that onboarding process.

There are many reasons why people have multiple superannuation accounts, and frequent job changes is one of them. It's not uncommon—around four million Australians have more than one—and, of course, you can if you want to. You might want to keep multiple insurance covers, increase your variety of investment options, or, if your super is a defined benefit fund, you might want to retain that benefit. However, there are well documented disadvantages, like paying more than one set of fees, having to keep track of more balances and investments, and retaining and paying for unwanted insurance cover. Plus, you're at risk of ending up with lost super accounts.

The key drawback, though, is that having multiple super funds involves increased charges and fees. We know that most super funds charge a range of fees related to someone's superannuation account, and, if you have more than one, you're most likely paying these multiple times. Super funds will also often provide you with automatic default insurance cover like life insurance—also called death cover—as well as total and permanent disability insurance and income protection insurance if you meet certain eligibility criteria. You might also end up paying multiple premiums for cover that you might not actually need or might not be eligible to claim under.

Another drawback of multiple accounts is increased administration, including with respect to nominated beneficiaries, reading multiple annual reports and having multiple different sets of performance to track. There's also the potential for lower retirement savings, because having your super spread out across multiple accounts can make it harder to track the growth of your fund or to make good investment choices. That's on top of paying all the extra fees and insurance premiums. This can leave you at risk of lower retirement savings, and, as we know, the higher someone's retirement savings are, the better.

The highest possible accumulation of superannuation is the purpose of our world envied superannuation system. This purpose is set out in the objective of super in the Superannuation (Objective) Act 2024. It states that the objective is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way. Both the elements 'equitable' and 'sustainable' are equally important. Schedules 1 and 2 to this bill are compatible with that objective. The superannuation choice-of-fund requirement is a foundational feature of our superannuation system in Australia, and it operates to ensure that employees can choose which superannuation fund they want their superannuation contributions paid to. They should be able to do this, because the accumulation of funds in a superannuation fund belongs to the person making that choice.

The first principle of our system is simple. The employer must contribute to a fund chosen by the employee. If the employee does not make a choice, the employer can then make a request to the commissioner to determine if the employee has what is called a stapled fund. If the employee has a stapled fund, the employer will generally be required to pay superannuation contributions to that stapled fund. If there is no chosen fund or no stapled fund, the employer may contribute to a new, default fund for the employee. Typically, an employer must give a standard choice form to an employee within 28 days of commencement in order to obtain relevant superannuation fund details for that employee.

Stapling in superannuation is where an employee's existing super fund is 'stapled' or linked to them for life, following them if and when they change jobs, and operating to prevent the creation of multiple, unnecessary super accounts when changing jobs, therefore reducing account fees and protecting retirement savings. The objective of stapling is to reduce this unintended creation of new default fund accounts, where employees already have existing superannuation arrangements. This has the effect of reducing unintended duplicate fees and insurance premiums that erode member balances.

Currently, requests for stapled fund details can only be made after an employee does not make a choice of fund selection. Schedule 1 rightly amends the stapling provisions to clarify that employers can request stapled fund details before, at the time or after the employee is given a standard choice form. The effect of this is to assist employers to provide stapled fund details to the employee during the employment onboarding process to help inform their choice of fund.

Employees benefit from this. Under this reform, it will be easier for employees to see, consider and select their existing fund when starting a new job and it will reduce the potential for employees to create unintended duplicate accounts and then pay the fees and insurance premiums that erode their balance. Employers will also benefit because they will receive accurate fund details quickly, reducing the prospect of delays and mistakes. This change will, therefore, help to preserve savings to deliver income for a dignified retirement for working Australians. This is entirely consistent with the objective of superannuation as set out in the act.

Like schedule 1, schedule 2 is also compatible with the objective of superannuation as set out in the act, because it will operate to preserve savings to deliver income for that dignified retirement that all working Australians deserve. It will also ensure that onboarding service providers can continue to deliver value for employers, but in a way that is safe, equitable and sustainable for employees.

With some limited exceptions, schedule 2 operates to amend the Corporations Act to impose a ban on advertising certain superannuation products to employees during the employee onboarding process. If employee onboarding software platforms are paid to advertise superannuation products, then the policy objectives of the choice of fund and stapling provisions may be compromised. Employees sometimes forget about super funds that they have, and the advertising of superannuation products during onboarding can not only cause confusion but act to pressure employees to select the fund that might not be in their best interests or to open yet another fund that they don't need.

There is no doubt that onboarding software is a critical productivity tool for employers, but consumer harm may be the result if superannuation funds are advertised on these platforms during the onboarding process. With choice of fund and stapling provisions available, such advertising is not really necessary. This ban will protect employees from being influenced into making quick and uninformed decisions, opening inappropriate products and unintentionally creating duplicate accounts. The exceptions to this are to show employees their stapled fund and also the employer default fund.

Schedule 2 therefore is also consistent with the objective of superannuation as set out in section 5 of the act, because it helps to prevent the evaporation of fund balances, helping members to preserve savings to deliver income for a dignified retirement. Employees stand to benefit from greater savings that compound over their working lives through fewer unintended multiple accounts or through funds that are not fit for purpose or not in their best interests.

With respect to human rights, schedules 1 and 2 engage with the right to social security as set out in article 9 and article 11 of the Convention on the Elimination of all Forms of Discrimination against Women and the right to a standard of living and security under article 25 of the Universal Declaration of Human Rights. Article 9 of the International Covenant on Economic, Social and Cultural Rights recognises the right to an adequate standard of living and the right to health, and acknowledges the importance of adequate social benefits in reducing the effects of poverty. Article 11 of CEDAW recognises the right to social security, particularly in cases of retirement, unemployment, sickness, invalidity, old age and other incapacities to work as well as the right to paid leave. These human rights are prosecuted by schedule 1 and schedule 2 of this bill because they enable employers to identify the appropriate fund in which to make timely superannuation contributions for new employees.

The prohibition on advertisements in onboarding software platforms during the onboarding process protects new employees from making uninformed or inappropriate decisions around the opening of new superannuation products because of advertising. It reduces confusion and it reduces pressure on employees during the commencement of a new job, which is often an inherently stressful time in an employee's life.

The effect is that these amendments help bolster an employee's social security at the retirement stage by ensuring new employees are paid super contributions on a timely basis and into the most appropriate fund for them, avoiding any procedural delays that may arise in the onboarding process or through the influence of advertising. With respect to the right to a standard of living and security as set out in article 25 of the Universal Declaration of Human Rights, this article acknowledges that everyone has the right to a standard of living which is adequate for the health and wellbeing of them and their families and the right to security in old age, which we all hope we get to. Schedules 1 and 2 will similarly prosecute this right by streamlining the process to identify the appropriate fund in which to make superannuation contributions so new employees will receive their contributions quickly and not make disadvantageous decisions due, again, to the influence of advertising.

Schedules 1 and 2 of this bill are consistent with the objective of the superannuation system in Australia, which is a dignified retirement for working Australians. Our superannuation system is the envy of the world. Labor is the party of workers and the party of superannuation. I commend this bill to the House.

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