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Tuesday, 16 September 2003
Page: 15272

Senator BUCKLAND (3:26 PM) —I rise to take note of answers given in question time today by Senator Coonan, the Minister for Revenue and Assistant Treasurer. The practice of lump sums at retirement needs to be kept in place, but government members tend to have the view that perhaps all of that money should be put into an annuity or some other form of savings to help workers later on. But when you look at low-paid workers there is no benefit for them. For instance, if low-paid workers who are on $20,000 were to invest that amount of money as a pension, they might be able to get $1,200 a year, or $23 a week.

The minister seems to be making high-income earners her priority: those who earn $100,000 or more, those who might be able to live off an annuity and those who do not need to retire debt that they have accumulated during their working life—something that they have a right to do. They have been putting money aside so that when they go into retirement they will be debt free and able to survive the rigours of their later years.

In responding to my question, the minister said a very curious thing. When I asked her about the annuity and the partial or full ban on lump sum superannuation payouts, she said that the government are looking at and considering their position in relation to the committee report, which I thought was a good report overall; it has assisted the debate on superannuation in this country quite considerably. She said that they are reviewing it. The curious thing she said was that the abolition of lump sums—to use my choice of words; preventing people taking part or all of their superannuation as a lump sum—is something to be considered. Those were her words: `something to be considered'. That worries me because it seems that in the overall picture that is what the government are going to be all about—considering ways to prevent the lower paid workers in our community from benefiting from their savings to retire their debt as they go into their years of retirement.

The Labor Party support the choice of taking a lump sum as a pension. But, in our view, there have to be real incentives from the government to allow Australians to make an informed choice about retirement income options. They should not just throw people to the wolves who see a quick buck in selling products to them and investing their money so that they can pick up the fees and charges and do very nicely out of it. Such people are ready to capitalise on those who are not educated in the area of superannuation or in financial matters and who are unable to plan for their later years.

The committee spoke a lot about education, and that is contained in the report. There needs to be very real education programs so people know what they will be doing upon retirement. They need to know that they can securely invest their money, if that is what they want to do, and live off the capital that they have accumulated over their working lives. (Time expired)

Question agreed to.