Monday, 21 June 2021
Questions without Notice
My question is to Australia's outstanding Minister for Superannuation, Financial Services and the Digital Economy, Senator Hume. Can the minister outline to the Senate what the Morrison government has done to ensure superannuation works harder for all Australians?
I thank Senator Scarr for this very important question. The Australian superannuation system manages over $3 trillion in retirement savings on behalf of 16 million Australians. Australians pay around $30 billion a year in superannuation fees, more than the $27 billion that households spend on energy bills and the $12 billion that they spend on water bills.
Those on this side of the chamber are ensuring that superannuation works harder for all Australians. All of our reforms since coming to government have been putting billions back into the pockets of Australians for their retirement, giving Australians choice, making the superannuation system transparent for the first time, protecting your super, capping fees on low balances, reuniting small and inactive accounts with active ones, putting members' interests first and removing from young people's accounts inappropriate insurances that erode their balances.
Now I'm very proud that we have passed the Your Future, Your Super package—opposed by those opposite—which will create efficiencies, reduce costs and remove duplication in the superannuation system. The package is the Morrison government's next step towards modernising and improving the superannuation system to ensure that it workers harder for all Australians. Treasury estimate that this package will add around $17.9 billion to Australians' superannuation balances over the next decade. It will do so in four ways: when you change job, your superannuation will follow you; a new online super comparison tool, covering performance and fees, will make it easier to find the best super fund for you; there will be clear standards for performance; and the package will clarify that funds have to act in your best financial interest. For too long, some funds have relied on people not knowing what they're up to. With the Morrison government's reforms, they won't be able to get away with the rip-off any longer.
The Treasury estimates that around six million multiple accounts are held by 4.4 million Australians. To address this, from 1 November 2021, when you change jobs your superannuation fund will move with you. If you don't know your superannuation details, your employer will check with the ATO to find your active super account. There will be no more accidentally doubling up on your fees, doubling up on your insurance premiums or losing money to super accounts that you didn't even know existed.
It's important to note that, thanks to the coalition government, you still have choice. You will always have choice. Your super fund will now move with you, but you have the option to change that fund at any time. If your fund is underperforming, you can seek a fund with lower fees. You're able to do this. Your employer can't stop you, and nor will this measure. Treasury estimates that this change will increase superannuation savings by around $2.8 billion over the next decade, which will go straight back into the retirement funds of hardworking Australians.
Super funds have an important job, and that is to grow Australians' retirement savings. All too often, when a fund has underperformed, members either don't find out about it or don't know that the fund is underperforming. These funds have been able to hide behind the skirts of the well-performing funds. In fact, around $100 billion of Australians' money is in underperforming superannuation products and around three million superannuation accounts are in underperforming superannuation products. The Productivity Commission estimates that, once the Your Future, Your Super measures kick in, approximately 25 of the current 80 or so MySuper products will fail the performance test. The Labor Party may have introduced superannuation to Australia, but, by goodness, it's taken a coalition government to make it work in the interests of members, rather than super fund managers.