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

Former senator Bilyk has left the chamber now, but I too wanted to associate myself with the beautiful words of Senator Carol Brown earlier in this session regarding Senator Bilyk's contribution and place on record my thanks to Senator Bilyk for her support and friendship in the 12 months since I started in this place, and also for her friendship and support prior to that when we worked together as proud members of the Australian Services Union.

I rise today, though, to also highlight the importance of the Albanese government's commitment to ensuring Australians receive the full amount of superannuation that they are rightfully owed to ensure a dignified and secure retirement. From 1 July 2026 compulsory super must be paid on the same day as wages being paid, known as payday super. This might seem like a really small change, but the positive impact that payday super will have on the retirement income of millions of Australians cannot be understated.

You don't need a background in superannuation policy to understand the benefits of paying super on payday. Really simply, it means more money with more compound interest being accumulated in your account sooner. Modelling commissioned by Industry Super Australia shows that a 30-year-old on an average salary will be $8,000 better off when they retire when their super is paid fortnightly instead of quarterly. The increase in compound interest would benefit at least an additional 27 per cent of all employees. That is a significant number. But no doubt the biggest impact that payday super will have is on the scourge of underpayment of superannuation—and it is a scourge. Whilst most employers do play by the rules, the Australian Taxation Office estimates that in 2019-20 employees were owed but not paid $3.4 billion worth of superannuation. That is $3.4 billion that didn't make it into the pockets of Australians to grow their retirement savings but was owed to them.

Paying super on payday will also address many of the causes of unpaid super. It will streamline the processes for businesses, reducing the likelihood of error and minimising the administrative burden. It will also make super contributions, or lack thereof, much more visible to employees, and this is important. We know that workers who are paid superannuation quarterly are less likely to notice that they have been underpaid, and it makes sense—life gets busy. I challenge everyone who might be listening today to think about the last time that you checked your contributions on your statement.

While we often talk about the gender pay gap, much less is made of the gender super gap, but this is just as troubling. Currently women retire with a third less super than men. Simply because women have less super, it is women who are disadvantaged the most from unpaid and delayed super payments. Over the last seven years women have been underpaid a whopping $10.8 billion of superannuation. I want to repeat that figure: $10.8 billion. It is staggering that over the last seven years Australian women earned but were denied retirement savings.

It probably doesn't come as a surprise that the picture is worse for women who are both young and on lower incomes. In 2019-20, 41 per cent of all young women who earned less than $25,000 a year were underpaid superannuation. Payday super will help rectify this gross gender super imbalance. It is a simple reform that will have an immediate effect. With employers no longer being able to hide their underpayments using infrequency as a deflection, better compliance could see as much as an additional $300 million in super contributions to women over the next four years.

Our current system of quarterly super payments is nothing more than a hangover from the olden days of analog 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 businesses. In fact, it will save businesses the hassle of the time-consuming quarterly reconciliations and mitigate the risks of getting stuck with hefty unpaid super liabilities. It is a win that should be celebrated, and I'm proud to be a part of a government that is delivering Australians a more dignified retirement.