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Wednesday, 3 September 2014
Page: 6417

Senator GALLACHER (South Australia) (19:01): I too want to make a contribution on the state of the nation, so to speak, in terms of commitments made and not honoured. As an aside to the minerals resource rent tax repeal there were changes to the superannuation industry. I think we need to spell out in this place exactly what those changes will mean. We know from the good folks in the Parliamentary Library that there are 108 corporate entities with about 512,000 accounts and $61.3 billion in superannuation. The average account balance there is $119,700. We know there are 38 public sector funds with some 3.3 million members and $256.9 billion under management, with an average account balance of $77,000. We know through our good friends at the Parliamentary Library—and these are June 2013 figures—that there are 509,362 self-managed super funds. Mr Acting Deputy President Bernardi, you may have one of those yourself. There are a lot of people who do. There is $506 billion under management, with an average account balance of $525,000.

Let us think about who the change from 9.5 per cent to 12 per cent and the delay will really affect. Will it affect in a very punitive way those with $525,000 in their account? Will it affect those corporate people with an average of $120,000 in their account? No. It may well affect those 52 industry entities with some 11,000,524 members and $324.7 billion under investment, with an average account balance of $28,200. Or it may affect those 127 retail funds with 14,395,000 accounts and $422 billion under management, with an average account of $29,400. Quite clearly, those figures do not add up because, as you would be aware from your previous experience, Mr Acting Deputy President Bernardi, there are lots of duplicate accounts, lots of lost accounts and lots of accounts that did not get transferred when people transitioned through the economy.

The Prime Minister of this country said one thing and did completely another thing. The impact will be felt most severely by those part-time workers, by those in low-paid, low-skill jobs and by those in casual employment, who have to have a certain number of hours in a month to even get superannuation. They will be the ones who will be punished with this delay. They are the ones the Labor Party—and we thought the Liberal coalition—were trying to give a leg up to in this economy. I think it was Paul Keating who said: 'Don't worry about privilege, position and power. Don't worry about those folks.' You probably do not need to worry about the self-managed super fund people with $½ million in their account and you may not need to worry too much about the corporate people with $120,000 on average in their account. Those in the public sector are a little bit better off, but not terribly much so.

You do need to worry about the people in the industry and retail funds who have an average account balance of $29,400. Those are the people who make the economy work. They are the nuts and bolts. They are the people who do the jobs that probably nobody else wants. They are in casual employment. They do all of the inconsistent and irregular work that does not have a career path. This delay will put a reasonable go at retirement further away. It will put any prospect of them having a respectable contribution for their retirement much further away.

I was around when industry super funds came into being. As a matter of fact, I can go back to the time when you used to have to wait for an invitation from a superannuation fund. It was for the privileged and positioned. To get into the Commonwealth super scheme in 1976 I was told, 'In about six months, if you're a satisfactory employee, we may give you an invitation.' That is what superannuation used to be.

I was very happy to be part of the campaign for industry super. I was very happy to articulate that you should put three per cent of your wages aside and have it go into industry super, because that is going to set you up for retirement. I know many thousands of workers who now have some semblance of a reasonable retirement, which they never had prior to 1986 or 1987, when a lot of industry super funds started to kick off.

Kelty, Keating and the Hawke government knew this would be a good thing for the country, so they expanded on it. We have always had the challenge: when as a nation will we get people to make the respectable contribution needed over the life of their employment?—indeed, in a lot of cases, it is precarious employment and casual employment.

Women, in particular, are punished by this regime. They are out of the workforce for long periods of time. They do take most of the part-time employment positions. And these are the people this coalition government is reneging on. They are reneging on people who do the hard work in the community, who raise the children and who balance part-time work with duties in the home. These are the ones who will be punished—those 28.2 average account balance. There are a lot of people with very low balances in that equation.

That is what this Prime Minister has done. They can bag it up and say, 'The minerals resource rent tax was not going to do this' and 'It was not going to do that,' or 'We couldn't afford this,' and 'We couldn't afford that.' This is a fundamental position the Australian economy needs: more in retirement savings. It needs to get more in retirement savings not at the big end of town. The self-managed super funds have got an average account balance of $525,000. These people know what they are doing. They have the disposable income to take advantage of the taxation benefits inherent in the superannuation system.

A low-income worker, up until very recently, was able to struggle and save a thousand bucks to put into their super, and have it matched—that was a Howard government initiative. They got it. They got that women were locked out of the workforce for a long period of time, that young people and part-time employees were not able to get the regular income necessary to drive a reasonable retirement income. But what has happened to this government? Once again, they are back to position, power and privilege. Look after the big end of town, and the devil take the hindmost for the rest. It is disgraceful.

We are rightly proud of our superannuation system. It is the envy of the world. To my knowledge, no industry funds have been guilty of any misappropriation or malfeasance. No retail funds have been catastrophic failures. It is a good system. It has good checks and balances. What it needs is for the 9.5 per cent to get to 12 per cent as quickly as possible—not for the big end of town but for those people at the bottom end of the economy who are not earning high wages or who have irregular high hours and overtime.

There are some genuine employers—one is Linfox—who have not waited for the government. They have accelerated to 9.5 in their enterprise agreements. They do not want people working all their lives—and Lindsay Fox is on the record as saying this—and then not be able to afford to retire, and have to drive into their 70s. This is what this change does. It stops people from retiring with dignity. It is wrong, catastrophically so. We really should revisit it. I do hope that we have a policy that resurrects it at the next election.