Peter Whish-Wilson (Tasmania, Australian Greens) | Hansard source

As I was listening to the previous contribution, I realised that this is actually my second speech in a row with a lectern. It suggests the gravity and the importance of the bill before the chamber today, the Treasury Laws Amendment (Putting Members' Interests First) Bill 2019. What a lost opportunity this legislation is. Yet again, with the help of a deal-making crossbench, this government is going to spit out a half-baked, gerried-up piece of law that doesn't fix the problem, that will leave those who can least afford it with less protection and that opens the door for their mates at the big banks.

The current problem is that too many people, especially young people, are paying too much for insurance that they don't need. I think we all agree with that. I don't imagine any senator would disagree with this statement, but this bill does not fix the problem with group insurance provided through default super. Instead, this bill simply replaces this existing problem with another problem. The government's fix will leave other young people who do need insurance without cover. This will have a dramatic effect on people's lives. This will change the course of some young Australians' lives.

Costings by the Greens through the Parliamentary Budget Office indicate that, if passed unamended, this bill would see under-25-year-olds and people with low-account balances missing out on as much $5.8 billion in insurance payouts over 10 years. I accept this assumes no opt-ins, which wouldn't be the case, and this costing doesn't take into account the amendments put forward by the government today; nevertheless, it does give the Senate some sense of the magnitude of what is being decided upon today. To put it another way, this government is meddling with somewhere in the order of $600 million a year worth of payouts to young people on low incomes, who clearly need default insurance, without providing a safety net.

Let's talk about the fallacy of choice. The fundamental problem is that the government's bill relies on members exercising choice, even though the problem it is seeking to fix is a direct result of members not exercising this choice in the past—a conundrum. The vast majority of people do not engage with their super fund, let alone insurance in super. That's why the Howard government established that default funds should include life insurance. Through you, Acting Deputy President Brockman, I say to Senator Bragg, 'The next time you present at a young Liberal meeting, the picture of John Howard on the wall, next to the picture of the Queen, will be frowning on you. This is a legacy of the Howard government that you are trying to remove.' I will just point that out to the chamber.

Unlike the superannuation legislation amendment before us today, the choice of superannuation funds bill 2002 required to provide minimum levels of insurance in respect of death in order to qualify. That's not to say the current system is perfect, far from it. But superannuation is defined by member disengagement, which is why we have default super. And the provision of default insurance through default super should be premised on the reality that most people don't make an active choice about super, let alone insurance through super. This brings me to the key fallacy of the bill, which is to think those young people who do need insurance are likely to make an active decision more than anyone else. Senator McAllister made the point earlier that the majority of us don't necessarily engage with these choices. Indeed, it was one of the key issues raised by the royal commission and in countless inquiries that I've been on in various committees in the Senate. We have a problem with financial literacy in this country. That financial literacy causes motivational issues around people wanting to seek more information. It's a bigger issue that we have to deal with, but it is fundamentally at the heart of the problem with this bill. I invite any senator, any government senator, Senator Lambie, Senator Patrick, to explain how a 23-year-old, who's married with a couple of kids, will in the first instance understand that life insurance is even available for super and, secondly, make a decision to try and opt in to life insurance through their super. On what planet are young people with kids and a mortgage and one or two or three jobs and everything else going on in their lives going to sit down on a Tuesday night and say, 'Do you think we need to opt in to insurance in super?'

It would be nice if we were in a perfect world and could assume that young Australians would do that, but I think we need to have a look at ourselves to understand that that's a very unlikely situation. Indeed, it's bunkum. Yet again it's a neoliberal fallacy of choice: informed consumers participating in an active market—what we economists call perfect information, a highly efficient market. It is anything but that. Indeed, I would say the fallacy is straight from the derriere of a bull. You are a farmer yourself, Acting Deputy President Brockman, but, for those who don't know what the derriere of a bull is: it's the backside of a bull.