Thursday, 25 February 2021
Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020; Second Reading
Labor has always served the interests of working Australians and we continue to seek to put people first. There are so many examples of this, one in particular being the establishment of superannuation and the superannuation guarantee under the leadership of former Prime Minister Paul Keating, a measure which helped to ensure that every single Australian, regardless of their place in the workplace, was able to retire with comfort. It's not hyperbole to say that Paul Keating's stewardship of our superannuation program, as Treasurer and then as Prime Minister, will leave a lasting mark on the lives of Australians for generations to come. Thanks to the super guarantee, Australian workers now have retirement savings of close to $3 trillion. For most, they no longer have to fear the uncertainty of retirement or having to rely on the pension; indeed, it is true to say that our system is the envy of the world. Many countries wish that they had set up a superannuation scheme like this country's many years ago.
I, along with my Labor colleagues, support the Treasury Laws Amendment (Reuniting More Superannuation) Bill and that's because we truly understand the value of super and what it means not just for individuals when they retire but also for the broader community. As we know, superannuation funds do a lot more than just manage super funds; they also invest back in our community. On this side of the chamber, we know the importance that super has to retiring workers in retail stores, in factories and building sites. Indeed, in my time before entering this place I saw firsthand the value of this system to Australian workers, especially those workers in retail. The Shop, Distributive and Allied Employees Association, where I worked, continues to remain one of the largest trade unions in Australia, representing workers in not just retail but also fast food and warehousing. The members of the SDA are often low-income earners, with the median weekly earnings of all Australians in 2018 being 34 per cent higher than retail workers. But for many, their retirement will still be reliant on the old-age pension and rent assistance as well as what little super they may have. The decisions made in this place about super have a direct impact not just on their lives but on the lives of their families.
While this bill will very likely prove useful to many Australians in managing multiple superannuation accounts, it is important that we don't forget that right now, in this place and in the other place, the coalition is also trying to undermine the superannuation system, an assault on the retirement security of working families. This is no surprise for some of the strongest opponents to super, and we've had quite a number of contributions in this place this morning as prime examples. Superannuation is a bedrock for many but, unfortunately, among those opposite, with the contributions we heard earlier, there are a number of senators who would like to dismantle the system.
On the surface, perhaps, some of the reforms explored in the draft could be interpreted as being of benefit to workers but when we dig just a little deeper into them, we learn that this is unlikely. In fact, the draft includes measures that directly contradict some of the recommendations and findings of the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. As the SDA noted in their December 2020 submission to the retirement income review, with these measures, the government estimates a typical young Australian entering the workforce in their 20s could be around $87,000 better off at retirement. However, the implementation of this plan as outlined in the exposure draft presents significant barriers to achieving this projected benefit.
For five years now, the coalition has promised and failed to deliver a retirement income covenant that would ensure workers' best financial interests are put first in their retirement. The Treasury Laws Amendment (Reuniting More Superannuation) Bill supports measures that target duplicate superannuation accounts through the ATO. Labor believes that the ATO matching is in the best interests of fund members. We support measures that are in the best interests of working Australians, again, unlike many of those senators opposite.
In submission after submission to the retirement income review, stakeholders have reminded the federal government of the value of our compulsory superannuation system. For example, in a February 2020 paper, Rest Super noted:
The achievements of the compulsory superannuation system, particularly for lower-income Australians, cannot be overstated. Even for members who retire with an account balance lower than retirement adequacy standards, having access to a lump sum or superannuation pension can provide them with valuable security and an ability to plan and manage this stage of their lives. Before compulsory superannuation, these workers typically had no income in retirement beyond the Age Pension.
Surely, we all understand that making people more reliant on the age pension will: (1) cost the taxpayer more in the long run: and (2) leave future older Australians more vulnerable and living in stressful financial circumstances. Surely, it's just common sense that retaining and supporting Australia's compulsory superannuation system should be a goal actively pursued by all sides of politics.
There are some representatives in the federal coalition ranks who seem to believe that owning a home and saving for your retirement are mutually exclusive goals, and I simply do not accept that. We should be aiming, as a nation, to make it possible for working Australians to own their home as well as save for retirement. We can do both and we have shown that. We should do both; not doing both would be absolutely reprehensible.
Owning a home, the Australian dream, is a worthwhile goal. A home provides security, warmth and a place to put down roots. In retirement, having worked for a living and made a contribution to the community in whatever form, Australians should be able to enjoy a comfortable retirement in their home. I'll never accept the view that we should force people to choose between a home and a comfortable retirement, when we in this place have the opportunity to make both possible.
As I've already stated, Labor will support the Treasury Laws Amendment (Reuniting More Superannuation) Bill because Labor supports a stronger superannuation system. Labor has always advocated for a stronger super scheme, and it is worth pointing out that a 12 per cent super rate was always the intention of former Prime Minister Paul Keating in designing the original compulsory superannuation model. In July 1991, as a member of the backbench, Mr Keating gave a speech to the Australian Graduate School of Management at the University of New South Wales. He argued that government should legislate a mandatory 12 percentage point charge to be paid by employers as part of the productivity sharing under the accord wage restraint model and, as he recalled in 2007, this speech remains the key speech in the forward design of the Australian super system. Labor believes moving forward with the already legislated increases to the super guarantee remains key to creating a stronger super system. Australian workers should be getting 12 per cent—in fact, they should be getting 12 per cent now, considering that most of us in this place enjoy the benefit of a 15.4 per cent rate.
Coalition senators, including many still here, voted against the legislation back in 2012. Today, in 2021, Australian workers are only getting 9½ per cent because the government have frozen the increases and, in arguing for the freeze, they told us it would drive wages growth. The proof is in the pudding: even before the COVID-19 pandemic, wages growth had stalled. Not only are Australian workers missing out on the future benefits in retirement that would come to them through increased superannuation; they are also missing out on increased wages, which would have been promised to them by those opposite, due to stubborn low wages growth that the coalition seems entirely disinterested in addressing.
Finally, as I've stated earlier, Labor will support the bill before us. But Labor also supports a much fairer system. Once again, this directly contrasts with the members of the coalition who continue to demonstrate, through their lack of action, that they do not believe in a fairer system. If they wanted a fairer system, we would see new proposals to address the super gender pay gap and reforms to address the fact that females are retiring with significantly less in their accounts. If they wanted a fairer system, we would see proposals to address the enormous difficulties that part-timers, insecure workers and gig economy workers are currently facing in our economy. But we don't see any of that from those opposite. Instead, we see proposals that will grow inequality, that will leave workers worse off. And we see continued attacks on our super system. But there is much more to do. Australians deserve a government that will act in their interests and they deserve a government that is on their side. It's only the Labor Party that will be able to do that.