Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

Mr Speaker, my question is to the Assistant Treasurer and Minister for Financial Services and Superannuation.

Opposition Members:

Opposition members interjecting—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! I am willing to put up with the testiness, but I just indicate that I am interpreting an agreement. Perhaps I am lacking coherence for a certain business journal, but at least the member for Banks will know what I meant.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

Mr Speaker, my question is to the Assistant Treasurer and Minister for Financial Services and Superannuation. What do the government’s superannuation reforms mean for Australians and why is it important that these reforms are implemented?

Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I would like to thank the member for Banks for his question on superannuation. It will come as no surprise to members of the House that our superannuation system is the envy of the world. At $1.3 trillion it is equal to our GDP and is a source of distinct national advantage for Australia. It is the fourth largest pool of funds anywhere in the world and the fastest growing of the top five funds in the world. Having said that, I think the point about superannuation reforms is this: countries only get opportunities occasionally and we cannot afford to be complacent about them. Twenty-five years ago, a Labor government saw the opportunity and took it to create a national savings scheme that is privately run and vested in everyone’s interests. Again, there are new opportunities for this nation. When you look at the fact that a male born in 1960 had a life expectancy of 77 and now it is 84, this is a source of opportunity. The fact that the census next year will probably reveal 10,000 centenarians shows we are living longer, which means this nation needs to have adequate savings.

The good news is that in order to have adequate savings the government has put in place reforms that will meet this challenge and this opportunity. Our measures are both timely and indeed appropriate. Moving the superannuation guarantee charge from nine to 12 per cent will in fact ensure that people can retire on average weekly earnings with a greater sense of retirement security than the current system would allow. The fact that we are doubling the concessional caps for people over 50 who have superannuation fund accounts under half a million dollars will improve people’s incentives to save. The fact that we are extending the superannuation guarantee charge for 70-year-olds to 74-year-olds will allow another 33,000 people to benefit from these reforms. These are big changes and they demonstrate for 8.4 million Australians that they will have better retirement incomes than they otherwise would. There are 3½ million low-income Australians who will have more income when they retire than they otherwise would. A 30-year-old in the workforce on average wages will have an extra $108,000 courtesy of this Labor government’s reforms. An 18-year-old entering the workforce will have the opportunity to have an extra $200,000 courtesy of this government’s reforms.

But it is not just adequacy that makes these reforms important. When you look at the great terms of trade this nation is currently experiencing, we will need to have a matching growing national savings pool to help meet the investment challenges which are inevitable in the next number of years. This country cannot afford to be complacent. It is an issue upon which there is disagreement between the government and the opposition at this stage. I think that sometimes in politics there are good ideas which have to be looked at even if the opposition has initially opposed them. I have no doubt that in five and 10 years time, when some of the coalition members are still here, they will recognise that increasing the superannuation guarantee is something which the whole political process can take pride in. At some point I have no doubt that the coalition will come on board with our initiatives. All I would ask in these reforms is that they save the pain and come on board now rather than risk the irrelevance of an opposition never supporting a national savings pool and never supporting adequate retirement for millions of Australians.