Tuesday, 25 August 2020
Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019; In Committee
The government will be opposing the amendments on sheet 1000. The government can't support an amendment whereby employees' ability to choose the fund that receives their superannuation contributions will continue to be restricted. Allowing choice to be restricted in circumstances approved by the Fair Work Commission fails to acknowledge that each employee has individual financial circumstances which impact on which superannuation fund is most appropriate for them. The key is that employees should have the power to make this decision—not the employer, not the superannuation industry and not the government. Individuals should not have to bear the consequences of holding multiple accounts, including facing multiple fees and multiple insurance premiums.
We should be clear about what these amendments are actually about. In the committee and previously, the opposition have said that it is about insurance risk. But the ACTU advised my office during just the last sitting period that this reform actually makes very little difference to insurance arrangements. It's really about providing assistance to individual funds, which are, let's face it, now multibillion dollar companies that Labor sees fit to prop up and shield from competition by removing an employee's right to choose their fund. You can't imagine these circumstances in any other part of the financial services industry. Imagine if any other financial services company unaffiliated with the labour movement approached Labor and begged them to be propped up by locking in customers and denying them choice. Imagine if a telecommunications company or an energy company came begging: 'Please prevent a customer from switching to another provider.' They'd be laughed out of the room and rightly pilloried in the media for doing so. The fact that Labor thinks it's okay for superannuation funds to do so, I think, is telling indeed. It speaks volumes about what is wrong with this industry—this complacency and entitlement. Make no mistake, this amendment is all about funds and it's not all about the members.
Furthermore, the operation of this amendment is ambiguous. It's not at all clear whether the choice of fund restrictions would apply to employers with compliance concerns or employers that fail to meet their SG obligations. If they did impose restrictions in these circumstances, the result is that employees would be stripped of their right to choose because of their employer's noncompliance. In other words, Labor's amendment would be punishing employees because their employers had failed to pay their superannuation. In any case, the amendment doesn't address the SG noncompliance. The government take SG obligations very seriously and believe that noncompliance is best dealt with through our targeted reforms to improve the overall integrity of the superannuation guarantee.