Senate debates

Tuesday, 26 June 2012


Superannuation Legislation Amendment (Stronger Super) Bill 2012, Superannuation Supervisory Levy Imposition Amendment Bill 2012; Second Reading

12:54 pm

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Hansard source

Thank you, Mr Deputy President. Spurious points of order in order to defend one's lack of credibility does not go a long way! Senator Bilyk is maintaining that she has run her own business and that she has employed people. Well, she neglected to remind herself, then, that the employer is responsible for paying the superannuation of the employees. It is not the government that is responsible, it is not the Minerals Resource Rent Tax that is responsible; it is the employers that are responsible for it. If Senator Bilyk had any idea about running a profitable and effective business, she would know that—but clearly she does not. It just goes to show that what is said by the senators on the other side bears little resemblance to reality. It is taking a departure from common sense. Those people who take risks with their own money to provide jobs for other people should be able to benefit from the rewards of that. That is a principle that is lost entirely on those on the other side.

When those opposite talk about increasing taxes: increasing taxes is just a cover-up for an inefficient and ineffective government. It is a cover-up for a government that has spent too much money, that has mortgaged the future of our children, that has borrowed over $150 billion in four years—which will take decades to pay back. And when the government puts up taxes, it is not supporting the Australian people; it is stifling enterprise, stifling creativity, stifling the spirit of entrepreneurialism that has built this country and hitherto made it such a successful one. But, unfortunately, the Australian people have lost confidence. They have lost the confidence in their ability to back themselves, because they know their government does not back them. Their government is the obstacle to success in this country. This government is an obstacle and a barrier to productivity growth; it is a barrier for the children who have been born and for those yet to be born, because they will unfortunately be lumbered with the legacy of the worst two governments—the Rudd and the Gillard governments—in the history of this country. And that is almost undisputed by the more informed commentators.

Let me return specifically to these bills. The coalition supports these bills. It supports them because we do support more efficient, more transparent and more competitive superannuation in this country. It means that we want consumers to clearly understand what they are entering into in relation to the tax environment and the investment environment that superannuation provides, because it is not an investment in itself—I will come to that in a moment. We want to see consumers' returns maximised through the removal of inefficiencies which, hopefully, will correspond with a reduction not only in the fees charged by the superannuation funds themselves but in the ancillary and compliance costs that are attached. That should form the essence of it.

Unfortunately, superannuation in this country has been tinkered with far too much by successive governments. I regret enormously the dislocation that so many people feel as a result of the current government's tinkering. I think Senator Cormann eloquently discussed the contribution—or lack thereof, I guess—of this government to the superannuation area. If we are a nation that is trying to encourage people to save—and I understand we have over $1 trillion in superannuation at the moment—for the long term and to prepare for their retirements, which I think all people in this chamber would agree is in our national interest and our individual interests, we need to provide the individual with a tax-effective environment in which they can invest, to give them an incentive to save for the longer term; but we need to give them some sort of certainty that the conditions in which they invest today will not be radically changed in the future. Unfortunately, successive governments—but most notably this one—have, I think, tinkered far too much in a negative sense. People say to me quite often, and I hear it in my conversations with many in the industry, that the rules continue to change. These rule changes make it difficult for people to know exactly what circumstances they will face in the future. So we need to provide not only efficiencies and transparencies but certainty in the superannuation environment.

I would like to pick up on another point Senator Cormann made, which is the lowering of the concessional contribution threshold. This is a particular concern—the fact that $25,000 is the most that people can concessionally contribute to superannuation as a result of the regulations passed by this government. I say that because that includes the superannuation contribution guarantee, which of course is being increased over the coming years. The superannuation guarantee is something everyone has. You do not have an option as to whether you partake in it or not; it is actually there. So if you have two or three jobs or if you happen to earn a significant salary you are then going to be penalised concessionally.

I thought we were in the business of providing people with incentives to save for the future, to delay instant gratification in the hope that tomorrow will be better and they will be able to provide for themselves. Certainly on the conservative side of politics we have been seeking for people to undertake self-reliance in that way. And that is the way governments should be functioning too, quite frankly. They should not try the sugar hit and borrow $10 billion or $50 billion one year simply to prop up some extravagant spending patterns in order to delay the day of reckoning, which has to come. The end result of that is what has happened in Europe, where you have successive governments who simply seek to keep the money-go-round going, hoping that ultimately they will not be the one who has to pay the piper. And when it comes to a halt it comes to a grinding halt, and it is a disaster, as we are seeing in Europe now.

Make no mistake. Australia is pursuing a similar path. In four years we have borrowed, as I have said, over $150 billion. We have turned from a $70 billion net asset position, running a $20 billion budget surplus, to a position where we have a $50 billion deficit. The four highest deficits in the history of this country have been run over the last four years. We have an entitlement mentality, which is being fostered by this government, that if you have any sort of pain or duress, 'Don't worry about tomorrow; we'll fix it today.' The problem with that is that I am worried about tomorrow, as many families are worried about tomorrow: what sort of environment are our kids going to be inheriting?

But with those negatives—and unfortunately this government's track record is a very sad tale—we do support these bills. Notwithstanding the fact that we have some concerns and we think they can be improved, we support them because we support, as I mentioned earlier, more efficient, more transparent and more competitive superannuation. We want to minimise costs. We want to see maximum profits and returns for people.

The first bill comprises a number of schedules. Schedule 1 of the Superannuation Legislation Amendment (Stronger Super) Bill 2012 introduces a framework to support the implementation of superannuation data and payment regulations and standards that will apply to specified superannuation transactions undertaken by superannuation entities, retirement saving account providers and employers. In more detail, it enables superannuation data and payment regulations and standards to be made relating to superannuation entities, RSA providers and employers. It provides the Commissioner of Taxation, whom I will refer to as the commissioner, with the ability to issue mandatory superannuation data and payment standards for superannuation entities, RSA providers and employers. It enables superannuation data and payment regulations and standards to deal with payments and information related to superannuation transactions and reports. Finally, it introduces a new penalty framework to ensure that trustees of superannuation entities, RSA providers and employers comply with the superannuation data and payment regulations and standards.

Schedule 2 amends the Australian Prudential Regulation Authority Act 1998 to enable costs associated with the implementation of the SuperStream measures to be included in the determination specifying the amount of the levy that is payable to the Commonwealth. The cognate bill, the Superannuation Supervisory Levy Imposition Amendment Bill 2012, amends the Superannuation Supervisory Levy Imposition Act 1998 to enable the Treasurer to make more than one determination on the imposition of levies for a financial year.

I started by talking about principle. The coalition supports, in principle, any measures that are going to improve efficiency, transparency and competitiveness, whether it be in superannuation or in any other aspect of public spending. But, specifically in regard to superannuation, we want to make the system easier to use for employers. We want to ensure that there are fewer lost accounts, we want to provide a more timely flow of money to super fund members' accounts and we want to deliver savings to employers and to fund members. The benefits of this approach are many and wide. By simply making the system easier for employers, you are going to have employers happier to comply with the sometimes onerous obligations that are attached to maintaining superannuation accounts. Indeed, it may enable employers to provide even greater services to some of their employees, whether through education or through efficiencies being passed on through employer contributions or some sort of in-house incentives as a company becomes more efficient. We want the workers to benefit.

The other thing I mentioned was ensuring that there are fewer lost accounts. This is common sense. We know that, in this modern day, having a single employer or a single job is highly unlikely. We have a very mobile workforce. We have people from all walks of life. When people start work at 14 or 15, they might get their first job in a fast food outlet or something like that and then get into retail and have myriad other jobs and change employers right through their adolescence. Each of their jobs will have a super fund account attached to it, and these accounts can easily get lost in the system. I experienced that both when I participated in the superannuation scheme as a young man and when I was a financial adviser chasing up lost accounts for people. There are, I acknowledge, opportunities for people to chase up their lost super through a number of government schemes, and I would encourage any listeners to this broadcast to consider how they can do so. If you can consolidate your superannuation accounts you get increased efficiencies, and your nest egg can grow a good deal more quickly because the fees are a good deal lower.

I talked previously about the SuperStream proposals: the implementation of changes to data and payment regulations and standards which will allow participants in the super system to communicate by using standardised business terms in a consistent and reliable format. Unless different branches of an organisation—with the modern-day acronyms and jargon they use—can communicate effectively, the organisation is at a decided disadvantage. Electronic transmissions are no different; organisations want to make sure that they have agreed-to transport and security protocols to ensure that data is not only protected but also gets to the other end in the necessary format and by the best method so that it can be applied automatically and processed in a timely manner with many fewer errors. If properly implemented, the SuperStream proposals in these bills would deliver significant efficiency savings to the super industry and employers. I have talked about the benefits there. It has been estimated by the Financial Services Council that the savings would be in the order of $20 billion over 10 years. That is $20 billion, of which a substantial proportion will more than likely be in people's superannuation accounts when they retire—and that will be a win-win for everyone.

Much of the detail of these new data standards will be in regulations, and industry participants consider its presence in regulations appropriate. However, a careful consideration of the impact of the regulations on all stakeholders, including small business employers, is absolutely necessary. Small business is, outside government, the largest employer group in this country. It is where people invest their hopes and their dreams as well as their money, and sometimes it is where they invest their mortgages. They mortgage their homes in order to pursue the dream of a better life for themselves: to make a decent quid and maybe to build a business that they can hand on to their children or sell to fund their retirement. We need to make sure that small businesses are not disadvantaged. I know that there are many different definitions of a small business, but I often reflect on small business as a former small businessman myself. I think that a small business is a business where the owner or the owners and the immediate family—a very small group of people—do everything. They are the payroll officer. They are the compliance officer. They are the occupational health and safety person. They are the person that complies with the superannuation entitlements. It is often said that people in small business spend too much time working in their business rather than working on developing it. The coalition is absolutely committed to enabling people to be able to work on their business by reducing the compliance burdens—the green tape, the red tape and so on—that are really stifling and tying businesspeople and entrepreneurs down because they have to pay for expensive external advisers in order to maintain their compliance rather than be able to maintain their compliance in an economically efficient manner so that they can get on with growing their business and creating jobs. That is one of our concerns, and we believe that it needs to be considered.

There is a significant concern also in the claimed cost of the implementation of the measures proposed in the bills. The government has claimed that the measures will cost $467 million over the next five years, including costs of $121 million in the next financial year. It is proposed that these costs be recovered by a direct levy on all APRA regulated super funds, which means in effect that the burden will be borne by super fund members across Australia through higher fees and administration costs. We are yet to see a full breakdown of estimated expenditure. The government has not, I understand, supplied it, and I think that it needs to so that we can understand exactly where the money will be spent. Also, additional costs will be imposed on super funds and employers to convert to the new system and the new standards.

The coalition celebrate the fact that Australia is going to move to a more efficient and effective system, but we are concerned about the costs that will be applied due to these changes by the government. The costs do not appear to have been fully considered either by the government or in the regulatory impact statement. However, the Financial Services Council estimates that the costs to industry would be in the order of $1 billion—and that is supposed to include the cost-recovery measures in these bills. These cost-recovery measures are the reason that these bills were referred to the Parliamentary Joint Committee on Corporations and Financial Services for an inquiry. That inquiry highlighted significant concerns within the superannuation industry about the transparency and accountability of how government agencies, particularly the Australian Taxation Office, will spend the $467 million in funding which will be provided to them through the additional industry levies. As I said before, these levies will ultimately be paid by super fund members through higher fees.

At the risk of labouring the point, I say that we support and celebrate the increased competitiveness, the efficiencies and the more transparent operation of the superannuation system in these bills. We want to provide more certainty for the Australian people so that they can invest with confidence in their retirement. But we wonder why the government implements changes, the costs of which are expected to impact on industry by up to $1 billion. That is $1 billion that is going to come out of the pockets of Australian taxpayers. We not only are concerned for the future of Australian taxpayers but also know that we need to give them every incentive and encouragement to save for the sake of both themselves and our nation. (Time expired)


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