Lisa Darmanin (Victoria, Australian Labor Party) Share this | Hansard source

I rise to support the Treasury Laws Amendment (Payday Superannuation) Bill 2025 and the Superannuation Guarantee Charge Amendment Bill 2025 and will attempt to address some of the wild misconceptions we've heard about what this legislation seeks to do. Quite simply, if you earn it, you should be paid it on time, every time. We would not accept regular wages being paid six months after they were earned, and it is about time we start thinking about superannuation in exactly the same way. When superannuation is paid late, workers lose out twice: firstly, because it's their money, and they should have it in their fund on time but, secondly, because delayed contributions mean losing decades of compounding savings that follow. Payday super fixes that. Its effect will be transformative to a dignified retirement.

Unpaid super is no small problem in this country. Across Australia, 3.3 million workers were not paid the super that they earned in the financial year 2022-23. That underpayment—or, let's call it out for what it is, wage theft or super theft, on a grand scale—amounted to $5.7 billion each year or $110 million each and every single week. For the average worker in Australia, that means an unpaid super balance of $1,730, which compounds over time to a shortfall of more than $30,000 at retirement for workers. For Victorian workers alone, unpaid super in the 2022-23 financial year affected 85,000 people, a staggering almost 30 per cent of the workforce. Over the past six years Victorian workers have collectively had $7.3 billion stolen from them in unpaid superannuation. These are not abstract numbers. These are real dollars that could have grown to provide security, independence and dignity in retirement.

At the core of our super system is something every school maths student knows—or they should—the power of compounding interest. This is the quiet engine that turns modest regular contributions into a secure retirement. Every dollar that's paid on time earns returns and returns on those returns year after year. When contributions are delayed, that compounding is disrupted. A worker missing $200 a fortnight doesn't just lose $200. They lose the decades of growth extracted from that $200. So over a 30-year career, those interruptions compound as well. Payday super ensures contributions flow regularly and compound just as the system was designed for, protecting the future income of millions of workers. It also brings super into alignment with modern-day payroll practices. Our current system of quarterly super payments is nothing more than a nasty head-in-a-bucket hangover from the olden days of analogue bookkeeping. This change is bringing workplaces and superannuation into the 21st century. Electronic payroll methods mean that paying super with wages rarely involves any extra work for business. This is contrary to the contribution that we heard earlier from Senator Paterson. This legislation will in fact save businesses the hassle of time-consuming quarterly reconciliations and mitigate the risks of getting stuck with hefty unpaid superannuation liabilities.

Payday super ensures that contributions are paid when wages are, without leaving workers waiting, worrying or chasing their own money. It reflects the way that people work today—whether you work fulltime, part-time, across multiple employers, casual hours or varied income patterns. Our retirement system must keep pace with the workforce that it serves. Most employers, I would say, do the right thing, and they want to do the right thing. They recognise that superannuation is part of remuneration and not an optional extra. But this is too important to put in the hands of employer good will. Good will does not compound at retirement.

For years, unfortunately, we have seen some employers who have treated superannuation as though it was negotiable. They have delayed payments to manage their own cashflow. They have ignored their obligations until regulators, unions or superannuation funds intervene. They have exploited gaps between reporting and enforcement. At the end of that chain is a person, a hard-working person, whose savings are diminished, whose retirement is smaller and whose next life phase is worse off as a result. The cost of these delays is immense. I think it is worth repeating those numbers for each week—a staggering $110 million that workers have earned never reaches their funds. That is 5.7 billion stolen from workers per year. That is the nightmare that we are talking about today and what we are seeking to fix not what some of those opposite would have you believe. This wage theft is unacceptable, and this government will not accept it. To employers who have relied on that delay: those days are over. Workers' superannuation is not a petty cash tin for you to dip into. The law will now catch up with the principle that Australian workers already understood, that superannuation is their money. It belongs to them from the day that it is earned.

The Australian tax office will have greater oversight to identify noncompliance sooner. Information flows will be clearer and more frequent. The ATO will also receive additional resourcing to help it detect underpaid super payments earlier, and the government will set enhanced targets for the ATO for the recovery of payments. Workers will be able to see their contributions arriving when they should, and regulators will be empowered to intervene when issues arise instead of years after returns have disappeared down the drain.

The preventive impact that this has on our social security system is also worth calling out. By reducing the billions of dollars in lost superannuation, we enable the retirement system to function as it was intended and consequently reduce reliance on the age pension and other social supports. Good retirement policy is responsible policy and the retirement system working as it should. When we legislate for timely superannuation payments, we reinforce a culture of compliance across the workforce. Paying super when wages are paid will mean a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be around $6,000 better off at retirement. More frequent super payments will make employers' payroll management smoother, with fewer liabilities building up on their books.

Payday super will also make it easier for workers to keep track of their payments and harder for them to be exploited by disreputable employers. We say to those workers that their entitlements matter and that wage theft and super theft are unacceptable. It was a Labor government that proudly introduced compulsory superannuation, and it was a Labor government that proudly defended it through years and decades of opposition scaremongering. It is, again, a Labor government that strengthens it for the workforce of today and protects it for the retirees of tomorrow. The story of superannuation is a story of Labor governments building systems that endure and reforms that compound, like the savings that this bill seeks to protect. This government has acted decisively. We legislated the objective of superannuation. We lifted the superannuation guarantee to 12 per cent from July 2025. We strengthened performance testing, and we ensured superannuation is paid on government funded paid parental leave.

Payday super is the next critical step. It is the reform that ensures workers are paid on time every time, because a dignified retirement is not a luxury. We know that low-income workers, including young people in casual work, women in low-paid industries and migrant workers, are disproportionately affected by loopholes in the system. They are more likely to be in part-time or casual work, and women, in particular, are more likely to take time away from the workforce to raise families and for caring responsibilities.

Every time super is paid late or not paid at all, it has a profound impact on the end balance of these workers. When they took parental leave and did not earn super for that period of time, that had a profound impact on their balances as well. For this reason, payday super is a gender equality measure. It will narrow the retirement income gap for millions of Australian women. When super is not paid regularly, those compounding gaps widen. Every delayed contribution deepens the gender retirement gap. On average, as we know, women retire with around 25 per cent less superannuation than men. In addition to this, women live longer, on average, by four years, and so their money needs to be stretched further. We know that women over 55 are the fastest-growing cohort experiencing housing insecurity and homelessness. The gender inequality in the superannuation system is linked to two major factors: the gender pay gap and the career interruptions that are caused when women, predominantly, take time out of the workforce to raise children.

Let me turn to the gender pay gap in superannuation. Contributions are a direct percentage of someone's wage, so the gender pay gap is a critical contributor to women's superannuation balances remaining lower than men's. Australia's workforce is one of the most gender segregated in the world. Industries that attract lower wages are dominated by women workers, and it is unfortunately a simple proposition that, when you earn less, the percentage calculation which amounts to your super contribution is also less. The implications for our country are enormous. Over the last seven years, women's superannuation contributions were underpaid by a whopping $10.8 billion. It is staggering that, over the last seven years, Australian women earned but were denied that amount in their retirement savings. I am proud to be part of a government that is actively working to close this gap and to close the retirement gap. Australian women deserve better than insecurity after a lifetime of underpaid and underrecognised labour.