Andrew Bragg (NSW, Liberal Party) | Hansard source

If I had a dollar for every time Senator Whish-Wilson says 'gouging' I would be a wealthy man. I'm glad he mentioned the word 'gouging', because gouging is what's been going on in this industry for far too long. The life insurance and superannuation sectors have been getting one of the best deals going in Australia. They have had 25 years of compulsory savings, where they have been able to consistently charge excessive insurance premiums, often for people who don't need insurance. And so the findings of the third parties, the independent people here—the Productivity Commission, the regulators and, frankly, the only groups who aren't conflicted, who are the Grattan Institute and Choice—have all said this rort and this gouging have to stop. That is why our legislation, the Treasury Laws Amendment (Putting Members' Interests First) Bill 2019, makes life insurance in super opt-in for people under the age of 25 or for people with balances under $6,000.

The reason we're doing this is we're on the side of the workers; we're not on the side of the insurance companies. It was illuminating to hear Senator McAllister worry about what's going to happen to the insurance companies. I mean, give me a break! We are absolutely focused on trying to get a better deal for workers because, after all, the Productivity Commission has said that $1.9 billion in excess premiums have been charged in this group insurance. Over the working life for an average worker, that could be $85,000 of lost retirement savings. And, remember, the purpose of this scheme is to provide income in retirement above and beyond the age pension.

We on this side are not in the business of trying to help vested interests. Senator Whish-Wilson's got some conspiracy theories about this. I wish he had expanded further; I would like to hear them. But this legislation clearly empowers people by saying that you either have to opt in or you don't have insurance if you're under the age of 25, or if you have a balance under $6,000. This is a finding of the Productivity Commission. It's been backed in by ASIC, Grattan and the Choice organisation.

This has also been through a thorough consultative process. Senator McAllister mentioned there was a truncated Senate committee process. That's because there has already been a full and detailed Senate committee process, because this has been our policy for a long time. This has been our policy to put workers before insurers and to put workers before profits of large companies, because this compulsory super scheme is about workers; it is not about insurers. And to hear the Labor Party run all these pathetic lines from the financial services industry—I have heard it all before; it's not a pretty story.

We have seen some of these life insurers run around this place with what they call the 'book of death'. The book of death is a dreadful sob story about how people won't have insurance, which, of course, glosses over the fact that in many cases workers' compensation schemes will in fact ensure that people do have coverage. But to put it beyond doubt we are proposing to move amendments which will ensure that emergency services workers do have the existing arrangements in place, as well as workers in high-risk occupations. The proposal is that that will be determined by the trustee, but within a framework. The Labor Party amendments that I think Senator McAllister foreshadowed would basically give a blank cheque to the industry to say, 'You can do whatever you want,' again, putting Dracula in charge of the blood bank.

In summary, we have the weight of opinion of the people who aren't conflicted. Grattan, Choice and the government's independent economics advisor, the Productivity Commission, are all saying that this enormous drain on people's retirement savings has got to stop, and that's why we're moving forward with the legislation. We are also putting additional safeguards in place to put beyond doubt any concerns that may be out there, which, at the end of the day, will put the trustee on the hook for determining whether or not people are in fact in a high-risk occupation.

At the end of the day, people can always choose to opt in. Wherever government can avoid making decisions for people, especially to do with their financial affairs, that is a good thing. The idea that government can, frankly, enforce a set-and-forget mentality is very, very dangerous. We have seen the enormous malfeasance that's happened inside this financial services sector. We really want people to think about their financial goals, their financial future. We want people to be engaged. People should think about the sorts of insurances they want. In most cases, the group insurance in superannuation won't in fact give a family all the coverage they would need in the event of an untimely death or total and permanent disability, which could occur. So, generally speaking, it will be a retail insurance policy that will provide more coverage and more appropriate coverage for each family's needs.

Finally, I just want to commend the assistant minister, Senator Hume, for the exhaustive consultation process. I think there's been a lot of listening done by Senator Hume. I know that there are some very strong advocates. Some of them are not pure of heart; but some are, and so we have, I'm sure, sought to accommodate some of those concerns in these amendments.