Thursday, 14 February 2019
Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018; Second Reading
I rise to make a contribution for the Labor Party—the party that believed in superannuation, the party that delivered superannuation for Australia and the only party that continues to prioritise protection of the benefits of superannuation for all Australians.
Labor will support the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018. Labor is the architect of Australia's compulsory superannuation system. The Labor movement created super, and all of the increases in the superannuation guarantee were proposed and legislated by Labor. Labor introduced the low-income superannuation tax offset. Labor set up the Small Business Superannuation Clearing House and SuperStream. Labor created MySuper.
In contrast, for the past five years the Liberal government have done nothing—nothing!—to strengthen our superannuation system. They focused on attacking industry super funds, and more recently, distracted from that purpose, they've decided to attack themselves. They failed the millions of Australians who have been denied their retirement savings. This government have no desire to show up for work; they're a part-time government. They also have no desire to crackdown on unpaid super or dodgy employers. In fact, they want to reward them with an amnesty.
According to the Productivity Commission, in the default market alone about five million members' super accounts and $270 billion in assets are in underperforming funds. One of the biggest factors in underperformance is fees. High fees matter because they reduce members' returns and, ultimately, members' retirement incomes, and that matters to Labor. We know that fees are the biggest drain on long-term net returns across funds. Even a fee of just a small number, when you look at it at face value, of 0.5 percentage points higher, can cost a typical full-time worker up to $100,000 by the time they reach retirement. The Productivity Commission has also found that funds which charge higher fees typically do not deliver better net returns to members over time. Underperforming super funds—high-fee funds with poor returns—are not protecting members' best interests.
The bill before us today implements measures announced in the 2018-19 budget to protect members' superannuation savings from erosion. It does it in a number of ways: firstly, by limiting fees so that low-balance savings can grow and are protected from disproportionately high fees. It also saves erosion of superannuation by banning exit fees to remove a barrier to account consolidation. Further, it ensures that arrangements for insurance in superannuation are appropriate so that members are not paying for insurance cover they don't know about, or premiums that inappropriately erode their retirement savings. And, further, the legislation before us today strengthens the Australian Taxation Office's role in reuniting small, inactive balances to reduce the cost to members and to consolidate the accounts of members that have accrued multiple superannuation accounts.
We support the objective of this bill, which is doing the right thing in principle in that it's seeking to protect members' superannuation savings from erosion by fees and charges, but there are significant gaps in the government's proposal, which Labor will be seeking to address through amendments to the bill. We are deeply concerned about the blunt removal of default insurance for large groups of Australians. In its current form, the bill risks leaving younger members and low-income earners, predominantly women, without adequate insurance cover. Labor is the architect of Australia's compulsory superannuation system. We will always fight to protect it and strengthen it. That is the purpose of the amendments we will move today as this bill moves through the Senate.
We are pleased to see that this bill finally got a listing, even in the extraordinary circumstances of the reordering of business that's occurred here today. We will be supporting this bill and seeking to strengthen it. The Australian Labor Party, who stood up for in the establishment of superannuation and continues to stand up for ordinary hardworking people today, commits to protecting workers' superannuation and reuniting them with their superannuation faster.