Tuesday, 25 August 2020
Treasury Laws Amendment (More Flexible Superannuation) Bill 2020; Second Reading
A few moments ago government members filed into this place and voted against their own election commitment. I found it extraordinary. The only explanation that I can conjure up to explain what has gone on is that they didn't understand what they were voting for. I'd like to give them the opportunity to reconsider that by putting forward a similar set of amendments in the second reading debate on this bill that concerns superannuation. I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House calls on the Government to ensure that all Australians can enjoy a dignified retirement, including by committing to:
1. the scheduled and legislated increases to the superannuation guarantee; and
2. adequate funding for the aged pension".
This bill has a grandiose title. 'More Flexible Superannuation' hides a very simple measure. Who could possibly oppose a bill entitled More Flexible Superannuation? In this case, not us. The member for Goldstein will be delighted. The bill amends the Income Tax Assessment Act 1997 to extend access to the superannuation bring-forward arrangements to people aged 65 and 66 from 1 July 2020 to better reflect the changing nature of work. That is to say it's a minor fixer to align the maximum age in one piece of legislation with the current pension age. It's sensible and it should enjoy our support, although I am going to come back to that point about the change in the pension age. It is worth the House focusing on that for a moment and in a moment.
So we're going to support the bill. But it does say something about the government that one of their highest priorities during the global pandemic and economic crisis is to make it easier for people with significant assets to make large, non-concessional contributions to their superannuation account. It's not a fix for our beleaguered aged-care system. It's not helping businesses and universities build jobs. And it isn't going to help plug the massive holes that this government has punched in our superannuation system, particularly for the 600,000 young Australians who have had to access their superannuation accounts—
Mr Tim Wilson interjecting—
for want of any—
Mr Tim Wilson interjecting—
other sufficient support from the government—sufficient and timely support.
Mr Tim Wilson interjecting—
I note that the member for Goldstein has got a lot to say in this debate and I also note that he's placed himself on the speakers list, Mr Deputy Speaker Vasta. He'll get his go. He's got a lot to say in respect of me, but I have to say this: I am not the member for Goldstein's biggest enemy in this House. The biggest enemy of the member of Goldstein in this House sits just in front of him—and he's been very, very busy, I've got to say, attending to branch-stacking in the member for Goldstein's seat and the member for Flinders' seat, trying to rearrange the order of votes in the Senate preselection. He's too busy dealing with all these things to deal with the matters that are in his portfolio.
Mr Tim Wilson interjecting—
When former Prime Minister Paul Keating established the compulsory superannuation system, the universal superannuation system, he viewed it, and we view it, as an investment in the nation's future, and that's exactly what it has become: Australian workers owning retirement savings investments, building a pool of national savings in the national interest but also in the interests of ordinary Australians for their retirement savings.
It is relevant and on point that this bill is aimed at addressing an anomaly between the superannuation tax administration arrangements acts, superannuation acts, and the adjustment in the pension age. The pension age has been adjusted from 65 and 66 through to 67. What this reflects is the fact that Australians are now living longer, and it also reflects the fact that we have an ageing population.
This is apposite to the second reading amendment, because prior to former Prime Minister Paul Keating, together with former Prime Minister Bob Hawke, establishing the universal superannuation system—beginning in 1985-86 with Accord Mark II through the award system—30 per cent of Australians had access to superannuation. We had a name for them: men. Women had very little superannuation. Less than 20 per cent of women in the workforce had access to superannuation. Superannuation prior to that was something that was available to salaried men in the workforce, and not really available to the rest of the workforce. That one move, extending it to award superannuation, expanded superannuation coverage of the workforce from around 30 per cent to close to 50 per cent inside of a year, growing again to 60 per cent within another year or two. But it was the superannuation guarantee legislation of 1992 which extended universal superannuation to the entire workforce. As a result of that decision, Australians now have a tax assisted means of saving for their retirement.
Members opposite will often say that it is their money; they should be able to do with it what they like. It is absolutely members' money, not one dollar of which would exist in a member's superannuation account if we had listened to members opposite—not one dollar of it!
They opposed it in 1985 and 1986, when Accord Mark II was struck, and they have opposed every single dollar of superannuation that has gone into workers' superannuation accounts, from the first moment until today. Nothing is more galling to those of us who have followed the passage of superannuation from its very beginning, and have been consistent in our advocacy for workers' superannuation, than hearing those opposite try to pretend that they are champions of individual workers' superannuation, when they have opposed every single cent of it. Those three million Australians who have accessed their superannuation through the early access scheme have the architects of superannuation, Australian Labor, to thank for that, not this mob over here, because not one cent of it would have existed in those accounts if they'd listened to the ranting and the railing of those members opposite. Yes, it is their money, and it's there because Australian Labor had the foresight and the courage to push through the opposition of those opposite, to push through the opposition of the coalition parties, to ensure that workers in this country had access to the same sorts of superannuation arrangements that the salaried men had enjoyed for decades.
I want to talk a little bit about the ageing population. When the Keating government initiated the superannuation guarantee levy, the ratio of workers to retirees sat at around 6½ or seven to one. That is to say, for every one retiree, there were six to seven people within the workforce, with their tax contributions funding, amongst other things, the pension payments of those retirees. We knew back in 1985 that, with the demographic shift, the ageing population, it was simply going to be unaffordable down the track, without significant tax increases or significant reductions in pension payments, for Australia to be able to provide a level of pension payments that was going to keep pace with cost-of-living increases and the expectations of Australians for a dignified retirement. We knew that to be true when the ratio of retirees to workers was one to six.
An honourable member interjecting—
So we put in place a system of tax preferred savings, preserved until retirement age so that the trustees of those funds could invest that money in good investments to deliver the sorts of returns over the long run—the excellent returns—that superannuation members enjoy today, somewhere in the vicinity of six to seven per cent real. That is what they are enjoying through their superannuation investments today, and they have enjoyed that consistently for most of the last 10 years if they're in a good fund. If their fund is not delivering those sorts of returns, they should seriously consider switching to a fund which does, because that's what they should have been enjoying over the last 10 years.
Back then, there was a ratio of six to one. Wind forward to 2010, and the ratio of workers to retirees had dropped to five to one—that is to say, five workers for every one retiree. Move forward another 10 years, and the ratio of workers to retirees has dropped again, to four to one. By the time we hit 2030, when many of these people, particularly the younger ones—perhaps not the member for McMahon and me but some of the younger ones—will still be here, that ratio of worker to retiree will have dropped to three to one.
We are still borderline millennials, you and me, Member for McMahon! That ratio, by 2030, will have dropped to around three to one. So we've got some tough decisions to make. Do we say to our grandkids: 'We're going to drop the ball on superannuation. We are going to drop the ball on self-reliance'—self-reliance used to be a Liberal Party value—'We're going to drop the ball on preparing our country for the future and leave it to our grandkids'? Are we going to put it on the tick and say, 'Darling, can you pick up the bill'? That is literally what they are arguing: don't worry about it; the grandkids can pick up the bill. The ratio of workers to retirees will be one to three.
We don't think that's fair, and on this side of the House we want to maintain a system that is designed to ensure that workers—all workers, not just the privileged ones—have access to a dignified retirement. That was the purpose of superannuation in the first place. I have heard members opposite argue, from time to time, 'Superannuation should be treated as any other bank account.' Let me walk you through a couple of reasons why that is absolute rubbish and how all workers will be worse off if that proposition ever sees the light of day. Let's look at the rate of return that superannuation has enjoyed over the last 10 years. On average, it's six to seven per cent, in some funds closer to eight, per annum over the last 10 years.
Find me a bank that is offering that sort of a rate of return even on a long-term deposit. You can't. Look at the medium-term deposit returns you're getting on a bank investment today. They're somewhere closer to two per cent, and probably closer to one per cent, at the moment, than six, seven or eight per cent. There's a very good reason for that: banks hold cash on demand. It's not invested for 10, 15, 20, 40 or 50 years. It's banked and held on demand, and it can be drawn down very quickly. The banks can't be investing in the long term and can't be getting the sorts of returns that a patient investor, like a superannuation trust, can get, because that's not what they're set up to do. They're set up to have cash on demand. They're set up for a very different purpose. These nongs opposite argue, 'Let's treat superannuation just like a bank account.' You can treat superannuation like a bank account, but you'll get the same sort of return you get in your bank account as well—probably seven or eight per cent less than you're getting today. If that's seriously what they're arguing, they'll be devastating the savings returns for ordinary Australian workers.
Let me say something else about this for those who try and say superannuation money is just like any other money and should be treated the same. It attracts tax preference: 15 per cent on the way in, 15 per cent on the returns of the fund and, if held to preservation date, nothing on the way out. There is no other class of income or investment that attracts the sorts of preferential treatments that superannuation does. It attracts those preferential treatments because we want to encourage people, incentivise people, to save for their retirement. So there's a very good reason that it's not treated like any other money, although some of those nongs over there are trying to convince people it is. I withdraw, Deputy Speaker. It was most unkind of me and to the nongs of this world.
Some of those people are trying to say, 'Let's just treat it like any other bank account.' It would absolutely devastate your savings and the investments of those superannuation funds. It's not the banks that are investing for the long term in our port infrastructures, our airports, our highways, the long-term infrastructure of this country, that require an investment not over one, two or three years or even 10 or 15 years but over 30 and 40 years. Banks play a good role but it's the superannuation funds and that patient capital that's doing the long-term investment, the long-term returns, and delivering excellent outcomes not just for the fund members but for the country.
Jobs, economic growth, putting ballast into business investment, which has fallen off a cliff under those guys over there—superannuation funds are the key to all of that. They want to pull it all apart. Individuals will be worse off, the economy will be worse off, pensions will go down, taxes will go up and retirement incomes will be absolutely devastated. It would be hard to find a government that had a greater grudge against retirees and elderly people than this one. They have frozen your pensions. Labor indexed pensions. These guys opposed it and tried to wind it back and now they have frozen it. They are kicking the guts out of superannuation because they don't understand it or they don't believe in it. It wasn't their idea, so there is intellectual jealousy. They are freezing your pensions and kicking the guts out of superannuation and aged care.
If you were to receive a report from a royal commission that told you that between 30 and 50 per cent of residents in aged-care facilities were malnourished—the technical term is 'starving'—would you sit on that report? Would you sit on that report for nine months, as the hapless aged-care minister has done, supported by this government? No, you wouldn't. You'd act. You'd ensure that those aged-care facilities received the funding, the support, the regulation and the oversight that our senior citizens so dearly deserve. I can't see the heart in this government. They are absolutely heartless—devastating for individuals. But there you have it in one. You've got their trifecta: kicking the guts out of the pension system, ripping the heart out of superannuation and being absolutely heartless when it comes to aged care in this country. That's the trifecta that you're getting from this government.
We give them the opportunity to repent. We give them the opportunity to do a very simple thing—to come in here and vote in favour of their own election commitments. It's a very simple thing. We give all of them over there the opportunity to come in here and vote in favour of their own election commitments. It's actually much more than that. We're asking them to vote in a way that supports a recovery from the economic recession that this government is making ever so much worse, ensuring that we have the basis on which to build an economy and growth into the future; that we aren't kicking the can down the road on the cost of pensions and an ageing population; and that we aren't saying to our kids, 'We're putting it on the tick and you're going to pick up the bill. We'll be long gone and you guys are going to have to pick up the bill.' It didn't used to be Liberal ideology that the answer to everything was to put it on the taxpayer and we'll pay for it down the road. But, surprisingly, it seems to be today.
We are going to oppose them every step of the way. We are going to invite them to vote in favour of their own election commitment when they consider the vote on my second reading amendment. Apart from that, we'll be supporting the legislation. We encourage the government to do the right thing by the retirees of this country, like the right thing by people living in aged-care facilities. We've got a lot of work to do to recover from this economic recession that this mob are making so much worse. Kicking the guts out of superannuation is not the right way to go.
The original question was that this bill be 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. If it suits the House I will state the question in the form that the words proposed to be omitted stand part of the question.
Yet another erudite speech—no, that's the wrong word—empty speech on superannuation from the member for Whitlam. We have this almost every day. In fact, I think this is the second or maybe the third time that he has come into this chamber and shadow-boxed and dodged and punched these key arguments that nobody is actually making. He doesn't actually deal with the fundamental issues. No matter what the member for Whitlam thinks, we can all see what is going on right here, right now.
Once upon a time the Australian Labor Party was the party of the worker. They recognised that Australians wanted to work, earn a good day's income, support their family, own their home and recognise, yes, that they also wanted dignity and safety in retirement. That was when they represented organised workers. They did—a long, long time ago. What the Australian Labor Party today has become is the party of organised capital. What they seek, day in, day out, is an ever-increasing volume of Australians' incomes to go into funds managed by their mates so they can use it to achieve undemocratic means, using the superannuation system for things they could never get through this chamber and the other place. That is what they are.
They are not the party of the organised worker; they are the party of organised capital. They are going to trade the invisible hand for the shadow fist of the trade union movement and their political objectives. That's what this is all about. It's not a debate about Australian retirees because, truthfully, they don't care about them. They don't care about Australian workers. They'd literally rather take more money out of the hip pockets of Australians today when they desperately need it and funnel it into the funds of their mates than improve the material conditions of Australian workers right now.
I don't think this is bad; I think this is scandalous. I think it's the most outrageous thing I've ever seen in public policy. And they do it coming into this chamber with crocodile tears as they stab the people in the back that they claim they're representing. And they do so on the basis of a dishonest argument from the outset. The dishonest argument is that the most important thing for retirement security is the size of your superannuation balance. It is not. The most important thing for your retirement security is to own your own home. Yet, we turn around the priorities of this country in the legislation that they will consistently support and will attack vehemently much more than if you ever criticised the unions these days. It is to keep in place an entrenched system where the priority for young Australians—people who are only 20 years old—is to save for the compound benefits of something that's not going to happen for another 50 years at the expense of them having that income to save for a home that they'll get a benefit from for more than 50 years.
This is scandalous, and a complete reprioritisation of human need for their political interests. And what happens? Australian incomes, 10 per cent of their incomes or nearly, goes out of the hip pockets of Australians into the funds that they support. And where do the donations end up? But in the hands of the Australian Labor Party. It is a form of political money laundering, and that is the basis of their political objectives on this issue. And so, once again, we have had this silly amendment because the member for Whitlam, like the member for McMahon and all those on the other side, go rabbiting on about how they care so much about Australian retirees' security, yet in this chamber—and the member for McMahon will experience this; I know he had a go at me in the previous speech. I know his policy on franking credits. We exposed his policy on the retiree tax, and I know that burns still to this day because you can hear it in the snark in his voice. In the end, they went to the last election saying, 'We are going to push Australian retirees below the poverty line,' and they have the gumption to come into this chamber and then lecture people on this side about how they care about retirees' security. No matter how much we pointed out to them that their retiree tax would smash the livelihoods of people who are independent—people with sicknesses, people who have disabilities, people who are low-income earners or, particularly, women—it didn't matter what we said, and it didn't matter what Australians said, they wouldn't listen. They sat arrogantly on the other side of the chamber and lectured us because they knew better and because this is their mad ideology.
The good news is that the people of Australia had their say and exposed their empty policy then like they would expose their empty policy now. There are so many bodies that have looked into the economic consequences of what happens if you keep increasing the compulsory contribution to superannuation. The Australian Council of Social Service says that this will hurt low-income earners, that it will make it harder for them to get a job. That doesn't matter—it's the Labor Party who's the priority here. The Treasury says, 'This will cost wages and wage growth.' Those opposite say: 'It doesn't matter. We've got to get that money into our friendly funds.' The Grattan Institute has looked at the long-term impacts of enterprise bargaining agreements and the impact on wages and come up with exactly the same conclusion—but that's fine, because, if we didn't do this, the Labor Party would lose cash flow.
The Reserve Bank of Australia appeared before the House Economics Committee meeting, and the Reserve Bank governor drew an explicit correlation between increasing the compulsory super guarantee and slower wage growth and then went on to draw a broader correlation between that and jobs. Let's face it: if there is anything at this time—at this recession caused by the coronavirus—that is going to be critical for young Australians, for families and, frankly, for everybody, it's to create the job opportunities for the next generation of Australians. If you haven't got a job, you're not chipping into your superannuation account. But those opposite don't care, because their only interest is themselves. This is why we have to stand up on this issue. They would trade the future opportunity of young Australians for themselves. To feed their own interests, they would force them to continue to lose the opportunity to own their own home. And where does the money go? It goes into funds where you lose out on the fees and make donations to the Australian Labor Party. It is a scandal. If you want to know how much of a scandal it is, you just need to go and look at the answers from Industry Super Australia themselves. In answers to the Economics Committee, we got research that they wouldn't publish otherwise and that they wanted to keep secret. It only reinforced what everybody else was saying—while they turned up in other public squares and said the opposite.
This is the mad ideology that sits behind the Labor Party today—the party of organised capital. They don't prioritise the interests of Australians and how those Australians want to pursue their lives, their opportunities, their aspirations and, yes, their retirement security. I keep making the point—because it's so important—it is madness that we turn around to a 20-year-old and say, 'You must save for your retirement, which is in 50 years time, at the expense of owning your own home earlier and having more than 50 years of ownership and security that comes with it.' The people who do worst in retirement are not people with lower superannuation balances. They are people who rent, because they face ever-increasing rents as time goes on. Yes, there's also a correlation, often, with having a low super balance—that's true. But they are the people and they are the ones who are shown the most contempt by the people sitting on the other side of this chamber.
I get passionate about this issue because I can see the rort that sits at the heart of it. For the member for Whitlam to come in here and constantly rant and rave in defence and say that he's standing up for workers when he's doing the exact opposite and facilitating a system that feeds his friends at the expense of small business, the worker and their retirement security, I find truly extraordinary.
We ultimately have to stand up on this one. We on this side of the chamber want to create jobs so that young Australians have a go—so they can have a go, so they can have some chance of getting their go. But we don't hear that from the other side. You hear their sneers towards those Australians who, in a time of crisis, were given the opportunity by this government to be reunited with their own money. Those opposite come in here and say, 'We voted for it.' Go back and review the speeches on the day—they did so very reluctantly because they knew they would be exposed if they didn't. They continue, in public and in this chamber, to oppose it rhetorically. There's a sneer in the heart, because in the end they would rather the money stayed with their fundie mates than let Australians keep their own homes. I heard it in question time today. The Leader of the Opposition said, 'So it's supposed to be used towards mortgages?' Yes, if it's a choice between people losing their homes and drawing down early on their superannuation balance, I'd support them drawing down on their super balance if they wish. The material impact, the long-term impact, the societal destruction, the family destruction that can happen from the alternative is so much greater.
We're all going to face choices during this recession. We will all face choices when we come into this chamber and decide whether or not we want to build an Australia for future generations. That's not the priority that sits at the heart of the Labor Party today. I can give you one guarantee that is absolutely square focus of what I stand for: I want young Australians to have their go too, and I don't want it taken from them by the Labor Party so they can feed themselves. Now is the time to stand up and to call out the empty rhetoric and the empty logic of those that sit on the other side of this chamber.
I've just sat and listened to a speech given by the member for Goldstein at maximum volume—which should be recorded for the sake of Hansard so that all those who read it in their head in the future read it at shrill yelling volume so they know its full impact. I heard him argue at that volume against superannuation—against superannuation, the entire scheme! I think many people in Australia will be interested to know that in fact his position is that superannuation, as a scheme, is madness, that the commitment that the Morrison government took to the last election to stay with the already legislated increase to the superannuation guarantee is, and I quote the member for Goldstein, 'mad ideology'. Where was this high-octane, high-volume argument against the government's own policy in the lead-up to the election?
It's one thing to come in here and shout and rave and suggest in a way that has absolutely no basis in fact and is hardly comprehensible that the entire scheme of superannuation is somehow about feathering Labor's nest. It's one thing to do that—it's another thing to actually be honest with the Australian people and say that superannuation is a scheme that has been in place for many, many decades and that the Morrison government has no intention of completely dismantling it in an open and transparent way; its intention is just to chip at it and chip at it and chip at it. And who gets the money that apparently is going to be spent buying all of these houses? Could it be, perhaps, the people that donate to the Liberal Party? I might just leave that out there.
It is just beyond the pale to have the member for Goldstein come in here and say that superannuation is madness and that the government's election commitment to abide by the legislated superannuation guarantee increase is mad ideology. I might note that all of us privileged enough to serve in this place have a superannuation contribution of 15 per cent, whilst people on the other side are arguing against their own policy for working Australians to have a superannuation contribution of 12 per cent.
Here are some actual facts that show the superannuation system we have in Australia, which is world leading and a proud legacy of Labor governments, makes the economy stronger. It's a savings pool to invest in jobs and growth. It means Australians own more of the country and more of the wealth that our country creates. If Australians have less superannuation, they're going to have more reliance on a pension and less money for their retirement—and we know that we have a government that wants to increase the retirement age to 70. Superannuation was created to fix the budget and to give retirees a dignified retirement. Those people that the member for Goldstein and others on that side say they're fighting for—this younger generation of people who dream to own a home—also deserve to have a dignified retirement. They don't deserve to have a government that says, 'We'll think about how we're going to afford to pay for your age pension sometime down the track,' because it's not really going to be our problem. It's going to be some other government's problem in future years to fund what will be an enormous pension call on the budget if they get their way, which the member for Goldstein has made absolutely obvious in his speech, and they dismantle the whole superannuation system.
Superannuation contributes twice as much to retirement incomes as the age pension. So consider the impact when people's superannuation is denuded in the way that this government wants and encourages it to be. Superannuation is also either the largest or the second-largest asset most Australians have. The current average balances at retirement are $270,710 for men and $157,050 for women. I'm going to come back to that gender disparity in superannuation and the implications of it later in this speech. It means that more Australians retire having to rely not on a full pension but only on a part pension and it means more Australians retire with a superannuation income that gives them dignity in their retirement. If we stick with 12 per cent, the median balance at retirement will be more than $300,000 for women and more than $600,000 for men, and workers on the lowest incomes will be between 15 and 20 per cent better off than they will be on the age pension alone. That's standing up for workers. That's standing up for low-income workers. Yet we have a government that has decided to encourage Australians to raid their futures—to raid their retirements, in the form of their early access superannuation scheme—to get through their current circumstances instead of having a proper and comprehensive plan to help them get through. No-one is critical of individuals who have taken the opportunity to access that scheme in good faith. The criticism is levelled at a government that is telling Australians that that's a good thing to do for their future.
We know from industry analysis that the estimate is that a 20-year-old who withdraws $20,000 under the scheme could lose more than $120,000 from their retirement balance, a 30-year-old who accesses $20,000 could lose about $100,000 in their retirement and a 40-year-old could lose more than $63,000. It's not right and it's not fair to say that the most significant way to get through this pandemic is for people to raid their future to survive their present. It's also not right and not fair to put off the future impact on a budget.
Six hundred thousand Australians have emptied their superannuation accounts, and 494,000 of those are under the age of 35. These, remember, are people under the age of 35 who are significantly impacted by this pandemic and the recession, and they're now going to be significantly impacted in their future because they miss out on compound interest. We also know that the early superannuation access scheme has been the subject of significant allegations of fraud and misuse, and that's had to be referred to the Auditor-General by Labor so that it would be investigated.
Women, who already have significantly less superannuation in their accounts than men, have been more likely than men to access the early withdrawal of super. Recently, we've seen in Victoria more than 30 community and union organisations to get together to lobby the federal government and the national cabinet—if it remains after what we've seen in parliament over the last few days, with this federal government attacking state governments—urgently to address the worsening economic conditions of working women during COVID-19. McKell Institute research found a 7.1 per cent decline in the number of Victorian women in jobs since March and has identified that job losses among women were at five times the rate of job losses among men in July. That research has concluded that recent policy decisions mean disproportionate economic impacts on women are likely to accelerate. And what did the McKell report identify as those poor policy designs and ill-considered decisions? The early access to superannuation scheme, the end of the so-called free child care and the ripping away of JobKeeper from childcare and early education workers. The impact on women predicted by the McKell Institute is poverty in retirement.
We already know that the fastest growing cohort of homeless people are women over the age of 55. There are a number of factors that play into that, and one of them is their poor levels of superannuation and retirement savings, particularly compared to their male counterparts. Women's Health Victoria chief executive Dianne Hill was quoted in The Age recently as saying that women are more likely to be at the front line of the pandemic as essential workers, more likely to lose their jobs, more likely to have increased caring responsibilities and more likely to access their superannuation early to meet basic needs. A cohort of Australian workers who are already suffering in retirement from lack of superannuation have been forced, because of a range of poor and ill-considered policy decisions, to access their superannuation early to meet their basic needs. So, when the member for Goldstein talks at high volume and high pitch about the future for Australian workers, perhaps he needs to just calm down for a moment and think about these women and the impact of policies on them.
I want to endorse something else that Ms Hill said to The Age, which is that we must seize the opportunity to tackle these gender inequalities and build a more gender-equal society. That's what we should be looking at in terms of reforms to superannuation, not walking away from the government's previous election commitment to abide by the increase to the superannuation guarantee and the other reforms which are clothed in choice but are really about dismantling our superannuation system bit by bit.
Of course, there are many Australians who rely on the pension in retirement, and the pension, in so many circumstances, is just not adequate for a dignified retirement. Jenny recently called my office about the age pension. She was really saying, 'How am I going to survive without an increase, particularly now that there's the freeze on indexation?' Jenny has to shop online at the moment in order to get her groceries delivered, which means it's much more expensive for her. She is on the pension and struggling to afford to buy her groceries online.
Noel, a constituent, contacted me some time ago. He is not necessarily a supporter of my party, but he really wanted a message brought to this parliament and the Treasurer. He noted that there was a review into retirement incomes—I'm not sure what happened to the government's review on retirement incomes; we haven't seen that yet—but this is what he wanted me to raise back in June. He said: 'The recent increase in the age pension was $8.42 per fortnight. This, of course, equates to one cup of cappuccino a week. Our retirement savings have taken a huge hit. We trust the government will review the pension, the assets and income test, and the deeming rates. My wife and I are hitting 80 in a month or two and we don't have much time to recover financially. The age pension increase wasn't enough.' I haven't spoken to Noel recently, but I can't imagine that the news that the indexation isn't going ahead is going to make him feel any better. I should also give a shout-out to his wife, who is a terrific tennis player and, I understand, has a club in common with the Treasurer.
One of the other issues raised with me by a lot of my constituents about the pension is fairly summed up by an email from Phil—which I think is in capitals because it was at the same volume as the member for Goldstein's contribution! He said: 'Why are the old age pensioners always left out in the cold when it comes to giving money to help us out a little bit? There's one fact they keep forgetting: most of us paid our taxes for 50 bloody hard years. I get $750 in April and $750 in July and that's bloody it. Is that fair?' (Time expired)
It's always interesting to rise in this place and speak about superannuation. My good colleague the member for Burt is here, and also the member for Kingsford Smith. I know they have more than a passing interest in the subject. I will reflect first and foremost on what this government has done for superannuation over the past few years. I spent more than a little bit of time in the superannuation industry prior to my time in this place, so I well understand not only the importance of superannuation to members of our superannuation funds but also the importance of the capital it provides for our economy more generally. The intersection of both of those is an important consideration in anything we do.
I have heard a number of comments from those opposite about the early release scheme. I think around 20 per cent of the funds people have taken out of their super has been used to cover debt repayments. I think that is critically important during this period. Whilst I understand that there are longer-term consequences for those decisions, the immediate consequence in a lot of these examples is that people keep a roof over their heads. I think that is a far more important current consequence of being able to access super—keeping a roof over their heads—and we can deal with and work through the longer-term issues that result.
Of equal importance is the work this government has done in the six years we've been in office to tidy up and improve the operation, transparency and efficiency of our superannuation funds. We recognise that a successful, well-run, transparent superannuation fund is good for this country on many, many levels—critically, no more so than in underpinning people's wealth creation and their planning for retirement. After owning their own home, superannuation for most people is their next biggest asset. We focus on ensuring that Australians can reap the full benefits of that superannuation system by ensuring that members of our super funds and everyday Australians are the priority and at the forefront of the decision-making process with respect to superannuation. That's why, since we've come to government, we've passed legislation to improve the efficiency through strengthening the powers of the regulator to deal with underperforming funds. We've capped fees on low-balance accounts, which has helped around seven million Australians save some $570 million in fees in the first year alone. Imagine what that's going to add up to over 20 or 30 years.
We've banned exit fees on all superannuation accounts, and for the first time ever the ATO has had the power to proactively unite low-balance and inactive accounts with active accounts. This has seen the ATO proactively reunite almost 2.5 million accounts with almost $3.2 billion in savings—again, saving in fees and costs for running those super funds. I well remember the day a new client who had eight different superannuation funds came into my office, and it took some time and work to combine all of those into a single fund.
We're focusing on delivering a better superannuation system for everyday Australians. When I talk to people locally in my community about superannuation, business and a range of issues, they want to know that their funds are well invested and well managed and that there's going to be something there for them in their retirement. Whether it's the employees at Beenleigh Glass, those at Luv a Coffee or those on the production lines of places like Thiess or ATP Science at Loganholme, these people every week have 9½ per cent of their wages effectively forgone and put into superannuation because that was, as those opposite have pointed out in their contributions, part of the trade-off for setting up super—not only that initial three per cent but ongoing future increases as well.
We want to see people enjoy a dignified and comfortable retirement, but that covers a range of issues. You don't just look at superannuation in and of itself. You have to look at the ability of people to have their debt repaid by the time they get to retirement. You have a look at the decisions people want to make about the style of retirement they want to have. Do they want the lifestyle they've led in the years prior to retirement, or are they prepared to modify their lifestyle to have a more relaxed retirement? All of those decisions are critically important for people as they come to that important decision in their life.
But this week we've also got on with the job of delivering for the Australian people. I'm very pleased to note that today the Senate passed the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019. This bill will provide a choice of fund for more Australians employed under federal enterprise agreements and workplace agreements. I made a comment about this yesterday in the Federation Chamber, and I challenged the shadow minister to support this bill in the Senate if they truly believe in choice and opportunity for Australians to choose where their money goes. Well, I wasn't disappointed, because the shadow minister and his colleagues on that side of the chamber didn't take up my offer. They voted against the choice bill in the Senate today. They can talk about the importance of superannuation, the importance of choice and all of those things. They can say all the right things but, at the end of the day, you don't look at what they say; you actually look at what they do. And they voted today to stop the Australian people from having a choice of where their superannuation money is placed if they have an enterprise agreement—again, for one simple reason: to protect the interests of their mates in the industry super funds. I've spoken about this plenty of times in this place. I was pleased when that legislation first passed through this House. But it's not the first time that those opposite have voted against that legislation. It was considered in previous parliaments, and the opposition refused to support it then, and it's refused to support it now.
Denying members choice is fundamentally unfair, anticompetitive and inefficient. It's one of the reasons that we finish up in a situation where people have multiple superannuation accounts. Those opposite want to perpetuate the impediment to Australian people's ability to develop a sustainable balance in their superannuation funds to give them a sound retirement—shame on them. Whatever they have to say in this place on superannuation are just hollow words and noise, because, when push comes to shove, they don't turn up and support superannuation.
In relation to this bill, as workplaces evolve and become more flexible or workers demand more freedom from their working arrangements, it's imperative that our superannuation system is fit for purpose and has the ability to adapt to modern requirements. This bill amends the Income Tax Assessment Act to extend, from 1 July this year, access to superannuation and the bring-forward arrangements to people aged 65 and 66, which will better reflect the changing nature of work. It will also allow people to make up to three years worth of non-concessional contributions to their super in a single year. This is important as people seek to downsize or change their arrangements prior to retirement. It helps older Australians boost their retirement savings within the super environment and gives them greater flexibility to make these contributions to super as they enter retirement. This bill also aligns the cut-off age for the bring-forward arrangements to 67, which is the same age for eligibility for the age pension. This is a commonsense measure which ensures the simplification of a number of age based measures in the legislation.
I acknowledge that, whilst this bill is relatively straightforward, as I've said previously, it's yet further evidence that this government is committed to the superannuation system and to getting the best outcomes possible for the millions of members of super funds. As I outlined earlier, we've made a number of changes to superannuation since we were elected in 2013. We'll continue to refine the system to ensure the best possible outcome for members. We make no apologies for seeking to focus this week on protecting the interests of members through the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill. I'm pleased for members of Australian super funds that we got that bill through the Senate today. I commend this bill, in its original form, to the House.
If you didn't know anything about superannuation and you wanted a crash course in compulsory superannuation in Australia, all you would need to know is this: the Liberal and National parties don't support superannuation. When they're in government, they do their best to water it down so that workers in Australia retire with less in their retirement savings than they otherwise would have. Labor takes the opposite approach. We established the superannuation system. We believe in it, we're very proud of it and, when we're in government, we do our best to strengthen it so that workers retire with more in their superannuation accounts and can enjoy a dignified retirement. The differences between the two parties are clear when it comes to superannuation. Labor's philosophy is that superannuation is about government saying to workers: 'Thank you for all of your hard work and all of the work that you did over the course of your working life to build the national economic wealth of this country. We're going to support you by giving you a tax concession to encourage you to save for your own retirement so that you can do things like own your own home and have an annual holiday every year, and to ensure that you can pass something on to your kids and your grandkids to give them a good life.' That's what superannuation is all about, and that is what this government is trying to undermine.
At the moment, the government have two policies that will undermine the philosophy of superannuation providing a dignified retirement for workers in this country. This isn't the attack on superannuation that we ordinarily get from those opposite when they get to government, chipping away here, chipping away there. This is a full-on double-barrelled attack on people's retirement savings, through the superannuation early release scheme and now the campaign that's once again going on amongst government MPs to scrap the promised, guaranteed, legislated increase in superannuation savings for Australian workers.
On the first one, we know that members of the government are encouraging Australian workers to raid their superannuation accounts in circumstances where they might not need to and might be able to get through this difficult recession period without having to do that. The evidence of that is in the fact that data released by companies like AlphaBeta, analysing the bank transactions of Australian workers, shows that in 40 per cent of the cases where people have raided their superannuation accounts there has been no discernible fall in their income. They've just taken the opportunity to get this money and, in some cases, go on an unnecessary spending spree. The evidence of that is in the fact that 10 per cent of the funds was spent on gambling and another element of it was spent on alcohol and tobacco by people who didn't have a reduction in their income. They are the Australian workers who are going to suffer down the track, because, as we all know, the great beauty of superannuation is in compounding interest. It's in the fact that a small nest egg becomes a big nest egg over the lifetime of a worker. It is Australian workers who are going to suffer in circumstances where they may not have needed to raid their superannuation but have been encouraged to do so by this government.
The second element is the campaign by many on the other side to reduce or get rid of the legislated and promised increase in minimum amounts of superannuation for Australian workers. This is the 9½ to 12 per cent staged increase that has been legislated and was promised by the Prime Minister and members of his government in the lead up to the last election. We believe they're about to announce that they're not going to go ahead with this. They'll come up with the usual arguments. They'll say, 'We believe that it's better that it goes into wages, that people get that money now and can use it to try and buy a new home or ensure that they're secure at this point in their lives.' It's complete rubbish, and we'll know it's complete rubbish, because the last time that this occurred—when the Liberals were in government under the Howard government and they put a stop to legislated increases in superannuation—they used the same arguments: 'We'll put it into wages. Everyone will get a wage increase.' Guess what happened? It didn't go into the pockets of workers. It went into the pockets of employers in profits. Wages growth actually fell after those legislated increases were abandoned by the Howard government.
That says everything about what this mob is about. They're not about ensuring that workers are better off. They're not about ensuring that workers have dignity in their retirement. They're about making sure that employers get the opportunity to keep more of the income that they generate and turn it into profit for their businesses. That is wrong. That is deceitful. They are misleading the Australian public by holding out the hope that they will get more in their wages when they know very well that the reality is that that doesn't work. The notion of trickle-down, that it will end up in the pockets of workers, simply doesn't work, and they're about to try it on once again. We all know that they're warming up for another broken promise to the Australian people and another broken promise when it comes to superannuation.
The great beauty of the Australian superannuation system that Labor established is that it works. The evidence of that is in the fact that Australia is the 16th-largest economy in the world but we have the fourth-largest pool of savings funds. We certainly bat above our average when it comes to providing government policy that incentivises people to save for their retirement. That is why Labor is justifiably proud of that system. If you go back to before compulsory superannuation was established, 65 per cent of Australian workers had no retirement savings whatsoever. Now it's the complete opposite, and most Australian workers have at least some retirement savings, although they're going to be whittled away by those two policies that I just mentioned from this government.
So it's important that we protect the integrity of the superannuation system, because it's been successful—and that is why Labor is justifiably proud of the system that we built. But you don't have to ask anyone about the statistics. You just have to ask the average worker who has benefited from compulsory superannuation right through their working life. They might have been on a voluntary scheme through an EBA prior to compulsory super coming in, and then they've benefited from the compulsory scheme that was established by the Hawke government. That person will tell you how they've benefited from the superannuation scheme. The advantages that that worker has received, in a dignified retirement, justify the policy, and yet that is what the government is trying to undermine.
Labor is justifiably proud of the system that we built, and we're going to do all we can to defend it to the hilt, because we believe in the notion of superannuation. We believe in the dignity of retirement for Australian workers who have put their heart and soul into working their entire life and into building the great nation and the economic strength that we have and that we're able to use at times like this, when we enter into a recession. We can call on those savings to make sure that we continue to have people in employment and get through this difficulty and get back on a growth trajectory for our economy. That is why we will continue to raise these issues in this forum in respect of bills like this.
I certainly support the intent of this bill, because it provides a sensible amendment to the Australian income tax laws that extends the bring-forward rule for non-concessional contributions to allow those aged 65 and 66 to make up to three years of non-concessional superannuation contributions. Current laws allow this up to 64, and the current law's inconsistency with pension ages is an artefact of the change in pension age. The annual non-concessional contributions cap is currently set at $100,000 a year, and this cap limits the amount of after-tax contributions that can be made into super each financial year. Individuals are able to bring forward some of the amount of that cap if they meet specified criteria—having less than $1.6 million in that balance and not having recently used the bring-forward arguments.
In this amendment to our income tax laws, we're encouraging people and giving them the opportunity to save more for their retirement. That's a good thing. But the government is seeking to undo the good work in this bill with the policy of allowing people to raid their superannuation accounts and the foreshadowed proposal to ensure that we don't increase compulsory superannuation. It doesn't make sense in the current environment, when we're facing a very difficult economic circumstance. We're in recession. We need to be doing all we can to encourage people to save more so that there is that pool of investment funds for businesses to invest once we get the economy up and running again and get people back into work. That is why Labor is so passionately committed to opposing what the government is trying to do for Australian workers, and that is why we will fight to maintain the integrity of the Australian superannuation system, for the dignity that it provides for Australian workers who have put their heart and soul, throughout their working life, into building the economic wealth of this nation.
This year, 2020, has been difficult for many. It's been a difficult year because of the twin crises of health and economic fallout from COVID-19. This year has shown us many things. It's shown us how resilient we are as a nation; it's shown us how important it is to have a government that, through strong economic management, has been able to manage this crisis with a balanced budget; and it's shown us, in so many ways, how we've been able to adapt to such an uncertain environment.
I'm proud as a member of the Morrison government, as I'm sure my colleague the member for Braddon is, that the measures we have put in place and continue to work on have helped save lives, and they've saved livelihoods. I'm pleased to be able to speak to people in my electorate about our plan for the future as we all play our part in the economic recovery. We've had to be flexible in our lives like never before about how we interact with our family and friends, how we go about our day-to-day activities and—probably the most significant—how we work.
We heard earlier today, in question time, the Attorney-General outline the importance of that flexibility in the workplace, in keeping people in jobs and saving livelihoods. But Australian workplaces have been changing and evolving for many years. We have seen a consistent rise in workers taking career breaks and in part-time or job-share arrangements to be able to raise their children. Mr Deputy Speaker Wallace, you know that a few weeks ago my wife and I welcomed our second child, our beautiful baby girl, Isabelle, into our family.
Thank you, Member for Braddon.
Dr Chalmers interjecting—
Thank you, Member for Rankin. I appreciate the members' congratulations. But the point to be made here is that, at this point in my life, with a young family, it's important to me that we as a government do everything we can to support mums and dads as they raise their families and, ultimately, as they return to work and use their working lives to plan for retirement.
The decisions we make throughout our working lives have a bearing on our future, particularly into retirement, and this government recognises that the modern workplace is changing and will continue to change. People are seeking more options when it comes to their work arrangements during the different stages of their lives, and workplaces are rightly adapting so they retain the best of those staff. Just as we are seeing our workplaces change and evolve, now, more than ever, so too must our plans for retirement. That's why I'm particularly pleased to support this legislation today. It's about an important measure to ensure that our super system is able to reflect the flexibility we are seeing in modern Australian workplaces.
Fundamentally, we believe that Australians should be given as much flexibility as possible when it comes to spending and saving their own money. You only have to look at the outrage from the previous Labor speaker and how they consistently spoke about their concerns about the government's recent decision to let Australians doing it tough withdraw their super to help get them through this tough time. We have to remember—and it goes back to this fundamental principle—that it's their money. It's their money in their superannuation accounts. It's not the Labor Party's money. It's not the industry super fund manager's money. It's the Australian people's money.
We know Labor's outrage is because, fundamentally, they like to tell Australians what they can do with their money. Labor think they can spend your money better than you can. Labor think their priorities are more important than your own. That's the reason they didn't bat an eyelid when they went to the last election proposing $387 billion in extra taxes—money out of the pockets of Australians—and why they were so shocked and surprised when they were rebuffed.
They still don't get it. The member for Throsby recently described 500,000 Australians taking up the option of a second withdrawal of money as 'a run on super' and accused the government of trying to cancel superannuation. What a load of utter nonsense from an opposition that is desperately seeking relevance. People are using this money, drawn out of their super at a time of great financial hardship, to fund their mortgage, to keep their kids in their independent school with their friends, to reduce debt on their own balance sheet—and Labor continue to say that these people are wrong to have that choice. We trust Australians to know better than the politicians in Canberra what their financial priorities are during a one-in-100-year global pandemic. We trust them with their money, with their super. We are on their side.
As the PM said today, Labor, on the other hand, is on the side and on the puppet strings of industry super funds. It just goes to show, once again, that the Australian people knew this at the last election and that is why they chose the coalition government. Labor will always be a higher-taxing government, a high-regulating government that doesn't respect the principle of choice for everyday Australians. We on this side of the House do understand that principle. We do respect Australians making their own decisions when it comes to their own money and we do believe in giving them greater options when it comes to their super. That is not because we are trying to destroy it but because we are trying to make it as strong as possible and as flexible as possible to meet the different needs of all Australians. And that's why we've introduced these important measures.
The bill will allow our older Australians to boost their superannuation savings via voluntary contributions when they are in a position to do so—and, again, it's about providing that flexibility. We'll do this by lifting the cut-off age from 65 to 67, allowing people aged 65 to 67 to make three years worth of non-concessional contributions in a single year. By providing this measure, we are helping older Australians boost their retirement savings when they are in a position to do so. We understand that planning for retirement and that transition phase can be stressful for many senior Australians. By providing greater flexibility we will be able to help allay some of those concerns about the future. Notably, this will also align with the cut-off age of 67 for the bring-forward arrangements for eligibility for the age pension, which is scheduled to reach 67 by 1 July 2023. It is, of course, just one measure in a much broader package outlined in the 2019-20 budget aimed at helping older Australians save for their retirement. The remaining measures are to allow people aged 65 and 66 to make voluntary contributions to superannuation without being required to work a certain number of hours per week and allowing people aged 70 to 74 to receive spouse contributions.
This government has a strong record of supporting our older Australians. We're passionate about it. We are allowing more older Australians to contribute more to their superannuation and recent retirees to make further super contributions. We've cut deeming rates. This means a boost to pension and welfare payments to around one million Australians. We're also helping to boost retirement incomes by expanding the Pension Loans Scheme and we're providing greater choice for older Australians to remain in their homes longer by delivering more home care packages. Finally, most importantly, we've saved older Australians from Labor's reckless retiree tax.
I would like to thank our older Australians for their contribution, particularly to the local electorate of Ryan and to our nation. I will continue, as all of us on this side of the House will, to support them in their retirement. I am very pleased to commend this bill to the House for the flexibility it provides those older Australians.
I rise to speak on the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020. Today, for the very first time since compulsory superannuation was introduced three decades ago, something really quite remarkable happened. What we saw today for the first time ever in our compulsory super system is that, in net terms, the superannuation balance of this country actually declined, by which I mean people took more money out of super than was put in. That hasn't happened before. On this side of the House—I know the member for Perth would agree with me, along with the previous speakers from this side who have contributed to the debate—we think that is a tragedy. We think that invites all kinds of intergenerational carnage, all kinds of disadvantage, all kind of consequences that we'd hope not to see in this country, in its remarkable superannuation system. The problem is that those opposite see those kinds of outcomes as 'mission accomplished', and that is really troubling.
That's why my colleague the member for Whitlam has moved this really important second reading amendment. It makes the point that, although within the narrow confines of what is being proposed in this bill specifically we will support it through the House, we will not support, we do not endorse and we do not welcome some of the really damaging, destructive attempts by those opposite to diminish and undermine the superannuation system, which is not just a proud creation of Labor governments of years past but a proud creation of the Australian people. It is something that we can be genuinely proud of—something which has its imperfections but something which the rest of the world looks at and thinks, 'It would be good to have a system like that.' So we support the bill, but we do not support and will not support the attack on super, or the attack on pensions which we 've seen in recent months and which we all know is coming in the budget or at some point really quite soon.
More than a month ago, those opposite received the report of the Retirement Income Review. They received it last month, on 24 July, the day after the budget update, and they've sat on that report now for more than a month. Our fears about that Retirement Income Review all along—and, if anything, our fears are more pronounced, now that the government has been sitting on it for so long—are that they would use the review as a stalking horse for more cuts to superannuation and more cuts to the pension. We've spoken publicly about those fears for some time now. A number of us—the members for Whitlam, Kingsford Smith, Barton and others, and the Leader of the Opposition—have said that this should not be a stalking horse for more cuts to superannuation and the pension. But we all know what's going on here. You can see them coming from a mile away. The party of wage stagnation and rampant wage theft is now gearing up to rob workers of their superannuation savings as well. When that 2½ percentage point increase in compulsory super from 9½ per cent now to 12 per cent could go to wages or to super, those opposite actually want it to go to neither. They want to make super voluntary. They want to take the 'compulsory' out of compulsory super.
The thing that is especially galling about this is that, when the Prime Minister and the Treasurer needed to get themselves through an election and its aftermath, they promised repeatedly—over and over again, I asked them about it in question time, and they said, from that dispatch box—that they had no intention of changing the legislated superannuation guarantee increase. But we have known all along that this was rubbish. We have always known that, if you want to work out what the Treasurer of this country is going to do, you just need to hear what some of the weirdos up the back on that side of the parliament are saying. So we've known for some time. We saw this sort of bizarre auditioning for the member for Deakin's ministerial slot or Senator Colbeck's ministerial slot. We saw them time and time again, one after the other, step up to try and diminish superannuation. And we know that, in this Liberal Party, the tail wags the Treasurer. We saw it on energy policy and we're seeing it now on superannuation. Remarkably, we have a minister for superannuation who, when asked by Fran Kelly whether the minister for superannuation had a view on the legislated super guarantee increase, literally said, 'I'm ambivalent about it.' It would be like the health minister being ambivalent about hospitals, and the education minister being ambivalent about universities. It really is quite an absurd state of affairs—this minister for superannuation, ambivalent on the big issue, but spending a lot of time on Twitter, probably all of their time on Twitter, instead of protecting and advancing superannuation in this country.
It comes as no surprise, really, to any of us that now, of course, the Treasurer and the Prime Minister are inching over and inching over and inching over—and we all know what's coming. Once again, they will attack and cut superannuation for working people in this country. And their rationale is based on a really big con. They want to pretend now, all of a sudden, after seven years of wage stagnation, wage theft and superannuation theft, that the big justification for cutting workers' super is that they want to see wages growth. They're worried about the trade-off between wages growth and superannuation. Give me a break!
When Tony Abbott froze the superannuation guarantee in 2014, all we got after that was wage stagnation—actually, historically stagnant wages. The idea that the old link between wages and super is somehow still there in perfect nick doesn't bear scrutiny. In recent years, not only have wages stayed where they were after those opposite froze the superannuation guarantee in the past; they have actually gone backwards. The member for Kingsford Smith made that point with characteristic eloquence a moment ago. Wages have gone backwards. Wages have actually never been weaker in growth terms than they are under those opposite. So spare us this rubbish that you're concerned about superannuation because of the trade-off with wages. We know that that is an absolute crock that those opposite keep referring to.
The other obvious attack—and we're seeing this already—on the SG legislated increases is the coming carnage. When it comes to what's happening right now, we've seen it with the early super access regime. As I said at the outset today, APRA has told us that, for the first time in three decades, more money has come out of super than went in. For the first time since the great man Paul Keating, a friend of the member for Chifley's and of mine, legislated compulsory superannuation, more has come out than went in. That's a tragedy. As I said, that's intergenerational carnage. That's a very concerning development. Those opposite think it's a good development.
Early access to super is a diabolical problem. Others have described it as intergenerational theft, and I think that's an appropriate description. It is a diabolical policy that those opposite have inflicted on the Australian people. And we warned them about it. One of the things that I think really shines a light on their motivations here is that, if they genuinely wanted to give people in hardship access to superannuation, they would probably check that the person was in hardship. But, instead of doing that, you can get two lots of $10,000 out of your super without anybody ever checking that you're in hardship. That's why we've seen all of this discretionary spending happen—all the stats out of AlphaBeta and elsewhere about people and what they're spending their money on. In some cases it is gambling and alcohol. In other cases they are just transferring it from their super account to their bank account. There is a lot of discretionary spending going on. Those opposite didn't want anybody to ever check. They never asked the ATO to do even random audits. And that, I think, exposes their motivations here.
That's why more than twice the number of Australians than they thought would access super early are actually accessing super early. That's why something like 600,000 people cleaned out their accounts entirely. If you're a 25-year-old in this country and you take $20,000 out of your super, you could on average be $100,000 worse off in retirement. We knew that there would be a risk that this scheme would be rorted, that there'd be fraud. It gives us no joy to say that we've been right about that. In this scheme there has been widespread rorting, widespread fraud—all kinds of problems that we warned those opposite about. But they proceeded anyway. And that is going to invite all kinds of consequences into the future as well.
At a time like this, when things are as difficult as they are in the economy, when the economy is crying out for investment, when we need to get the show going and get the wheels of industry moving again, we've got this remarkable asset, this incredible advantage, which is that three decades ago we had the foresight, imagination and courage to put in place this system—and again I pay tribute to former Treasurer and Prime Minister Paul Keating—and now $3 trillion of funds are available to invest in Australian jobs and Australian businesses. We have that advantage. We should be working out ways not to diminish super, not to undermine super, but to unleash it for purposes which are good for people and good for their retirement, but also good for investment and getting the place going again.
I mentioned earlier the Retirement Income Review, and I think it's absolutely critical that the report is released sooner rather than later. Sitting on it for more than a month is obviously not acceptable. There is already enough uncertainty in our community, particularly, I think, among older Australians. We want to see that Retirement Income Review report released. And the context for that—it's something that's not that well known in the community yet, but it will be in time—is that there is another first that is approaching: for the first time since the 1990s, as it stands, the government will actually freeze the indexation of the pension next month. Think about that for a moment. Think about all the difficulties, all the uncertainty and all the anxiety that Australians who have contributed so much to this country are going through—and those opposite are content to see the pension frozen in September. Under Labor we saw the biggest-ever increase to the age pension in history. We talk about our proud record on social security. We ask the government why they have, time and time again, tried to cut the pension and various supplements. They say, 'No, it goes up twice a year.' But it's not going up in September, as it stands.
This government is going to freeze the pension when people are doing it really tough. They have tried, time and again, to attack pensions, to increase the pension age to 70 and to do all kinds of things to the supplements. This is in their DNA. The reason it is, and the reason why we've got this ridiculous agenda, this attack on superannuation, is that those opposite can't see past their ideological obsessions to the national economic interest. When they rank their priorities, it's never Australian workers, Australian retirees or pensioners at the top; it's always about their ideological obsessions. We have heard that from one speaker after another on the opposite side of the House. We have heard it on industrial relations. We have heard it on pensions. We have heard it on superannuation. All across the board, they are always trying to tear down Labor legacies rather than build up the country and its people.
The best evidence of these ideological blinkers is that the Prime Minister, when asked about superannuation today, referred to a part of the superannuation system which is actually equally represented by employers and employees; it's a triumph of cooperation in the workforce. He refers to them as 'union funds', and that, I think, is a tell. It gives us a sense of this ideological obsession he has. The idea that some of these funds have Master Builders or the AiG on them, or all these employer groups, equally represented alongside representatives of the workers—that is a good thing. We should be looking for more ways to harness that kind of cooperation. But those opposite refer to them as 'union funds', because they can't see past that ideological obsession.
Those opposite have never believed in super. They have never believed in its vast possibilities to build a decent retirement for ordinary working people and to build a better future for this country. They opposed it, they froze it, they tried to abolish the low-income super contribution and they tried to weaken penalties for employers not paying. Not even a crisis of this magnitude can make a leopard change its spots; they want to use this crisis as an excuse to come after super. If they want a fight on superannuation, they will get one. The narrow proposal in this bill is fine, but what is not fine is to come after super, to destroy the system, to freeze pensions. If they want to do that, they'll have to come through us.
I rise to speak on the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020. I'm going to put a challenge to those opposite that will clearly demonstrate that what we're seeing from them is not anything other than ideology. But before I do I want to make this point: on this side of the chamber, a lot of us feel strongly about the issue of super. A lot of people say: 'Why do you get worked up about it? It's superannuation. It's financial services. Who really cares?' The reason why we feel so strongly about this is that the people we know in our communities, the people we've grown up with, the people from all backgrounds slog hard for most of their lives in their jobs. They work really hard. They work, in many instances, on low and middle incomes. As a nation, we made a deal with them that, when they get old, they're going to do better. They're going to do better than the age pension. They're going to retire in a way that gives them dignity. They're going to look after themselves and do it in a way that they don't have to question where their next meal is going to come from. They're going to do it in a way that they can have something they can give to their grandkids as a present. They've got a bit of income; they can relax after all those years of hard slog. And superannuation does that. What the income from superannuation does for working-class people—low- and middle-income people—in terms of giving them something better than the age pension is something that is absolutely worth fighting for and that we on our side of the fence will fight for every single day of the week. As the shadow Treasurer just indicated, we are absolutely prepared to have that fight, because this is about dignity, not ideology.
It is not, as the other side try to make out, some sort of campaign to protect union bosses on industry super funds, on which, as was rightly pointed out by the shadow Treasurer, business are equally represented. Business and unions sit on super funds, and they are compelled by the law to make the right decisions in the interests of members—not union members or industry association members. The directors of those super funds are bound by law to make the right decisions on investment in that way. Those super funds do the best possible thing to make sure that the returns are healthy and that people, when they retire, are supported well. That's why we feel strongly about it, because it's about dignity.
So here's the challenge if those opposite hate super so much, because it's clear they do. They don't have the guts to come out and say that they hate it and want to end it; they just want to get it cut into small slices, deny it every possible opportunity and make the case as to why super's not working so they can drain confidence in the system. They make those little changes such as, for example, what we've seen in the middle of this crisis with the pandemic, where they just open the doors to super. Six hundred thousand people have drained their accounts dry. Those opposite just do it that way, nice and slow. They don't have the guts to come out and say it. Here's my challenge: if they think they can run it better, they should put $3 trillion on the table, because that's roughly what superannuation funds amount to in this country right now. Are the government going to do that? No. They can't even increase the pension now. They will, for the first time in a quarter of a century, refuse to increase the pension, but they're telling us that superannuation's no good, and they don't have a backup plan.
I'll tell you what I back: I back the common sense of the Australian people, because most people out there get that the Australian population's getting older. We have more grey hairs than not in our community, and we have to find a way, when people retire, to pay for it, because we can't just have people survive on the age pension. There are fewer and fewer taxpayers to pay for pensioners as we get older as a country. How do we know that? The government's own side first found that out when they had their first Intergenerational report under Peter Costello, then Treasurer. They have been saying for ages that we've got to find a way to pay for it. The deal was that we wouldn't rely so much on the age pension but would have a system to pay for people, when they retire, with superannuation. Those opposite tell us they're fiscally responsible. We have a system in place, superannuation, that is supposed to be able to accommodate the ageing nation we have and that can put in place something better than the age pension so that we'll be less reliant on the taxpayer. And what's the main game in town from those opposite? Basically to destroy superannuation. It's not because it's practical or because there's a compelling policy reason; it's all ideology.
They fight it, as I said, in small ways. For example, they're obviously limbering up to deny the increase in superannuation. Someone from their side actually had the guts to step forward and say it. I think these people are gutless. They won't actually front up to the Australian people and say what they really think. Tony Abbott, though, just says it. He says what they're not prepared to. Tony Abbott said:
We have always as a Coalition been against compulsory superannuation increases.
That's Tony Abbott's view. It's what their view is. They're always at it. As the shadow Treasurer rightly points out, you would never have a Minister for Health say, 'I'm not pro hospital or pro health care,' but here we have the responsible minister, Senator Hume, saying, 'I'm not pro increasing the superannuation guarantee and I'm not pro the actual system.' They've basically got the ideologues running the show, including Senator Andrew Bragg, who was an industry lobbyist for superannuation and is going around now just saying the most outrageous things about superannuation.
It is absolutely staggering what we are seeing from those opposite. And the thing is it's not just the backbench; as has been noted, it's straight from the top. I'm sick of seeing claims that the Prime Minister is somehow practical and he's not into ideology. Garbage! This is the absolute proof, exhibit A, if anything, that he has given up on solid policy and fiscal responsibility and that this is all a bit of a rah-rah moment to his backbench. They don't have the guts to step forward and say this is what they're going to do; and, on top of that, they deny Australian industry access to investment.
We used to have to beg the rest of the world to get investment dollars, because we just didn't have enough here. We did not as a nation historically save enough. We never had that. Right now we have one of the largest savings pools on the planet—I think it's No. 4, generally speaking. Again, Senator Bragg, who has gone out and bagged out superannuation funds—those superannuation funds are responsible for some of the biggest investment in venture capital. The VCs know it and they're all nervous about the fact that Senator Bragg, a bloke who is supposedly pro tech, is going around bagging out the superannuation funds that are the only major platform providing investment support to venture capital and technology in this country. That's what led to the revival of venture capital.
Those funds are there to support the growth of industry, strengthen the economy and lead to the creation of jobs, stemming from a superannuation system that can fund that. It earns the returns that can then go and build people's super accounts. In the one system we have something that's good for the economy, provides for growth, supports jobs, ultimately also reduces the impost on the taxpayer and, as I said earlier, delivers one of the most important things: dignity in retirement through a superannuation fund. That's what it delivers more than anything else.
Take into account the fact that we're not getting a pension increase—for the first time in 25 years—and what this coalition have done since 2013 in terms of making it hard for people to even get on the pension and all their reforms to knock part-pensioners off and make life hard for them as well. So there is no increase in the pension, they make it hard for people to get the pension, they deny an increase in the superannuation guarantee and they undermine the superannuation system. It's clear that the only retirees the coalition cares for are the wealthy ones—not the ones on low and middle incomes, not the ones depending on pensions and not the ones depending on a modest superannuation scheme.
If you are able to get a great gig, if you worked a senior role and were able to have a big income, you'll be looked after by the coalition. If you're anyone else outside of that, you're on your own. That's what's so offensive about this attack on superannuation that we're seeing, and the way it denies people the right to aspire to a better life. They say they're all aspiration—except when it comes to the time for paying for it. They say that they want people to do well in their lives, to be able to secure wealth in their lives. And what do they do? In this superannuation system, they undermine that. We are actually pro national wealth. We are actually pro the wealth of the individual through this system. We are pro dignity in retirement. What we are seeing from those opposite is the greatest example of public policy vandalism that you could ever witness—through the course of this pandemic in terms of what they did with the early release scheme. It drained 600,000 accounts. We certainly understand that, from time to time, people will experience hardship. We certainly appreciate that they should have ways to access their super when their backs are absolutely against the wall, and we never deny that. But we do deny the reality that we've seen under this scheme—it wasn't to help people out. It was to fund discretionary spending. It was, in some cases, to fund gambling. It was, in some cases, to pay off a credit card. That's not the deal with superannuation. People may not like that, but they do realise there is a deal in place to support people in their retirement if we have that money put aside wisely.