Wednesday, 12 February 2020
Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019; Second Reading
I rise to speak on the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019. Much has already been said about this bill. I think we had a fair time debating this bill in the House yesterday, and as I was sitting in my office I heard the familiar twang of the member for Goldstein, delivering one of his usually very fervent diatribes. I stopped to listen, to see what the member for Goldstein was saying about this bill, thinking he might be defending the bill and that he might be debating the merits of the bill and defending the government's position on the bill and the reasons this bill is necessary. Unfortunately, that wasn't the case, because the member for Goldstein, in attacking Labor and Labor's standing up for workers, took his time to deliver what, to my mind, can only be described as a really quite curious case of hypocrisy.
That said, and considering that we have had some time to debate this bill, I would like to take the time to look at the merits of the bill and examine it in a little more detail, adding, of course, to the debate that has gone before me, particularly from my Labor colleagues on this side of the House. They have pointed out Labor's position on the bill and the reasons we are reserving our position on the bill until we've had a full Senate inquiry, and why we're proceeding cautiously. While we support the principle and intent of the bill, we are proceeding cautiously around some of the aspects of the bill.
To begin, the bill really is a single schedule, just providing that employees under workplace determinations or enterprise agreements made on or after 1 July 2020 have the right to choose their superannuation fund. It seems very simple indeed, doesn't it? And don't we all want the right to be able to determine our own financial future? Don't we all want the right to be able to choose the products on which we spend our hard-earned money. So, choice in superannuation is something that Labor supports. That is why we have a proud track record when it comes to superannuation and why we want to continue to fight for a stronger and fairer superannuation system.
We are also committed to making sure that every worker is in a high-performing fund and that adequate information is available to empower consumers with the information they need to make choices in their best interests. As many on this side have pointed out, while we do support choice, we also want to have those safeguards in place to ensure that that choice is made in a very informed way and that the bill actually does deliver what it intends to deliver. To that effect, the shadow minister put forward some amendments to the bill. Particularly, those amendments point to and speak to Labor's commitment to superannuation, because those amendments ask that the House notes that too many Australians retire without adequate retirement savings. Isn't that a fact? People in my electorate, for example, are coming to me at the age of 60, having just been made redundant after working for 30 years for a company that has either not contributed to their superannuation or not adequately contributed to their superannuation, or they just didn't have any superannuation. Those people are now facing not just the next few years in poverty, being unable to pay their bills and unable to get a job, but, given the fact that Australians are living longer, they're also facing at least 20 and perhaps even 30 years in that condition. It particularly adversely affects women and older women, who are more likely to live in poverty in their later years.
So, I think the amendment the shadow minister moved—that the House notes that too many Australians retire without adequate retirement savings—is perfectly reasonable and entirely appropriate. The other part of the amendment that was moved by the shadow minister reaffirms the commitment to the legislated superannuation guarantee rise to 12 per cent by 2025. I'll come back to that a little later.
Our position on the bill as it stands at the moment is that we note that the Senate Economics Committee is currently conducting an inquiry into this bill, so we reserve our position on the proposed choice-of-fund changes until after the Senate committee has made its report. In other words, we want to see scrutiny of the bill. We want this bill to be scrutinised, and for good reason. I'll go through some of those reasons. The first reason is that we aren't quite sure of the unintended consequences of this bill and whether there will be any adverse consequences of this bill. Concerns have been raised about employees, for example, being forced by their employers into superannuation funds which are underperforming and may be substandard compared to the employees' existing entitlements. This parliament hasn't fully explored the unintended consequences of the bill in that regard.
In a submission to the previous Senate inquiry on the bill, Industry Super Australia indicated that, of those employees covered by enterprise agreements, only 7.4 per cent have no choice of superannuation fund. That's a very small percentage, 7.4 per cent. In actual fact that represents just 1.9 per cent of the workforce. It seems a remarkably small percentage of the workforce that actually have no choice in their super fund. Even within super funds there are choices. When I was an academic, I was on UniSuper, and I know, for example, that UniSuper offers you choice within the UniSuper fund. The industries which have the highest percentage of people who have no choice are education, retail, construction, public administration, wholesaling, electricity and agriculture. There are questions around that which I think the Senate committee should be looking into.
But, whilst we support choice and the intentions of the bill, one of the most pressing and important reasons why Labor reserves its right to fully support this bill and would like to see further scrutiny of this bill in a Senate committee is this government's track record on superannuation and its ideological opposition to industry super funds. Forgive me for being cynical, but part of me thinks that perhaps this bill is just a manifestation of that ideological opposition to industry super funds. My concern is that this ideological opposition to industry super funds goes even further amongst some members of the Liberal-National party caucus. Recently we've seen Senator Bragg call for all kinds of superannuation to be made voluntary for people earning under $50,000.
Absolutely, backed up by another Liberal senator, as my colleague here says. We also had a WA Senator, Gerard Rennick, describe superannuation as a cancer. Describing superannuation as a cancer is absolutely extraordinary, if you ask me. When you have statements like that coming from the other side, I think it's perfectly natural, it's due diligence and it's the right step to take to ask that any legislation that even touches upon superannuation be fully scrutinised and looked over with a fine-tooth comb, because you simply cannot trust that side of the House when it comes to ensuring Australians have the right superannuation, have access to superannuation and are guaranteed superannuation so they do not have to live in poverty in their ageing years.
Thank you for the opportunity to speak on this legislation, the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019. I think it is important that the debate that we are undertaking now sends the strongest possible signal to working Australians about what is being done to their prosperity, both now and in retirement, because what we have is this faux concern of conservatives about the incomes of working Australians, claiming that greater choice needs to be provided to working Australians about their retirement incomes. On its face, absolutely no-one would have an argument about choice—people should be able to make, and are entitled to make, decisions about what's best for them—but always be concerned when a conservative is saying 'working Australian' that they've got their best interests at heart by providing choice.
The member for Cowan just outlined the number of people, who are denied choice as a result of enterprise agreements that cover them, is about seven per cent of people. It's probably about one per cent of the entire work force. So people need to see through this argument that we've got to inject more choice. This has also been evidenced by some of the comments of conservative senators, people from the other place—be it as has been indicated by Senator Bragg or the other new senator from WA that's just come in—who have either described superannuation remarkably as a cancer or who have said that this type of thing, for example superannuation, is a choice.
This really goes to the agenda of conservatives when it comes to retirement incomes for working people. They're quite happy that people who are well-off have their income and financial arrangements sorted out and can look after themselves, and more than enough for them to have arrangements that protect their retirement incomes—but not for average Australians, not for working Australians.
Conservatives are perpetuating, right now, a double whammy, because what they're trying to say is that the superannuation contribution shouldn't be increased in years to come. Why? Because it will come at the expense of wages—that wages aren't growing and how can you then have an increase in superannuation? Here's the double whammy as it affects working Australians: the coalition has absolutely no policy to increase wages for working Australians. They keep saying that they will; they never deliver. Wages have flatlined for absolutely years, so they have no wages policy to lift wages now. Then, in the absence of the policy, the conservatives use that very point to justify no increase in superannuation contributions in the years ahead. So working Australians are hit now, when wages don't increase, and then they will take a hit when they retire, through either moves to make superannuation voluntary or to deny proper growth in the contributions. This is the biggest challenge in terms of the long-term prosperity of Australian workers—that is, the way that this double whammy, as I describe it, of no wage increase now, no superannuation increase in the years ahead and lower retirement incomes when working Australians finally get to put their feet up after working and slogging in workplaces across the country. They are denied prosperity.
The national system of superannuation in this country, by any measure, has been a national success. Economically speaking, when you look at our ranking—our relative strength compared to others—and you look at the national savings pool that's been put in place, we have the fourth-largest savings pool on the planet and we have a system that will provide $3 trillion for investment to strengthen the economy to allow us to support businesses, both here and overseas. There are very few countries that can say they have that. We, then, cannot only provide for a strong economy now but we can provide for retirement incomes down the track. By any measure: very successful. Yet, it seems that the biggest bug bear of those opposite is the existence of this system—(1) of superannuation and, (2) the industry super funds that bring together employer representatives, employee representatives and independents. This somehow is offensive to conservatives. I actually think, in economic terms, the biggest challenge for us, in this country in particular, is to get our heads around the idea that bringing people together actually works. In superannuation terms, the types of arrangements that exist on the board of superannuation funds where you get employers, employees and independents workers together is a good model that shouldn't just be extended from within superannuation but should be the collegiate approach we use in dealing with the big economic issues confronting the nation. We should be ensuring that that's being replicated.
Choice is being denied. The people who support that system constantly get denigration being levelled at superannuation, particularly industry superannuation. People who choose to support that are being told, 'No, you shouldn't have the choice to support that; you should choose a retail fund run by banks instead.' The statistics are compelling—that is, the returns delivered by industry super relative to retail super. No objective person would opt for a retail fund, if they saw the returns delivered. Based on those returns and based on the statistics, we get told, 'No, you need to be given more choice,' as has been extended through the rhetoric behind this bill. People should be given more choice to choose to what? Opt for a lower performing fund? That is what's been argued. Again, this is part of this broad agenda that we're seeing that would deny working Australians much more strength in their retirement incomes when they decide they've worked long enough and want to be able to, when entitled to, draw on their superannuation for retirement income. This is, as I said, the most offensive thing that we've seen. We believe, rightly, we should see this referred off to a Senate committee for further contemplation, to test some of the assumptions behind the legislation and, importantly, to test the mechanics of what the legislation would do when implemented.
More than anything else, in my contribution today, I wish to be able to send the message to working Australians that they are being denied prosperity now through a failure and absence to have a wages policy that sees serious wages growth and through the denied growth of superannuation incomes or contributions that will lead to stronger incomes in the future. This double whammy is ripping working Australians off. We have a situation for those working Australians too. I've made these types of contributions previously, so forgive me for repeating them, but some working Australians are having to hold down multiple jobs. Sure, people might hold down two jobs, but there are a number of people who hold down four jobs just to get by. The fastest growth that we're seeing is in terms of people and their jobs. I wonder about their superannuation and the strength of their post-retirement incomes when, through the bulk of their working life, they've had to hold down four jobs. This is the stuff our parliament should be contemplating.
There's the rampant growth of underemployment: people not getting the hours that they want and people not getting the income outcomes that they want to make ends meet. And then we suggest that we're going to extend superannuation choice to them somehow and that this will strengthen post-retirement incomes when the stats reveal that superannuation outcomes are better in industry super than they are in retail. This is terrible. Ultimately I am genuinely concerned about the public policy ramifications of this. If people's post-retirement incomes aren't keeping pace with what's required for retirees to make ends meet when they've decided they'll no longer work, where does government step in? You can see pressures will likely emerge on government to provide further support to self-funded retirees under a superannuation system that's not delivering to them. We can do these things now, but at some point the bill will fall due and we as a parliament will likely be required to respond to those circumstances. It'll be the result of the decisions we make on bills like this. This is not right. We should be ensuring that working Australians get a better deal. These types of bills are dressed up as choice but are really about delivering fewer choices, weaker income and fewer options for people later down the track. We should be calling out these types of bills strongly.
I definitely support the shadow minister's amendment. I wait to see, through the referral to a Senate inquiry process, what is revealed through that inquiry, because we should not be making rushed or blithe decisions that impact on the future prosperity of Australians who have contributed much to the growth and the strength of our economy through their labour. We should be doing things to support them, not deny them choice in the years ahead.
The original question was that this bill be now read a second time. To this, the honourable member for Whitlam has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. So the question before the House is that the amendment moved by the member for Whitlam be agreed to.