Wednesday, 17 June 2020
Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019; Second Reading
First, I would like to thank those senators who have contributed to this debate today and yesterday. The Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 addresses a long-running issue in the superannuation system and will mean better outcomes for many, many Australians. The Productivity Commission noted that the current system, which restricts choice of fund for some members, can discourage member engagement, and it concluded that this reform was much needed. The Productivity Commission report also highlighted the negative effects that unintentionally holding multiple superannuation accounts were having on millions of Australians, with duplicate fees and insurance premiums. Through its Protecting Your Super package the government took action to address the stock of these duplicate accounts, and this bill is the next step, ensuring that Australians are not forced into having multiple accounts because of their enterprise agreement or a similar determination. The bill will also encourage greater member engagement, promote competition and address situations where a member disagrees with the choice of fund their employer has made for them.
While choice is vital, as Centre Alliance pointed out in its additional comments to the Senate committee on this bill, informed choice is equally as important. Improving members' ability to make informed choices by providing simple and accessible comparison information about superannuation products was a key recommendation of the Productivity Commission landmark report on the superannuation system. While a number of recommendations from that Productivity Commission report have already been addressed, including a retirement income review, the Treasurer is currently considering a more comprehensive response to that Productivity Commission report and will issue that response in due course.
However, the government has committed to changing the way that people are defaulted into superannuation products, including to ensure that members are only defaulted one time. Preventing people from languishing in underperforming funds will underpin any changes that we make to default superannuation. This bill is the first step in providing choice, improving competition and improving outcomes for members, and the bill will commence on 1 July 2020.
I have listened very carefully to all the contributions to this debate, and they have been impassioned and they have been sincere, but, in all honesty, they have largely also been somewhat irrelevant, very ideological and often just plain wrong. I think it's important to acknowledge some of the straw men of this argument. This bill has nothing to do with the early release of super scheme, which is an initiative that was supported by the Labor Party and has been supported now by over two million Australians who have been grateful for the access to their superannuation in this temporary scheme during a period of financial distress. This bill has nothing to do with undermining enterprise bargaining negotiations. Unions can still collectively bargain wages and conditions. They can still name a default fund. This bill doesn't change the default system one iota. For those who don't choose a fund, their employer can still do it for them. This bill has nothing to do with the industry versus retail, versus public, versus corporate, versus self-managed super debate. Indeed, diversity within this sector is fundamental to the premise of this bill. Competition is good; it drives down fees. We want all sectors to thrive. In the same vein, this bill has nothing to do with the debate between defined benefit and defined contribution—again, quite the opposite. We would like to see more people be able to choose the fund that suits them best, including defined benefit schemes. This bill has nothing to do with wage theft, it has nothing to do with super theft, it has nothing to do with the extent of the rollout of Single Touch Payroll—an initiative, I might add, that this government has implemented, and it has been possibly the most effective deterrent to wage and super theft ever initiated by a parliament.
This bill—your super, your choice—has nothing to do with any of those things. If those are the arguments that this Senate is prosecuting here, you have either intentionally or inadvertently misunderstood this bill. It's about a basic and fundamental right, which is choice to do what you want with your own money. In the same way that we don't let our employers choose our bank account or our bank, and we make that choice a condition of employment, so too should we not let our employers choose our super fund. This bill removes the ability of an employment agreement to demand that you contribute to a particular super fund as a condition of that employment. This is even more important in a system where superannuation is compulsory. When the government mandates that nearly one dollar in 10 of your hard-earned wages must be quarantined, and potentially for up to 45 years, surely you should at least have some say as to where that money is invested and what it's invested in. So choice is indeed a logical and necessary corollary of compulsion. In Australia we compel people to vote, but we don't tell them who to vote for or force them to vote for someone that they don't want. Well, in Australia we also compel people to contribute to superannuation to save money for retirement, and, similarly, we shouldn't tell them where to save their money or which fund they should contribute to.
Moreover, the Financial System Inquiry, the Productivity Commission and, indeed, the Fair Work Commission have all made it abundantly clear that denying or even restricting choice has long-term impacts on superannuation savings, and casuals are particularly vulnerable. Hand on heart, despite what you may have heard from those opposite, I am a super believer, and all the things that I have ever said in this chamber, in public and in private attest to this. And to those opposite: you know it. But, if you think that the system we have now is perfect; if you think it's actually serving the workers that you represent as best as it could; if you think that high fees, duplicate accounts, inappropriately applied insurance, unnecessary opacity and complexity and persistently underperforming funds that, without this bill, will have the ability to lock disengaged workers into them for years and years of erosion of their retirement savings are all okay, then are you really doing the right thing by the people you claim to represent? I cannot understand why you are circling the wagons on this issue. Super is good. But it can be so much better.
This bill is not about dismantling super—quite the opposite. 'Your super, your choice' is about building a superannuation system that will serve Australians well for the next 30 years, and surely that is something that we all want. I commend this bill to the Senate.