Wednesday, 1 October 2014
Matters of Public Importance
I have received a letter from the honourable member for McMahon proposing that a definite matter of public importance be submitted to the House for discussion, namely:
The Government undermining the retirement savings of working Australians through its adverse changes to superannuation.
I call upon those members who approve of the proposed discussion to rise in their places.
More than the number of members required by the standing orders having risen in their places—
When it comes to the retirement incomes of Australians, we are seeing one very clear thing: the wilful sabotage of Australia's universal superannuation system by this coalition government. Each side of parliament has a legacy when it comes to superannuation. We on this side invented it, built it and protected it. The members opposite opposed it at its birth. They drag it down at every opportunity and they hold it back from growing, and there is another pattern of behaviour from members opposite: they do so by stealth.
On two occasions the Liberal and National parties have won an election with a superannuation policy. On two occasions they have replaced Labor governments with plans to take our superannuation rate to 12 per cent. They did so in 1996 and 2013. On each of those two occasions, the Liberal and National parties won those elections with a policy of continuing the work of the previous Labor government and taking superannuation to 12 per cent; and on both of those occasions they breached that promise and their faith with Australia's working people, who deserve dignity in their retirement.
We have a pattern of behaviour here because the Liberal and National parties do not understand superannuation and they certainly do not believe in it. They do not believe in the rights of Australians to live in retirement in comfort, dignity and security. They do not understand that superannuation was designed by previous Labor governments for several reasons, so that people who were saving for their own future could live their life in retirement independent of the age pension. Labor governments also saw the changes in our nation and that it was necessary to take pressure off the age pension.
We hear a lot of whingeing from the other side about the age pension. We hear a lot of whingeing from the Prime Minister and the Treasurer that the age pension is too high; that we cannot afford an age pension for Australian workers at the current level; that people should work longer; and that Australians should work longer than anybody else in the world before they get the age pension. But what they do not understand is that superannuation was designed to take pressure off the age pension, and our superannuation system is already saving $7 billion a year in age pension costs.
The Treasurer says to the Australian people—whether they are police men and women, soldiers, carpenters, bricklayers, nurses, people in difficult manual or physical jobs, or in jobs that are demanding psychologically: 'You must work until you're 70. You must work longer than any other people in any other country in the world.' But he also says: 'We will make it harder for you to save your retirement.'
The Treasurer can be a tricky character and he has worked out that parliament will not have a bar of his plan to make Australians work until they are 70; that his plans to make Australians work until they are 70 will be blocked in the other place. So he has come up with a different way of doing it. He has made it harder for Australians to save for their retirement through their superannuation system. He has said there will be a freeze on superannuation contributions. He has said that those Australians on a low income will receive zero tax incentive to save for superannuation, by abolishing the low-income superannuation contribution. What does this mean for Australians and when they can retire? We already know that a 25-year-old, as a result of decisions taken by this Treasurer and this government, will lose $100,000 in retirement income over their working life. And we know more now: we know the analysis has been done and, to make up for that shortfall, someone who is 25 today and on an average salary of $70,000 a year will have to work 3.2 years longer to make up for the income they lose as a result of this government's changes.
But it gets worse, because some people are affected more. Take an older worker—someone who might be 35 compared to the 25-year-old I mentioned before—who might be part-time. They are probably a single parent, struggling with their work/life balance, bringing up a child or children by themselves, working hard, doing the best by their children but also wanting to save for their retirement and their future. Well, that person will have to work 4.7 years longer—to spend almost five years longer in the workforce—just to have the retirement incomes that they would have had under the previous Labor government's policies. These are people working hard. Nobody should ever dare call them leaners. Nobody should have the contempt to walk into this House and call these people leaners. They are workers doing their best for their families, trying to save for their own future—not to be reliant on the age pension. And this arrogant Treasure dares categorise them as leaners. And worse, he dares make it harder for them to save for their own retirement, to do the right thing for themselves and their families. No wonder this Treasurer is seen as the most arrogant and contemptuous this nation has had.
We know that this government does not understand superannuation, but we know that there are plenty of people out there who do, and they are the experts in the field. We know the Australian people understand superannuation and support it. We know the Prime Minister does not understand it. He stood on the opposition backbench and called it a 'con job' when Prime Minister Keating was introducing it. He wrote in his book about superannuation and showed he clearly did not understand it. But other people understand it. The CEO of the Association of Superannuation Funds of Australia, Pauline Vamos, said:
… we are greatly concerned that the changes to the timetable for SG increases will leave many Australians much worse off in retirement.
The reality is, at the present SG rate of 9.5 per cent, most people will not build up enough super to provide them with adequate financial security when they finish working.
The CEO of the Industry Super Association said of the government's measures in the dirty deal with the Palmer United Party, freezing the superannuation guarantee:
It’s an incredibly short-sighted decision.
Then we had the Chief Executive Officer of the Financial Services Council, John Brogden. He said this: 'The seven-year freeze means that working Australians will have $128 billion less in their superannuation savings by 2025.'
We are concerned it could exacerbate the nation’s low savings rate and that costs will be passed on to future generations.
And then we had Liz Westover, the head of superannuation at the Chartered Accountants. She said this:
We are even further away from a fully mature super system in which Australians can truly be confident.
But we have had a very worthwhile contribution today from one of Australia's leading business people—somebody who, on this side, we have respect for. He has a different perspective, a different job to do, but we have a lot of respect for Craig Meller, the chief executive of the AMP—one of Australia's largest funds management businesses. This is what he said about this government's policies today:
We need to take action now to counter what is the most predictable threat to our prosperity over the next 20 to 30 years.
And he is right, because this is a threat to our prosperity. He said:
I think the challenge we’ve got as a country is that it is always very easy to put off until tomorrow the savings that we need to do.
And he has condemned this government's policies. He has condemned the freeze in superannuation. He knows the impact that it has on his members at AMP. He knows the impact it has on Australians going about their working lives, saving for their future. He knows the impact it has on the Australian economy. He runs one of Australia's largest businesses. He runs a business which has as its very reason for existence the retirement incomes of Australians, improving their lives so that they can live their retirement in dignity and in some degree of comfort—not luxury. We are not talking about luxury; we are talking about dignity, and some degree of comfort in retirement.
Everybody in this House will get to retire with an income which provides them with that dignity—every single member will do so. Why shouldn't Australians who are not in this House have the same right to retire in dignity and comfort? Why shouldn't Australians have the ability to live not reliant on a full age pension but on their own savings, supported through the taxation system. Every high-income Australian gets that right. Many middle-income Australians get that right. And this government is denying that right to low-income earners. It says all about the values of this government; it says all about its priorities—this government which says to low-income female workers across this country in hard manual labour that they will get no support. Well, they will get support as far as this side of the House is concerned, because we will defend and protect superannuation.
It has now been more than 12 months since the Australian people voted the Australian Labor Party into opposition—7 September 2013. Remember that date? You should. I would have thought that, after six years of chaos, they probably needed a bit of a breather. Certainly, the Australian people thought that. I would have thought they needed to put their feet up, Labor members, with a cup of tea and maybe an Iced VoVo, to review the soap opera that was the Rudd-Gillard-Rudd administration. Certainly, I would have thought that the jumped-up member for McMahon—a failed Treasurer, a failed immigration minister—could have spent some time in some much-needed soul-searching.
At some point in the past 12 months you would have thought that Labor could have found the time—just a little bit of time—to formulate some policies and to come up with some alternative ideas. Just about everything about Labor in opposition is either a vain attempt to rewrite the narrative of their time in government or an attempt to distract themselves from the smashing defeat they copped at the last election. They will not let the nation move forward because they cannot move on from their own crushing electoral defeat. They cannot move on from the poisonous in-fighting that was at the heart of their demise. After 12 months, all they can muster—
Well, the Australian public could wish, too, member for Gorton, because, certainly, all they ever cop from that side is endless confected outrage. The repeal of the mining tax is a case in point. It is true that we had to make some compromises, including a delay in planned increases in the rate of the superannuation guarantee. But we would not have had to do it if Labor had respected the clear mandate we were given at the last election to abolish the mining tax. We were always up-front about the need to abolish the low-income superannuation contribution scheme. We were very clear with the Australian people that Labor's failed mining tax did not raise anywhere near the revenue needed to pay for it. Even with the compromises that needed to be made, the repeal of the mining tax and associate measures will still improve the budget bottom line by around $10 billion over the current forward estimates.
Now, if Labor really cared about working Australians they would not have left a legacy of debt and deficit, because leaving a country with a surplus provides jobs. Labor goes on about being the party of the workers, but how many people lost their jobs because of Labor's failed policies? We had a timely reminder of the debt and deficit legacy just last week with the release of the final budget outcome for 2013-14. Labor initially forecast a surplus of $5.4 billion for 2013, but we now know that the result for the year came in at a deficit of $48½ billion. That is a $53.9 billion difference. That is pretty close by Labor's standards—'missed it by that much'! Just that much!
We are taking decisive action to address serious unresolved issues left to us by Labor. We have restored the health of the Reserve Bank's capital buffer, cleared the ridiculous backlog of unenacted tax measures and addressed a funding shortfall for the processing of unauthorised maritime arrivals. We are putting spending on a sustainable path and repairing the budget at a time when a weakening economy is continuing to put pressure on tax receipts. We are growing the economy with record investment in productive infrastructure which will create jobs. If Labor really cared about working Australians—really, genuinely cared—they would get on board with our efforts to re-energise enterprise in this country, in this nation—particularly in regional Australia, where our food, fibre and mining wealth are derived.
Today, the Deputy Prime Minister launched round 1 of our $1 billion National Stronger Regions Fund. We heard in question time a list of just how much that is going to make a difference to regional areas and regional jobs. This is a fund which will deliver real money—not like the phoney money that Labor comes up with—to fix real problems in local communities, creating the right conditions to create real jobs. The fund will invest in important infrastructure projects nominated by local communities, ensuring that Australia's regions are investing in their own futures. Projects funded will have a focus on strengthening economies in Australia's most disadvantaged regions by improving their productivity, economic opportunity, employment and workforce skills. That is exactly what we need.
The National Stronger Regions Fund will complement a reinvigorated Roads to Recovery program, and I know how much that has meant to the Riverina electorate. It was just announced yesterday. As the Deputy Prime Minister announced yesterday, we are making good on our commitment to double Roads to Recovery funding next year to $700 million. This will greatly assist local councils in being able to meet local construction and repair needs.
Today, we also took a significant step towards a Western Sydney airport at Badgerys Creek, with the Deputy Prime Minister commencing discussions with the Sydney Airport Group. We are getting on with the job of fixing the nation. He is a busy bloke, the Deputy Prime Minister, and the fine work that he and other Nationals in government are doing makes a mockery of the claims made by those opposite that the Nationals are not sticking up for rural and regional Australia—the Nationals, and some excellent regional Liberals too, I might add. We are going to hear soon from the member for Corangamite, an outstanding representative for her electorate. Earlier today she dared other members to sign up to her petition to secure the future of the East West Link. I hope she mentions it again so that the relevant members opposite—that is, if any of them bother to turn up—have a chance to reconsider.
We are also going to hear from the member for Eden-Monaro, another great local member who understands business.
He understands business. I am really looking forward to joining him next week to talk tourism with local businesses in Pambula.
And we are going to hear from my good friend the member for Page. It was great to be with him in Lismore a couple of weeks ago, meeting with local businesses and talking about how to bring greater prosperity to Northern New South Wales. And we are going to hear from the member for Banks, another fine member—
You will not be here either, the way you are going. He is another fine member with a strong background in business. He is getting on with the job of advocating for his constituents in south-western Sydney.
It is passionate local members such as these who understand—they actually get it—the needs of local business both big and small. Do you know what the definition of a medium-sized business is? It is a business which was a big business before Labor came into power! Do you know what the definition of a small business is? It was a medium-sized business when Labor came into power. But we are getting on with the job of getting those businesses back, firing. We are getting on with the job of producing real jobs with real money; to ensure that the National Stronger Regions Fund, that Roads to Recovery and that good local representation is going to put them back on track to make money. And by making money they will be paying more taxes. By them paying more taxes we will be able to help repay the debt and deficit that Labor left us.
If Labor really cared about working Australians they would not have voted in the Senate yesterday to waste thousands of taxpayer dollars. Apparently, there are not enough issues to be dealt with in the Commonwealth sphere; the Palmer United Party and Labor think we need to go into the affairs of Queensland as well. How disgraceful! Let's be clear: we are only talking about the Queensland Liberal-National Party government, not the previous Queensland Labor administration. Oh no! No! We would not want to shine a light too brightly on Labor's record of failing to deliver for Queensland. No—we would not want to do that. I do not think the people of Queensland have forgotten that, and they will be only too happy to remind them at next year's Queensland state election. I tell you what—that is when the Queensland voters will have their say and they will not forget the years of Anna Bligh and the years of Labor misadministration.
This committee will deliver money into the pockets of the committee chair, but I am not all that clear on what it does for Australian taxpayers. It is certainly not good value for money.
Kevin Rudd, the former member for Griffith—
Yes—who? You have forgotten him already! I know it is forgettable! It is certainly forgettable, member for Oxley! But he summed up his party's outlook when he said in his maiden speech that politics is all about power. That is what he said in his maiden speech to this House, that politics is all about power.
Well, politics is not all about power. Politics is about people. It is about the people of Australia, and the people of Australia have elected the coalition—2013, 7 September, if you have forgotten— because we understand that the business of this place is to make a better future for all of us. That is what we were elected to do. We are getting on with the job of doing it, and those opposite would be well advised—absolutely well advised—to look at the national interest if they want to avoid being on the wrong side of history.
I will just finish with this, a line from the Treasurer—and a good Treasurer he is, too. In a 25 July media release last year he said:
Labor does not practice what they preach. All Labor does is use the superannuation system as their own personal ATM.
No, I am not kidding:
They simply can't be trusted.
Families across Australia can be sure that they will be better off under a Coalition Government. This is because the Coalition will not treat Australians families and small businesses with contempt by saying one thing and doing another.
That is exactly what Labor did. For six years they said one thing and they did another. They treated the Australian public and the Australian taxpayers' purse with absolute contempt. That is why on 7 September last year they were booted out of office, as they should have been. And the Australian people voted the sensible people into the House. That is us, and we are getting on with the job of creating real jobs with real money.
If you ever needed more evidence that this is a government completely confused not only about its role in government but also about superannuation, we just had it all. Ten minutes of all sorts of speeches smashed together, not once talking about superannuation—one of the most important issues that faces the Australian people—for an ageing population, budgets or the economy. It is one of the most important matters that face us as an economy, but they did not mention it once.
I, on the other hand, am very proud to talk about our history on superannuation. Not only have Labor created super for ordinary working Australians and making sure that we add to the national savings pool in our country but we have also created a super that underpinned our ability to sustain during the global financial crisis, with a country of just 24 million people, the No. 4 spot for the country with largest funds under management in the world. We have a national savings pool of around $1.84 trillion—I will repeat that: trillions dollars—because 20-plus years ago it was Labor who structured and put forward one of the most important economic policy decisions that this country would ever make. That was called Superannuation Guarantee.
It is on the public record, and in Hansard, that it was the Liberals, and Tony Abbott then in opposition, who opposed superannuation every step of the way. This is a government that continues to oppose it. Only just recently, on 25 September 1995—recent enough—Tony Abbott said this:
Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.
How wrong he was then and how wrong he is today. How could he ever have had those views? It is clear that there is just purely an ideological hatred against superannuation.
You would have to ponder the thought of what that means and how that has come about. Why would the Liberal Party and the National Party—it is very, very odd: why would there be this ideological, pathological almost, hatred of superannuation? What it does for our country and what it does for ordinary working Australians is just give them an opportunity to have some independence in retirement, have a decent retirement. Not a wealthy retirement—
Absolutely dignity! There is still not enough there, and this is really what is before us here today. Even though we have had a bit over 20 years of Superannuation Guarantee and workers' retirement savings building to a reasonable but very modest position, it is still not enough. That is why, when we were in government, we moved to have superannuation raised from nine per cent to 12 per cent. How can anyone argue against that?
We heard the shadow Treasurer talking about Craig Meller from AMP before, talking about the importance this has not only for working men and women but also for the national economy, for the budget. When will this government acknowledge the fact that by virtue of Labor's Superannuation Guarantee policies over the past 20 years the budget saves $7 billion every single year? Seven billion dollars less expended on the budget, on the taxpayer, because we have Superannuation Guarantee and more people saving for their retirement. This should be something that is celebrated.
It should be completely bipartisan, celebrated by every single person.
But there is one thing I do understand really, really clearly, as do the Australian people and as do Labor—that is, while the Liberal Party and the National Party have an ideological hatred of Superannuation Guarantee, they know they tread a very fine line because they know the Australian people do not agree with them, do not side with them. The Australian people actually understand that they need to save for their retirement. So when we hear the government, the Liberal Party and the National Party, talking about tearing down superannuation, getting rid of the low-income superannuation contribution—one of the smallest but most significant steps to help ordinary working Australians who earn less than $37,000 a year to save for their retirements—you have to ask the question: why would this government be opposed to that? What is it about the Liberal Party, in government and in opposition, that is so pathologically opposed to ordinary working people—
Mr O'Dowd interjecting—
Including people in business, including people in small business, because they save for their retirement too. A lot of them do it through retail funds and industry funds and they do it through their fund managers; they are the beneficiaries of Labor's policies as well. But it is this government, the Liberal-National parties government, that will tear this down. The evidence is clear. It is clear to all Australians; when will it become clear to the government?
Rarely have we seen such a clear-cut example of why we are over here and those opposite are over there. This is yet another example of Labor's reflective solution to every single issue—that is, spend more money. It does not matter what it is; whatever the topic is, spend more money. They believe that is the solution. You want to create a political distraction? Spend more money. You want to avoid the real issues? Spend more money. You want a cheap headline? Spend more money. Absolutely anything, they will want to spend more money.
The Australian people know that governing is a serious business and that simply saying, 'We're going to spend more; we're going to do more and spend more on absolutely everything,' is not sustainable. Frankly, it is a childish approach that leads to terrible problems. We have seen that no more clearly than in relation to the mining taxes. We do have to back up a little bit; we do need to talk, unfortunate though it is, about the mining tax because the situation we face in superannuation is so closely linked to that. That party over there is the party that said the mining tax would create $12 billion of revenue in the first two years.
Not very close, Member for Deakin. They were just out by 98 per cent.
Government members interjecting—
No, come on; let us be reasonable. It was only 98 per cent. They are working through their calculations and hopefully they will do better in the future. But the funny thing is there are still some forecasts out there in relation to what the mining tax would have done—they are more sensible forecasts now because they are not by Labor—and they say that the mining tax would generate about $660 million over the forward estimates. But what Labor had, and still clings to, was a desire to spend $17 billion against $660 million of revenue.
That is a problem as well, member for Deakin, because that involves a net deterioration in the budget over that period of over $16 billion, and $600 million is about four per cent of $17 billion. So it is slightly better than the two per cent but still very bad. It is the right direction but still out by 96 per cent. As a consequence, the government needs to make sensible adjustments because we are not just going to sleep walk into the future, pretending the budget situation is okay, pretending that two-thirds of a trillion dollars of debt in 10 years—which is the trajectory we are on—is okay. We are not going to pretend that is okay because it is not. We need to make some sensible adjustments and deferral of the superannuation guarantee increase is one of them.
You do wonder about the previous government. The member for McMahon was in here earlier, very excited and speaking passionately. He was here when the member for Lilley introduced the mining tax. Why did he not take him aside and say, 'We need to go through the numbers in a sensible way before we commit to tens of billions in spending'? Why did he not make sure that there was some reality? He did not do that. It is unfortunate because the member for Lilley was not the Treasurer for the under-7 sausage sizzle; he was the Treasurer for the entire nation and that is just not an acceptable standard.
The key point on the superannuation guarantee deferral is that, as many people have noted, when superannuation guarantee goes up, that comes out of wages. Obviously, businesses cannot just invent money, much as the opposition probably think they can. Business cannot say, 'Okay, we'll just find an extra three per cent.' That is not the sort of thing that happens in the real world. Consequently, there is a negative impact on short-term wages. So there is no question that, if the guarantee goes up more quickly, wages come down. So deferring it by three years—a sensible budget saving—makes no difference to the total compensation paid to an employer but it means they get more of it up front than they otherwise would have. So this is a very sensible response to some appalling public policy by those opposite. Let us just be thankful that the government has changed since these initiatives were put in place. (Time expired)
I am really pleased to be speaking on this matter of public importance today because I want to talk about women and the low-income superannuation contribution. I note that neither speaker opposite mentioned women. This measure will have a disproportionately higher impact on women. Approximately 3.6 million people will be affected by these changes and two-thirds of those will be women—that is, over two million low-income women set to retire with less in their savings. Overall the impact will probably affect the retirement savings of one in two women. Yet again this government shows its true colours when it comes to equal opportunity. We have seen it before—only one woman in cabinet, a lone female voice in the cabinet room. I suspect, due to overseas commitments, that lone female voice is often absent from cabinet meetings. What does that leave us with? It leaves us with wall-to-wall men making decisions ignorant of or worse knowingly hurting the lives of women.
I give you my heartfelt thanks. Oh! Feigned outrage! I am glad that you are in the chamber today. I will tell you what: I am so pleased you are in the chamber today but I am tired of you knocking on that cabinet door. Why don't you walk through it? Why don't you get into that cabinet and speak to them about low-income superannuation and what it will mean to women's earnings at the end of their working life and what it will mean to the dignity of their retirement? Women who earn $37,000 a year in this country are being hit triplefold by this government but it is okay as long as those on high incomes do not take the cuts, no. The cuts by this government are hitting low-income women. I am really pleased to see some women in here with me. There was no modelling done on the budget's impact on women because this government does not care about women.
An opposition member interjecting—
That is the other problem—as I hear behind me. Perhaps they do know but they do not care. That is how it feels on this side, when measure after measure dished up by this government in 12 months has hurt women.
So we are going to talk about paid parental leave—12 months and we have not seen legislation on the floor of this chamber about a PPL and why would we want to see legislation about that PPL? We have a perfectly good PPL scheme already and that one is a rolled gold one for millionaires, as we have pointed out several times.
The small benefit in the low-income superannuation contribution was designed to support low-income women, many of whom juggle family commitments and their careers with flexible, often part-time working arrangements. It was one form of tax break for which they were eligible. It was a small measure that went some way to support women who retire currently on approximately 40 per cent less than men. Given women live longer, this is an important measure that Labor was proud to support. It was a modest support measure for those earning less than $37,000 a year. It was a maximum contribution of $500 per annum. What a lousy deal this government struck with the Palmer United Party.
High-income earners often find ways to ensure their superannuation can be concessional by salary sacrificing, for example, option low-income workers rarely have the ability to access. So layer upon layer, we see what this government thinks about low-income earners and about women. Not only are they removing the low-income superannuation contribution but they are delaying general superannuation increases until 2025.
Under Labor, superannuation was projected to increase each year until it reached 12 per cent in 2019. It was a good plan. The coalition government first announced a delay to postpone increases until 2021, then a further announcement saw a delay until 2022— (Time expired)
This is the second debate on superannuation, aged care and related issues that I have been involved in in the last month. Labor raised this issue a few weeks ago and, interestingly, only two people were sitting on that side of the chamber after we got past the first speaker. That actually shows you the extent to which they are interested in this matter of public importance.
The way I started my speech last time is quite relevant to how I start it this time. Where is the money coming from, Mr Shorten? Where would the money come from to pay for all these policies you are carping about—
I am very happy to, Mr Deputy Speaker, because it gives me an opportunity to basically say the same thing. Where is the money coming from, Leader of the Opposition?
I would like to note that there are two myths coming from the opposition benches on this issue. The first myth—and you heard it from the member for McMahon, who is leading this debate from the opposition side—is that Labor invented superannuation. Labor should realise that superannuation started in this country in 1860. It was not invented by the Labor Party just the other day, by Paul Keating. The second part of this is that superannuation is about a savings policy and savings in this country. There are two parts to savings in this country: there are public savings and private savings. Superannuation is part of the private savings in this country.
The second great myth is that Labor care about savings. They obviously do not care about public savings; they just spend money. The fact is that, in the last six years, the legacy that was left by the Howard government—a brilliant legacy in terms of having the budget in order—has been completely squandered. The sum of $123 billion was run up. You ran up forward estimate spending policies that would lead to an eventual debt in 10 years time of $667 billion.
A government member: Shame!
That is an absolute shame. It means that, at the moment, the federal government is borrowing money to pay $1 billion a month in interest bills. That money we are borrowing is coming from overseas so that we can pay the interest bill, 70 per cent of which goes back overseas. That is what Labor think about savings. They have no concept of savings across the whole of the national economy, because what does that debt mean? That debt, $667 billion within 10 years, amounts to $25,000 per man, woman and child in this country.
The other hypocrisy about the proposals being debated today is that Labor care about super. Let me tell you: in the lead-up to the 2007 election, Labor said they would not change super. In fact, Kevin Rudd, as the then Leader of the Opposition, explicitly stated in the 2007 election that Labor would not change superannuation laws, 'not one jot, not one tittle'. And what did he actually do? I will tell you what he did: in the six years that Labor were in office, they cut almost $9 billion out of super benefits and some $3.3 billion from super benefits for lower income earners in this country. That is your record. You come here with great hypocrisy—
Mr Brendan O'Connor interjecting—
So $9 billion in cuts to superannuation in six years! That is what these guys did. What did they actually do? Well, there were a whole series of things: they increased taxes on voluntary savings by lowering concessional contribution caps, they reduced the government's superannuation co-contributions— (Time expired)
The member for Eden-Monaro said that the Labor Party did not invent superannuation. That is true; superannuation for rich people has been around for a very long time but, by crikey, what we did do was spread superannuation to ordinary Australians. Ordinary people can now find, through the superannuation guarantee, over $1 trillion which was not there before we set up the superannuation guarantee and never would have been there if those opposite had their way. They have sought to undermine the superannuation guarantee at every turn and even now I hear the right-wing economists, from whom they take their cue, deriding superannuation by saying that this is forced saving and that people ought to be free to spend their money however they please. The fact is that those opposite do not give a damn about the future; they feign concern about the future. They cry crocodile tears over things like the budget deficit, which they have been adding to, and population ageing. But they do so merely to serve a big-end-of-town agenda. When it comes to issues which really affect future generations like superannuation and climate change, they sit on their hands and they white-ant and undermine real action.
In my electorate of Wills, over 26,000 workers will be adversely affected by the plan to reimpose a 15 per cent superannuation tax on low-income and part-time workers, with shop assistants, waiters, bartenders and cleaners being the hardest hit. This superannuation tax plan will slash the retirement savings of these 26,000 low-income workers in my area, the majority of whom are women.
The member for Lalor pointed out in her contribution that some 2.1 million or 60 per cent of those low-income earners are women and women are already retiring with less in their super accounts because of the disparity in their pay compared to men. Women also take time out of the workforce to have children and so they are impacted by lower superannuation savings. The policy that we are debating this afternoon would mean that over 40,000 women in my electorate would have less super in their retirement.
Around a third of hospitality and childcare workers and around a quarter of the electricians in the Wills electorate will suffer from this government policy. Some 57 per cent of all food preparation assistants and 53 per cent of all checkout operators would be worse off. This is an attack on some of the poorest people in the Wills electorate whose retirement savings are modest at best. We should be doing all that we can to boost those savings. The key point here is that the Treasurer cannot argue on the one hand for the need to make the age pension more sustainable by restricting its eligibility and cutting its amount and then on the other hand cut the very means by which workers could achieve less dependence on the pension. As was reported in TheGuardian on 30 September there are six in 10 Australians drawing the full age pension and eight in 10 receiving some form of pension support. So why does the government want to cut superannuation, which is the sustainable and responsible avenue to lessen the load on taxpayers for retirees?
The Liberal government is undermining the retirement savings of working Australians both through the delay in the introduction of the increase in the superannuation guarantee from nine per cent to 12 per cent by seven years and by removing the low-income superannuation contribution. The increases in the superannuation guarantee were due to come in from the current level to 12 per cent by 2019-20. The Liberal government first said it was stopping them in their tracks until at least 2021. Then in the budget they announced the 12 per cent would not be reached until 2022. Now they have announced a third delay meaning the full 12 per cent will not be reached until 2025. At this rate, we will never get an increase to the superannuation guarantee.
We also have issues to do with the low-income superannuation contribution. This was something being done for low-income earners. Together with the halt to the superannuation guarantee, the estimated combined negative impact on national savings by 2025 will be $150 billion. This sells out the future. There is one side of politics concerned about superannuation and it is the Labor side of politics. (Time expired)
I welcome the opportunity to talk about boosting the savings of Australian workers because that is one of the principle reasons why members opposite are sitting on that side of the House. Members opposite have squandered all the savings of all Australians. The way we were going under your previous government when you were in power was heading towards $25,000 in debt for every man, woman and child, skyrocketing towards $667 billion of debt. You have squandered the national savings and that is why members opposite are sitting where they are.
Thank you, Mr Deputy Speaker. I want to reflect particularly on the member for Oxley's contribution today. He made some comments. I come from a background as a journalist where the facts are important when telling the story. We have seen an appalling display of dishonesty in this debate, talking about the coalition being pathologically opposed to superannuation. I want to put on record the comments of the Prime Minister just a few weeks ago when he said that compulsory superannuation is an important part of our overall social safety net. It is an important part of our retirement income policy. That is why compulsory superannuation will rise to 12 per cent by 2025.
On that note, I also want to put on the record the contribution in recent times of the Leader of the Opposition, who, I note, is not contributing to this debate today because essentially he has taken the view that proposed increases in the superannuation guarantee are funded from reductions in take-home wages and business profits. He has made that clear, absolutely. It is startling. Perhaps the member for McMahon is in some way undermining the Leader of the Opposition in bringing on this debate. It is very clear, as the opposition leader said in 2012, every superannuation increase comes out of workers' wages. We are concerned about all workers and we are concerned about building the future of all workers. Again, for the record:
Analysis suggests that, over time, superannuation guarantee increases have come out of wages, ....
That is not something we have heard from the members opposite in this debate.
But I also want reflect on the member for Lalor's contribution. I was quite stunned by some of the comments she made in relation to working women. One of the most startling differences between our policy and the policy of those opposite is paid parental leave. What an appalling situation it is that superannuation has been excluded for women on paid parental leave. That is a very poor reflection on members opposite's commitment to women and saving for women's retirement.
I had a conversation the other day with a woman who worked for Centrelink in Geelong. She said to me, 'Do you know the change made by the previous government that caused more alarm and distress than any other change was moving 60,000 single mothers, primarily mothers, onto Newstart. It was the chaotic way in which members opposite ran the government when they were in power. So we are concerned about building the futures of all Australians.
The member for Gellibrand, if you were concerned about building the future for all Australians, you would back my petition. You would back the East West Link. The East West Link will deliver 6,200 jobs. It is so important for Geelong, so important for Western Melbourne. The member for Gellibrand, the member for Lalor, the Leader of the Opposition, the member for Corio and the member for Ballarat are letting down their constituents extremely badly because they are standing in the way of one of the most important infrastructure projects in Victoria's history, and more than 6,000 jobs. Imagine what that would do for manufacturing workers in the member for Gellibrand's electorate and in the member for Lalor's electorate and in my electorate of Corangamite. So get out of the way and support the policies that grow jobs.
I rise to speak on the Prime Minister's cradle-to-the-grave approach to increasing inequality in Australian society. Instead of expanding opportunity for Australians at every stage of their lives, the Abbott government seems to be determined to take these opportunities away—from babies born in public hospitals in my electorate, forced to struggle as the government rips out more than $50 billion of hospital funding in this year's budget to the children studying in our schools, deprived of Gonski funding intended to ensure all children have access to a quality education; to the students in our universities, where the Prime Minister's higher education reforms will price many bright students from disadvantaged families out of the dream of a university education; to our pensioners who are seeing their age pensions cut; and, finally, to our self-funded retirees, whose retirement savings are now under attack from the Abbott government.
Under a dodgy deal signed with the Prime Minister's coalition partner, Clive Palmer—a noted everyman—the government has worked to make saving for retirement harder for everyday Australians. With the repeal of the mining tax came the repeal of the low-income superannuation contribution and a freeze on the lifting of the superannuation guarantee from nine to 12 per cent. Both of these measures were crucial to Australia's future not only in amassing a wealth of savings that could be invested in the economy over the long term but also in ensuring that all Australians would be able to live the retirement they deserved after a lifetime of work.
The low-income superannuation contribution was mostly targeted at remedying the inequalities that currently exist within our superannuation system. It allowed for a contribution of up to $500 towards the superannuation savings of those workers earning $37,000 per annum or less. It was crucial support for the members of our society least likely to have a strong personal superannuation balance when entering retirement.
In particular, the low-income superannuation contribution—as outlined by the member for Lalor in great detail—addressed the superannuation gap that currently exists between men and women. Over two thirds of those receiving the low-income superannuation contribution were women, and Industry Super Australia called the LISC:
… the single most important policy setting in the super system which helps to address the inequity in savings gap whereby women are currently retiring with about 40% less than men …
Those opposite can talk about PPL all they want but it will not address this gap.
I am sure the Minister for Women fought this measure hard in the cabinet room before rolling over and letting it through, but the Prime Minister, the Minister for Women and his Coalition partner, Clive Palmer, are not content with making it harder for our most disadvantaged women to save for their retirement. By freezing the increase in the superannuation guarantee, they have ensured that workers will have fewer savings when they retire. And, once again, this freeze will adversely affect those who had fewer retirement savings to begin with, in particular our youngest workers.
Modelling from Industry Super Australia suggests that, while a worker aged 50 earning $80,000 will lose $15,310 from their super, a worker aged 30 will lose double that amount, or over $31,000; if you are a worker aged 50 earning $175,000 or more, these changes will see you lose around $33,000 from your retirement savings; but our 30-year-old workers on $50,000 a year will lose around $20,000—more than half that amount from a far smaller pool of earnings to begin with.
But the true evidence of the Abbott government's commitment to inequality isn't in making the lives of our low-income workers even harder; no, it is in its efforts to make the lives of our high-income workers even easier. The Abbott government has complemented the inequality introduced by these superannuation changes with its move to cut taxes on superannuation earnings of over $100,000 a year. Sixteen thousand of Australia's wealthiest citizens will pay even less tax on their super; while at the same time 8.4 million Australians will face a future after work with far less money to survive on.
Once again, we see the perverted priorities of this Prime Minister—a prime minister who promised before the election that changes to superannuation were off the table, and that there would be 'no adverse changes' in store for Australians. Yesterday, the Prime Minister told the House that his attack on the retirement savings of working Australians was justified, because he had promised to do so at the last election. That just sums it up.
This is a government that studiously keeps its promises to the top end of town, while breaking every promise it has made to everyday Australians. This is an extreme, out-of-touch government that has broken its commitment to working Australians and it will pay the price at the next election.
On election eve, the Prime Minister promised to be a government for all Australians. Since then, this has been a government for the rich and few, a government for the 16,000 Australians with more than a million dollars in their super and one that makes the rest of Australia—pensioners, patients, students, the unemployed and low-income earners—pay the price for it. Australians did not vote for this at the last election. They do not want it and they will have another say at the next election.
There is one really clear thing that I think the opposition need to understand: if they are talking about the savings for people's retirement, this money comes from—and it has been acknowledged by the Leader of the Opposition, no less—the wages of the workers who pay it. The designers of this scheme back in the eighties—I forget which union leader was running the country with the Labor Prime Minister at the time; I think it was Bill Kelty—said that the superannuation levy was negotiated and wage increases were forgone to build that levy.
When we talk about this money and this superannuation levy, this isn't a mean government not giving them the money; this is simply the government making a decision that these people will keep that money as wages for longer than they would for retirement. Let's understand that before we start.
Then we have all these confected and made-up figures. I love it when the Labor Party start talking about figures, because, with budget estimates and everything else they talk about, you cannot trust or believe anything. They will make up some 25- or 35-year old and how much it is going to cost for their retirement. That may or may not be true. Are they assuming what that person would have done with the money if they had kept it as wages?
Let's assume this 25- or 35-year-old, instead of the increased levy going to their superannuation, paid off their mortgage quicker. What would that mean? Would it mean more money for their retirement, because they have not had to pay more in mortgage costs? These rubbery figures that they always come up with need very much to be examined.
We talk about undermining savings. Some of my colleagues have talked about that already. But, if we want to talk about undermining savings, we need to look at the behaviour of six years of Labor governments. How did they undermine savings? Let us look at a few examples. The carbon tax helped! We are talking about superannuation? A lot of the superannuation of these people is invested in public companies. The carbon tax helped them: increased costs, less cash-flow, more non-competitiveness! Live export bans—that helped their savings! That helped the savings of everyone whose superannuation was invested in agribusinesses! The mining tax helped the savings of everyone's superannuation! As mining companies continue to become more non-competitive, the red tape that that side loves helped everybody's savings as well!
But what do we want to do? We are about people's savings. We are about building jobs; it is pretty hard to have a superannuation scheme when you do not have a job. We are about increasing job competition, and we are about abolishing red tape. We want the $1.8 trillion that is invested in superannuation to not have the costs of a mining tax. We want to encourage exporters. A lot of our savings, a lot of our superannuation, is invested in companies that want to export. What do we do? We do free trade agreements with countries like Korea and Japan—also with countries like China in the next few months. We want our public companies and investors in Australia to do well. That will increase the savings of our people as well.
They say with confected outrage that we are 'haters of superannuation'. But do you know what we did when we were in government last time? We built the Future Fund. That's right. 'What is the future fund?' The Future Fund was a $50 billion superannuation fund for public servants. It has grown to be $100 billion. Do we 'hate superannuation'? We built the biggest sovereign fund that this country has ever had and one of the biggest, if not the biggest, single superannuation fund this country has.
This side of politics did that. When did we do that? How did that how did we do that? Again, let's go into figures and numbers. We paid back $96 billion of debt; we ran good public savings surpluses; and we put that into superannuation. That is our history. We believe in people's savings. Everything we do here is to increase the economy of Australia and our superannuation. (Time expired)