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Tuesday, 22 November 2011
Page: 13253

Ms ROWLAND (Greenway) (12:49): I come to this debate to proudly support measures which will achieve some of the most fundamental and worthy policy objectives to be brought before this parliament including, firstly, taking the benefits of the mining boom, the ownership of our sovereign assets by each Australian citizen—which can be dug up only once—and sharing that wealth across all our communities. It is a fact that, as I consult with my constituents, there is a clear understanding and desire for these benefits to flow to Blacktown, Pendle Hill and Glenwood, and not merely remain confined to the mansions of Peppermint Grove in Perth. Secondly, these measures will recognise in law the fact that a superannuation guarantee rate of nine per cent is simply not enough for an adequate retirement either today or in the future. Thirdly, they will take action through the proceeds of the minerals rent resource tax to address the historic and perpetuating imbalance between the retirement savings of working women versus men. Whilst women statistically continue to live longer than men, our superannuation balances are in fact on average around 40 per cent lower.

This package of bills has a range of significant benefits including a $6,500 tax cut for 2.7 million small businesses—13,500 of them in my electorate of Greenway alone—and a tax exemption for workers earning less than $37,000, which will allow these workers to receive much needed superannuation to prepare for retirement. Finally, the suite of bills will increase the superannuation guarantee providing working Australians with more superannuation savings than has ever been received by an Australian in the history of our nation.

I will focus on the measures contained in the Superannuation Guarantee (Administration) Amendment Bill because I believe its reforms will confer benefits that will be felt close to home for working Australians. Many of my constituents of my electorate of Greenway—55,100 of them in fact—will benefit from the boost to their superannuation as a result of these measures.

It is instructive to revisit exactly how the superannuation guarantee works and how it will be affected by the reforms before us. Employers currently contribute nine per cent of the salary of their employees to a superannuation fund to be held in trust for the employees until they retire. However, in many cases, the amount of superannuation available to an employee will not be sufficient to provide for a comfortable and dignified retirement. In fact, a recent poll by the Australian Institute of Superannuation Trustees found that only 14 per cent of Australians feel their retirement savings are sufficient to maintain their current standard of life—and they are right. Furthermore, the poll found that 38 per cent of Australians have less than $30,000 in superannuation savings.

These statistics bring into sharp focus issues which are of ever greater importance as more Australians live longer and therefore need a greater retirement income. This government recognises the importance of ensuring all Australians can afford to retire with dignity and has resolved to take steps to ensure this need is fulfilled.

This package of bills will increase the superannuation guarantee from nine per cent to 12 per cent of each employee's salary. This will ensure that a 30-year-old employee today will have an extra $108,000 in retirement, which will mean having an extra $2,900 available to spend annually. This increase is significant; it will go a long way to addressing the shortfall in retirement savings of the Australian public. This increase to the superannuation guarantee rests upon a solid economic foundation, regardless of what we heard from the previous speaker, the member for Bradfield. The design of the increase is to minimise the impact upon employers and will occur in small increments over a seven-year period, which will allow time for employers and the economy to adjust. As Pauline Vamos, the CEO of the Association of Superannuation Funds of Australia, has said:

This is a policy where the long-term benefit is that it becomes self-funding to the Budget.

This is because, far from being akin to a tax, the increase to the superannuation guarantee will help to build our national savings, create consumerism amongst retirees and enhance a multi-trillion dollar investment pool which can be used to fund outcomes, such as infrastructure projects.

This year we celebrate the 20th anniversary of superannuation in Australia, one of the most transformational economic and social reforms in our history. I would like to reiterate some of the salient points I have made on previous occasions in this place regarding the importance of superannuation and lifting the guarantee from nine to 12 per cent. This government, like the Hawke and Keating governments before us, believes in building our capacity for lifetime income security to ensure comfort and financial wellbeing after one's working life, not just during it. Not only has the superannuation guarantee made all workers shareholders in their own destiny; it has improved the economy for generations to come. The more private savings people have to retire on, the less younger workers need to pay in tax to support those retirees. The more of our own money we have in retirement, the less we must rely on the age pension. The more we build our national savings pool, the better the capacity for Australia's investment funds. It is a virtuous and logical cycle. That is why the introduction of the superannuation guarantee was such a visionary and progressive piece of policy, a policy which we are seeking to progress even more by the passage of these bills.

The member for Bradfield has not let us down today: when it comes to superannuation reform, he simply cannot bring himself to do it. I will come back to that in a minute. When it comes to executive salaries, those opposite are very happy to line up on the bosses' side, but they cannot resist true-to-form rants when it comes to working men and women daring to put their money in industry super funds, which are all overseen by a regulator, and regarding the people in these positions as somehow not running these funds in the best interests of members. It is totally false to suggest this. This was a policy born of a cooperation of the union movement, the government and the industry itself and has now progressed to be a multi-trillion dollar industry in this country.

I have raised the issue of superannuation and reform in this parliament on many occasions and I have done so because, as the Assistant Treasurer has so eloquently described it, I believe it is one of the fundamental pillars of Australia's social and economic fabric. Like one of my other great passions, the National Broadband Network, it is a policy area where the government and the opposition are at polar extremes. The people of Australia have a clear choice when it comes to retirement incomes policy: you can be either for it—that is, with us—or against it. Let us remember this: the coalition went to August 2010 election with a so-called plan for real action on superannuation. They were so concerned about superannuation they could only muster up four dot points and less than two pages in their plan for action on this critical area of public policy. When it comes to what they actually stand for today on the proposal in this bill to increase the superannuation guarantee from nine to 12 per cent, they are in complete and embarrassing disarray.

Here are some choice points to illustrate this fact. In June last year, we heard the shadow Treasurer confirm the coalition's opposition to plans to increase the retirement savings from nine to 12 per cent in the guarantee. Their spokesperson, Senator Cormann, bumbled around on the issue for a few months on the superannuation conference circuit, getting bad reviews everywhere he went. Then, on 7 November, the Australian reported 'Coalition feared backlash if it pressed on with policy to rescind super rise'. And Phil Coorey in the Sydney Morning Herald noted:

… the shadow assistant Treasurer … had told a group of superannuation executives a Coalition government would unwind any increases to the superannuation guarantee it inherited.

Senator Cormann confirmed this to the Herald, saying increasing compulsory super would erode people's take-home pay.

What complete nonsense, Madam Deputy Speaker!

On 13 November the Fairfax press ran the headline 'Coalition divisions widen on superannuation'. On 18 November, Money Management reported 'Abbott reiterates opposition to superannuation guarantee rise'. As those opposite were succumbing to economic populism, a leadership group of senior coalition members was established to discuss how best to tackle the economic challenges that our nation faces. It featured the usual suspects, but excluded, of all people, the shadow finance minister, who was replaced by the man who does not know his millions from billions, Senator Barnaby Joyce.

It is clear that this legislation has polarised the coalition and we see today reports that a growing group of those opposite are urging a rethink on rescinding this, because they know that by repealing this reform their budgetary black hole will grow even bigger and they know that the communities they represent are not enjoying the benefits from the resources boom. As reported in the Australian on 7 November, the shadow assistant Treasurer and the shadow finance minister have both argued against matching this government's commitment to lifting the super rate to 12 per cent, because they know that without the MRRT they cannot afford to do it. Irrespective of all this policy bungling by those opposite, let me make it clear: if this reform does not happen now, under this package of bills, it simply will not happen.

It should not be forgotten that 20 years ago the naysayers were loud in opposition to the introduction of the superannuation guarantee and calamity was widely forecasted. However, far from the sky falling in, the resulting pool of super savings has contributed to the explosive growth of the Australian financial services industry, which now accounts for a larger percentage of GDP than the mining sector. It is also widely appreciated that our wealth of superannuation contributions formed the ballast needed to help our nation navigate the recent financial storm by easing liquidity and providing funds for continuing investment. Nevertheless, in a sadly predictable mimicry of 20 years ago, today we have the opposition opposing this increase. This is despite this measure receiving support from about 70 per cent of the Australian population, according to research undertaken by both ASFA and the AIST.

Importantly, this is also despite the measure enjoying a 69 per cent approval rating amongst Liberal and National Party voters, many of whom are, after all, working Australians. I encourage these Liberal and National Party voters to ask the opposition why they would deny them up to $108,000 more upon retirement, and I remind them that, when many people in this place, including the Leader of the Opposition, retire from parliament, they will receive a very generous benefit far in excess of the 12 per cent he is opposing for his own supporters.

That is the nub: what hypocrisy there is from some people in this place who enjoy parliamentary entitlements that far exceed the nine per cent contribution currently enjoyed by most Australians, and how disgraceful that those opposite who were elected to parliament prior to 2004 enjoy defined benefits and notional contributions well in excess of the proposed 12 per cent.

This is a profound and historic measure which I will vote for wholeheartedly. John Brogden, CEO of the Investment and Financial Services Association, aptly described it as 'a once-in-a-generation boost to superannuation in Australia'. Fiona Reynolds, CEO of the AIST, said that the increase is 'long overdue, and will mean the difference between just getting by and enjoying retirement for millions of Australians'. Most importantly, this initiative, as I said, is supported by around 70 per cent of the Australian people, which shows how strongly Australians value their ability to retire comfortably and how important it is that we act now to achieve this.

I want to end by saying how important these reforms are for Australian women. As the Minister for the Status of Women noted last week, a new report has revealed 60 per cent of women are retiring with no superannuation and just over 70 per cent of all single pensioners are female. At a superannuation forum last week, it was noted that the majority of Australian women reaching retirement age have no superannuation savings behind them.

That is why these superannuation reforms have been welcomed in traditional female dominated professions, such as nursing. As the Australian Nursing Federation has noted, these reforms will mean that the superannuation savings of 2.1 million women earning less than $37,000 will be increased by more than $500 million in 2012-13, as a result of the changes to the superannuation guarantee rate. As noted by the ANF assistant federal secretary:

… in Australia's under-resourced aged care sector, women make up more than 90 per cent of the workforce. The increase in superannuation is welcome news, delivering greater financial security for these workers and others across the entire nursing workforce. The ANF, on behalf of our growing membership, commends Minister Shorten on these reforms to the country's superannuation laws.

This package of bills demonstrates the commitment of the government to locking in the gains of the mining boom and ensuring that all Australians receive a share of its rewards. This government recognises that these resources can only be sold once. We understand the importance of sharing these gains fairly, especially with Australians and Australian small businesses doing it tough. Australians can be confident that this government is acting decisively to spread the wealth of the mining boom in order to alleviate the burdens of small businesses and to ensure that every Australian can retire with dignity in the future.