Mr HATTON (7:06 PM) —I am glad to follow my colleagues in the debate on these two bills—the Superannuation Industry (Supervision) Amendment Bill 2002 and the Superannuation (Financial Assistance Funding) Levy Amendment Bill 2002—which are being dealt with together. One deals with the question of superannuation supervision and the other with the related question of how to actually deal with the problem of financial assistance funding. These have been collated together, and we are dealing with them on that basis.

This legislation has been a long time coming as part of the government's processes regarding superannuation. Under Minister Hockey in October 2001 they put together a superannuation working group which eventually came up with a paper called Options for improving the safety of superannuation. That took them some time, but they have had it for a year or so—maybe a bit less—and this is the first emergence of any of the series of reforms they looked at. We have here two things that they have said need to be done. Essentially, instead of making repeated single iterations of changes with costs potentially borne by a superannuation fund each time a grant for financial assistance is made to that fund because somebody—through theft, fraud or other misadventure—has knocked off some of the money that people have put into it, they can effectively do it in one job lot, which means that there is less financial loss to the fund.

The background paper to this provided by the Parliamentary Library is extremely good. It is not the most direct material to deal with—certainly in terms of the explanations the government has provided. It is somewhat arcane until you work your way through it, start taking a scalpel to it and think about it in a different way. Although itseems arcane, although it seems to be relatively dry economic stuff and although it seems to be dealing with small funds, there is a greater effect. In fact the negative effect of this on small funds is greater because, even though they are trying to address it on an annual basis, they can pay proportionately higher costs.

There is also a series of deeper questions—which our amendments go to—on the safety of super. We live in a changed world. The former member for Blaxland said, quite correctly, `When governments change, the country changes.' The priorities change, the ways in which issues are dealt with change and you get different outcomes as a result of that. I would argue that, over the 13 years in which we were in government, our greatest single accomplishment was the provision of superannuation for almost all Australians. Before we came to government we were faced with a Treasurer who could not cough up the truth—the fact that he had a deficit of $9.6 billion staring him in the face. He had to be dragged, kicking and screaming, from saying that it was about $4 billion or $4.5 billion to saying in the last week of the campaign that it might be a $6 billion deficit. In fact it was a $9.6 billion deficit, just for one year. In today's dollars that is $26 billion to $27 billion—$26 billion to $27 billion of Howard Treasurer debt that I do not think has yet been repaid.

This government is always talking about `Keating government debt', `Hawke-Keating government debt' or `Labor government debt'. In the modern period, from 1951 until recently—the period since I was born—the accounting was such that there were no government surpluses except for the first four surpluses provided by the Hawke-Keating government. Prior to that, all of the conservative governments through all of the Menzian years ran deficits and built up a hell of a lot of debt. But, in terms of how people perceived the small amount of savings they had in their bank accounts, the little bit of money they put away in friendly societies, the little bit extra they might have provided for their children's education and so on, they might have felt a bit safer then than they do now.

We have seen company after company crash and burn in the stock market, as the AMP has—and my colleague the member for Braddon alluded to that situation—and some people are naturally very jittery. In the space of a couple of weeks we have seen one of Australia's biggest companies virtually self-immolate in terms of its stock market rating. That has a big effect on people. If people have a lot of money involved directly in AMP then their savings or their super have just been burnt up during that couple of weeks and they have no recourse. There is no safety for them in these bills either, because it is not a question of fraud or theft or whatever; it is a question of the valuation in the marketplace of how that company is run.

There have also been shocks to the system in relation to insurance companies, HIH being the most singular in the past couple of years. A company people valued, put faith in and trusted—a company that provided insurance across the community and particularly public liability insurance—folded in front of people's eyes. What the royal commission into it has exposed is that that which was trusted and was a cornerstone of the insurance and financial foundations of this country was not worth trusting at all in the first place. It has exposed the manner in which it was run, the way in which people in the company conducted themselves and the frivolous nature in which they simply frittered away vast amounts of money, along with the fact that there was very little care for the shareholders or the people they were dealing with—the personal gratification and advancement of the people who were principals in that company were more important.

It is no wonder, in the face of just those two examples, that people are feeling less safe, certain and sure in regard to the funds they have in a bank, a friendly society or super investments. They might be a bit more concerned about what is happening because we know that in the past couple of years the share market has gone down considerably in a whole range of areas, from tech stocks right through to resource areas, as part of a general downturn in the economy which is continuing worldwide.

We also know that the whole thing has been made a hell of a lot more complicated than it was in the past. Labor came to office in 1983 and embarked on a considerable journey to convince people of the rightness of putting their money into super, to convince people that we needed to change the situation that had existed, where superannuation was only for those who were most privileged, those who worked for companies that had superannuation programs in place in the private sector—and not all companies in the private sector had it, only a certain number, and a good proportion of those had it as a vested superannuation account. Basically it was like a lolly jar. People would put their money aside, the company was supposed to add to that money, but the company could in fact draw on those superannuation moneys and invest them for the company's purposes. It came to pass in a variety of different places that when people came to get their superannuation out there was not much left in the jar because it had been purloined, effectively stolen. But the vesting rules that the member for Bennelong used to have when he was responsible for this area allowed that sort of activity to go on relatively unpunished.

There was this notion that companies should self-manage, that companies should self-provide, that companies should self-regulate and the government should not do much about it. They thought that a conservative government really did not have the responsibility to be broadening this because, apart from local councils and state governments, where they had their own public service arrangements, and the Commonwealth Public Service arrangements for superannuation, the great commonality of Australian workers should not look to the super future but a pension only, and one that was not adjusted to average male earnings or indexed. This mob finally did that when they came to government after 1996. The Australian Labor Party provided 25 per cent of average weekly male earnings on the basis of providing surety and certainty. We did not actually have to legislate it; people could trust us to do it because we said we would, and we did it year after year. In terms of super, the vast bulk of people were not covered. They now are, and they were given cover by Labor.

Today the Prime Minister paraded the government's supposed saintliness in opposition, where if there were good things that were put up by the then Labor government then the opposition supported them and it was not just against things for the sake of being against them. Excuse me? There were issues that had been pursued by the now Prime Minister during his period in here since 1974. He knows he supported a number of things that he did not have the capacity as a Liberal Treasurer to get through Malcolm Fraser's cabinet, and it grieved him that Paul Keating was able to get them through the Hawke-Keating cabinet as Treasurer and bring in a substantial range of reforms in the financial and banking areas and then across the board. Howard actually believed in those things but was not able to punch through and achieve those reforms.

So you would expect he would stand up and say, `I haven't got much of a problem with that.' But he gave another instance in saying that the now government, then opposition, actually accepted the HECS fees. I know what he argued at the time, as I interjected today. The member for Bennelong was all about full fees—that is what he believed in. That is what he really believes in now. He does not believe in HECS at all. He thinks HECS is only partial. This current conservative government believed in the model that they had. They have got a charity based view of medicine, still stuck back in the 19th century, and they have got an education model based on giving a certain proportion of people places in higher education, or technical and further education, which is really beyond their ken totally. But there is a view that the teachers colleges can provide that: you can provide some nursing scholarships, and now we need some specific ones for doctors, but you can save a lot of money by making sure that the costs are commensurately higher.

They have maintained HECS this time even though they do not believe in it, but they interposed about three years ago a differential scale so that in the areas where we most need people to be trained, in mathematics and the sciences, you pay more in HECS if you take on engineering or if you take on a science based degree. One of Australia's fundamental weaknesses is that we do not produce enough scientists and we do not produce enough people who are mathematically trained. When `science met parliament' last year and parliamentarians went to dinner with a group of mathematicians and scientists, it was explained to us that we have a fundamental shortage in trained mathematicians. That is increasing. People are not beating down the doors to go and do pure or applied mathematics. We need to encourage people to do it. But this government says, `You pay a price penalty if you do so.' I do not think that is smart or sensible policy. It is not clever policy; it is a dumb approach to policy. It is a programmatic approach based on an ideological presumption about how it should be formed.

In super we have had another traducing of the situation. I actually should have gone on at some length about the Prime Minister in terms of what he supported and what the government supported when they were in opposition. There is example after example where they did not agree with Labor, where they stopped any form of change in the Senate, but the one great example that we have of the propagandistic nature of this government which has been expressed since 1996 is the farce that the Treasurer went on with today—a farce unexamined by the press gallery, which does not even bother to look at it. They did not look at it then and do not bother to look at it now. The l-a-w stuff raises cackles and hoots of laughter on the government side but it is based on a fundamental falsity. The former Prime Minister and member for Blaxland, Paul Keating, was absolutely right. The l-a-w tax cuts had been written into law by Labor. The first tranche of those tax cuts was given one year before they were originally scheduled to be given. They were given early, so their effect was greater. In the MPI today the member for Fraser pointed out that the value of that first tranche was in fact twice the value of the tax cuts laughably given by the Treasurer on Tuesday night—twice in terms of quantum but in terms of effect very much greater. It was the first tranche of a two-tranche process of giving tax cuts. We had said in giving that first tranche of tax cuts that if we had been elected in 1996 Labor would deliver the second tranche but, because of the economic circumstances we faced, having given the first tranche a year early in order to provide an economic stimulus to the economy to take us out of the period of recession we had entered into, we would delay the second tranche of the tax cuts for one year, balancing out the early payment.

This government came to power utilising the excuse that we said we would commute those tax cuts into superannuation. We know that there is a resistance in the community, as there was from the start, because working people wanted to see the cash that they might expect to get go straight into their pockets. That is what they preferred. Labor spent more than three years convincing people at the workplace to take superannuation rather than to take straight cash in straight increases—because it was necessary for ordinary working people to start preparing and saving for the future, assisted by the government.

In the end we could not get it done on a voluntary basis; we had to actually legislate. So the award superannuation which has now reached nine per cent—which we would have taken to 12 per cent and then to 15 per cent, because that was our goal—was sealed at nine per cent by this conservative government. They could not do anything about that; it was bound to go to nine per cent. But what they did do was take that commuted second tranche of tax cuts that was changed into superannuation and throttle it to death. The certainty that people had about getting that second tranche as super, whether they chose to like it or not, the government throttled to death. And then they argued that it was Labor that did not deliver. It was a conservative government that throttled that program. They have simply been `propagandistic' about this ever since.

And there has been no comment from the media. We just get a crew over on the other side chortling about l-a-w tax cuts and all the rest of it. The superannuation was stolen, thieved and fraudulently dealt with by this government. It is quite right that we should support the measures in this super bill when it comes to fraud, theft and loss. We should also direct our fire at the Treasurer, the Prime Minister and all the members of the government who have fraudulently stolen the superannuation that ordinary people had—that superannuation which was originally tax cuts and was commuted. Time after time they have come in and turned over the realities, but that does not change the fact that they are not committed to superannuation for ordinary people.

If you look at what they have done throughout the whole range of superannuation measures, the killer is superannuation choice. The government have said, `We are providing choice in superannuation.' Why are they saying that? Why do they have about five different propositions that they have put up over time at five different levels? They have done that because they intensely dislike industry superannuation. They do not like unions being involved in it at all. They do not like the fact that you can have a commonality of people who join together in a strong industry fund—with people from the unions and the workplace involved in the overseeing of that.

What is their preferred mode? Their preferred mode is for people to whack their dough in the bank at enormously low returns. That was one of their five models for how you could go about it. That was the reserved deposit scheme they had. That was a pretty dud go, but for them it was, `Well, why worry about it because it's only ordinary working people—the battlers. We'll say that this is choice.' We know that the superannuation industry has had enormous costs imposed on it because the government do not understand this area at all.

These two changes are reforms which are necessary. We will wait to see the rest of the changes that come out of this working group. The reforms have come out so slowly because this is a government that is not committed to superannuation. It is not committed to safety and further provision for ordinary Australian workers. A government that stole the superannuation that was the workers' due—that extra three per cent that should have gone to people—cannot be trusted and needs to be watched. And we are the ones to do it. (Time expired)