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

by leave—I move the Greens amendments (1) to (19) on sheet 8655:

(1) Schedule 1, item 1, page 3 (line 8), at the end of the heading to section 68AAB, add "in relation to choice products".

(2) Schedule 1, item 1, page 3 (line 11), omit "or MySuper product".

(3) Schedule 1, item 1, page 3 (lines 26 and 27), omit "or MySuper product".

(4) Schedule 1, item 1, page 4 (line 30), omit "or MySuper product".

(5) Schedule 1, item 1, page 4 (line 33), at the end of the heading to section 68AAC, add "in relation to choice products".

(6) Schedule 1, item 1, page 5 (line 1), omit "or MySuper product".

(7) Schedule 1, item 1, page 5 (lines 11 and 12), omit "or MySuper product".

(8) Schedule 1, item 1, page 5 (after line 29), after section 69AAC, insert:

68AACA Benefits providing by taking out insurance—MySuper members with low -balance account or who are under 25 years old

(1) Each trustee of a regulated superannuation fund must ensure that a benefit is not provided by the fund to, or in respect of, a member of the fund under a MySuper product held by the member by taking out or maintaining insurance if:

(a) both of the following apply:

(i) the member has an account balance with the fund that relates to the product that is less than $6,000;

(ii) on or after 1 November 2019, the member has not had an account balance with the fund that relates to the product that was equal to or greater than $6,000; or

(b) the member is under the age of 25 years.

(2) This section does not apply to:

(a) a defined benefit member; or

(b) an ADF Super member (within the meaning of the Australian Defence Force Superannuation Act 2015); or

(c) a person who would be an ADF Super member apart from the fact that the regulated superannuation fund is or was, for the purposes of Part 3A of the Superannuation Guarantee (Administration) Act 1992, a chosen fund for contributions for the person's superannuation by the Commonwealth; or

(d) a member to whom the employer-sponsor contribution exception applies (see section 68AAE).

(3) Nothing in this section affects a right of a member of a regulated superannuation fund if:

(a) the right relates to insurance cover; and

(b) in compliance with this section, an insurance premium in relation to the member for that insurance cover ceases to be paid; and

(c) the right exists because of insurance premiums paid in relation to the member before insurance premiums cease to be paid as mentioned in paragraph (b).

(4) Nothing in this section affects a right of a member of a regulated superannuation fund if:

(a) the right is a right to insurance cover for a fixed term, subject only to the payment of insurance premiums; and

(b) that fixed term begins before the time at which a trustee of the fund is required under subsection (1) to ensure that a benefit is not provided to, or in respect of, the member under a MySuper product held by the member by taking out or maintaining insurance.

(9) Schedule 1, item 2, page 5 (line 32), omit "and 68AAC", substitute "68AAC and 68AACA".

(10) Schedule 1, item 3, page 5 (line 35), omit "and 68AAC", substitute "68AAC and 68AACA".

(11) Schedule 1, item 5, page 6 (line 6), omit "or 68AAC", substitute ", 68AAC or 68AACA".

(12) Schedule 1, page 6 (after line 6), after item 5, insert:

5A After section 68AA

Insert:

68AB Commonwealth to provide permanent incapacity benefit and death benefit to certain MySuper members

(1) This section applies to a member (the applicable member) of a regulated superannuation fund under a MySuper product held by the member if:

  (a) section 68AACA applies in relation to the product; and

     (b) the member does not hold a choice product or another MySuper product with any regulated superannuation fund (including the first-mentioned fund) that provides permanent incapacity benefit and death benefit to the member.

(2) APRA, on behalf of the Commonwealth, must provide permanent incapacity benefit and death benefit to the applicable member in accordance with:

(a) if the member holds a MySuper product with only one regulated superannuation fund—the policy of insurance that fund has taken out for the purposes of section 68AA; or

(b) otherwise—the policy of insurance determined by APRA under subsection (3).

(3) If the applicable member holds a MySuper product with more than one regulated superannuation fund, APRA must determine, from the policies of insurance those funds have taken out for the purposes of section 68AA, the policy the provision of permanent incapacity benefit and death benefit must be in accordance with.

(4) In making a determination for the purposes of subsection (3), APRA must take into account any matters specified in the regulations made for the purposes of this subsection.

(5) The regulations may prescribe circumstances in which APRA is not to provide permanent incapacity benefit and death benefit under this section.

(13) Schedule 1, item 6, page 6 (lines 9 to 16), omit the item, substitute:

6 At the end of paragraph 20QA(1 ) ( a)

Add:

(ix) no benefit that despite section 68AAB of the SIS Act could, because of the application of subsection 68AAB(5) or (6) of that Act, be provided to, or in respect of, the member under the product by taking out or maintaining insurance is provided in that way; and

(x) no benefit that despite section 68AACA of the SIS Act could, because of the application of subsection 68AACA(3) or (4) of that Act, be provided to, or in respect of, the member under the product by taking out or maintaining insurance is provided in that way; and

(14) Schedule 1, item 7, page 6 (lines 17 to 19), omit the item, substitute:

7 Subsection 20QA(3)

Omit "subparagraphs (1) (a) (iv), (v) and (viii)", substitute "subparagraphs (1) (a) (iv), (v), (viii), (ix) and (x)".

(15) Schedule 1, item 8, page 7 (line 9), omit "or MySuper product".

(16) Schedule 1, item 8, page 8 (line 6), omit "or MySuper product".

(17) Schedule 1, item 8, page 8 (line 22), omit "or MySuper product".

(18) Schedule 1, item 9, page 9 (line 11), omit "or MySuper product".

(19) Schedule 1, page 9 (after line 13), after item 9, insert:

9A Application of sections 68AACA and 68AB

(1) Section 68AACA of the Superannuation Industry (Supervision) Act 1993 (the SIS Act), as inserted by item 1 of this Schedule, applies in relation to a benefit provided by a regulated superannuation fund to, or in respect of, a member of the fund under a MySuper product held by the member, if the member becomes such a member on or after 1 February 2020.

(2) Section 68AB of the SIS Act, as inserted by item 5A of this Schedule, applies in relation to a member of a regulated superannuation fund under a MySuper product held by the member to which that section applies if the Consolidated Revenue Fund is appropriated for the purposes of providing permanent incapacity benefit and death benefit to such a member under that section.

I think the Greens have been very clear in this debate yesterday, today and when the legislation was before us in the last parliament. We want to see default insurance maintained for vulnerable cohorts, low-income and younger Australians. We want to see that maintained as opt-out. We don't believe opt-in will work. We believe it will put a cohort of young Australians and low-income Australians at considerable risk. This was set up to be a social safety net, and we believe that the government has an important role to play in ensuring that especially vulnerable Australians are protected.

The Greens have what we believe is a comprehensive fix that is reflected in the amendments before us today. The amendments that have been circulated would quite simply prohibit members who are under 25 and with low-account balances from being provided group insurance through default superannuation funds. Instead, they would provide a pathway or legislation that establishes the government as the shadow provider of insurance for these members by assessing and honouring valid claims under the same terms and conditions as would be the case if these members were defaulted into group insurance. In other words, though I know this may be quite shocking to some senators in the chamber, we would like to nationalise life insurance and TPD as it's set up currently for the excluded cohorts in this bill. This would fix the problem of young people having their balances eroded, which the minister has pointed out today. That was provided for in the Productivity Commission reports, and the minister has also quoted Rice Warner. This would solve that problem. It would ensure that those who most need TPD and life insurance and protection get it. This would ensure that the situation at the moment is maintained: that it's opt out; it's default. If you're unlucky enough to be under 25 or in the low-income category, for example, and you have a fight with cancer, then you're covered. It's just one example that we've given today.

I did talk in some detail about it in my speech on the second reading yesterday, so I won't labour it for too much longer. This could be provided by the government entirely to maintain the social safety net, or it could be provided on a costs basis. There are a number of different models that could be applied to that. I would ask the senators to consider this. It could still be provided under the current payment of premiums, but that would be my least preferred model, because I think it's been established that a number of this vulnerable cohort are being gouged by group insurers. I believe it could be paid for at cost, especially if, as the Greens suggested in the earlier debate this morning, we use the actuarial data and age and income weighted TPD and life insurance in this country, which you would expect would be a reasonable proposition.

If the government provided this at cost—should I also say the shocking words 'not for profit'—if this were provided by the government on a not-for-profit basis or at-cost basis, then of course the premiums for this vulnerable cohort would be a lot lower. I don't have that data. Much as I have amazing staff in my office—I think some of the smartest staff in this building, I would like to boast—we don't have the capabilities to model how much lower that premium might possibly be. But, nevertheless, logic would show that a government administered system—Singapore is an example—would provide much lower-cost TPD and life insurance for vulnerable cohorts. And, as I pointed out to Senator Bragg in here yesterday, you could even have a model where the government might set the parameters and regulate, but it could still be essentially run and outsourced to group insurers and others at cost. You could still get industry involvement, but it still would be a government system. There are a lot of different alternatives to this. We believe it's a neat solution to the problem that we're facing here today. I would recommend the Greens amendments to the Senate.