Stewart McArthur (Corangamite, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House of the reason that superannuation funds cannot be used to fund political promises? Is the Treasurer aware of previous proposals to raid superannuation accounts? What was the response to those plans?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Corangamite for his question. The purpose of superannuation is to build up savings during a person’s working life so that when they cease working and do not have an income they can draw down on those savings to look after themselves. In the private sector an employer puts aside money every time they pay you, and it goes into a superannuation fund and you cannot touch it until the preservation age. It can be drawn down when you need to draw down on savings.

The Commonwealth government has never put aside money to pay for superannuation for its employees. As a consequence, we currently have an unfunded liability of about $100 billion, and that is growing. A very large component of that is Australia’s defence forces. The men and women of Australia’s defence forces are, of course, entitled to superannuation, but that is unfunded. This government is building savings to ensure that those liabilities can be paid when they fall due. In doing that, we will make sure that we do not transfer the debts of today to the children of tomorrow.

This is what Liberal and National Party policy is all about: doing something for future generations, not passing on generationally transmitted debt but making sure that this generation funds its debts and passes on opportunity to young Australians, and it is young Australians that we really want to help with the removal of Labor debt and with saving for the future. If you take money from future generations to pay for your election promises, at the end of the day the election comes and the election goes and the liability is still there and unfunded. Anybody who knows anything about superannuation knows that superannuation has to be a locked box. We have no higher authority for that than the member for Lilley himself, who is on the record time after time after time demanding that the Future Fund be a locked box.

All the states are now funding superannuation to greater or lesser degrees. Apart from Mr Brian Burke, who tried to get hold of Western Australian superannuation to prop up Rothwells Bank, no state government has tried to raid its superannuation fund to date. But there have been proposals, and I came across a proposal in September 2005, where various business groups went to the Victorian government and asked it to draw down on the superannuation fund for the biotechnology industry—a very good cause, the industry of the future. Business asked the Victorian government to direct its superannuation funds into the biotech industry. In response, Treasurer John Brumby told the Age:

The premier and I are as one on this issue.

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The state will not be requiring any superannuation funds to invest in the biotech industry, full stop. ... We don’t mandate at a federal or at a state level what superannuation funds should invest in.

That is quite right—and a very good decision. I am reminded that the member for Lalor was a one-time chief of staff to Mr Brumby. Let me say this: John Brumby was right; Victoria was right. Once you start using superannuation funds for hobby horses of politicians, everybody is at risk, not just state superannuation funds, not just private sector superannuation funds, but the Commonwealth as well. The Future Fund was not built up for Labor Party election promises. It was built up for the men and women of Australia’s defence forces, and it was built up for future generations.

This Leader of the Opposition will come and he will go, but if he is remembered as the person who established the principle no other state has yet breached—that it is legitimate for political parties to raid superannuation funds for their election promises—he will have done this country a great disservice. This should never happen—and, if the coalition is elected, it will not happen. But if the Labor Party gets its way superannuation throughout Australia will be at political risk.