Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I seek leave to amend general business motion No. 84 standing in my name relating to the production of a Productivity Commission report on the selection of default superannuation funds and the modern awards by omitting 30 April 2011 in paragraph (c) and substituting 31 May 2011.

Leave granted.

I move the motion as amended:

That the Senate—

(a)

notes that:

(i)

the current process to select default superannuation funds under modern awards is not transparent, not objective or evidence based, not competitive and not subject to systematic review,

(ii)

the top ten most commonly listed default funds under modern awards are all union based industry super funds, with these ten funds listed as default super funds in modern awards 330 times,

(iii)

the Cooper Review into superannuation also confirmed that current default superannuation fund arrangements undermined competition as new employees typically become a member of a default fund, and

(iv)

a competitive, transparent and efficient superannuation industry is critically important to maximise value for all superannuants;

(b)

endorses the Labor Party’s commitment before the 2010 election to instruct the Productivity Commission to design a process for the selection and ongoing review of the superannuation funds to be included in modern awards or enterprise agreements as default funds; and

(c)

orders that there be laid on the table, no later than 31 May 2011, a report by the Productivity Commission on the design of a process for the selection and ongoing review of the superannuation funds to be included in modern awards or enterprise agreements as default funds, with the requirements that:

(i)

the process is to be based on objective criteria and evidence and be subject to systematic review, so that the selection and ongoing review of eligible default funds is transparent and competitive,

(ii)

the process is to help maximise employees’ retirement incomes by ensuring that only those superannuation funds that deliver – and continue to deliver – the best results to their members are able to be included as default fund options in modern awards and enterprise agreements, and

(iii)

in designing the process the Productivity Commission make reference to the existing sophisticated system of superannuation fund ratings which has evolved over the past 20 years and is already used widely by employees, employers and financial planners in making decisions on fund selection.

Question agreed to.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

by leave—I see that Senator Cormann has amended the motion to add one month. I am advised that, given that the Productivity Commissioner’s existing workload, it is not possible for them to complete the new report. I have got 30 April 2011, but I am sure that an additional one month would make very little difference to that position, and it would likewise be the case for the end of May 2011.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

by leave—It has been pre-election policy from the Labor Party to ensure that there is a competitive, objective, transparent process to select the default superannuation funds under modern awards. For the last two years, default superannuation funds under modern awards have been identified by the Australian Industrial Relations Commission, first, and then Fair Work Australia, without following an objective, transparent, competitive process. The result is that there is a closed shop, anticompetitive arrangement which is not in the best interest of employees and superannuants across Australia. It is not giving them the best possible value in terms of their retirement incomes.

It is absolutely time to act. The opposition advised the government two years ago that this would be a problem, and it has become a problem. There is a closed shop, a captive market, which this government is protecting especially for union superannuation funds. Minister Shorten is very reluctant to act on this pre-election commitment of the Labor Party. He wants to protect for as long as possible the closed shop, anticompetitive arrangement that currently exists. That is why he does not want to act on this Labor Party pre-election commitment until 30 June 2013.

Mr Deputy President Ferguson, it is very important that this process gets underway as quickly as possible. It is very important for the Productivity Commission to do this work. Much of this information is already available through the superannuation ratings agencies like Morningstar, Chant West and Standard & Poor’s. This is a comparatively easy piece of work to do. It is important for the minister to start acting in the public interest on these sorts of issues rather than letting his union bias get in the way.

Question agreed to.