Mr BEVIS (10:36 AM) —The Workplace Relations and Other Legislation Amendment (Superannuation) Bill 1998 has been introduced by the government under the guise that it pretends that it simply removes some administrative red tape from the operation of superannuation. In fact, this bill goes well beyond the question of administrative difficulties and goes to the very heart of the operation of superannuation for many millions of Australian workers.

The bill has four effects. Firstly, it removes superannuation as an allowable matter from federal awards under section 89A(2) of the Workplace Relations Act. Secondly, it prevents the Australian Industrial Relations Commission from arbitrating any disputes about superannuation and precludes the commission from making any exceptional award orders pertaining to superannuation.

Thirdly, it includes transitional provisions which will mean that the existing superannuation provisions that are in awards that Australian workers currently have as entitlements will cease to operate after a six-month transitional period. The commission will then be required by this legislation to remove all of those superannuation provisions from those awards.

Finally, the bill amends the Superannuation Guarantee (Administration) Act 1992 to enable the notional earnings base that exists under the current award arrangements, even though those current award arrangements are to be removed, to be used in determining the obligation of employers for the level of contributions under that act.

This bill has absolutely no redeeming features—none whatsoever and the Labor Party will oppose it. It is an indication of the nature of this bill that there is but one member of the government willing to speak in support of it.

Let me turn briefly to a quick examination of how we got to this point in the development of superannuation in Australia. Prior to 1986 there was something in the order of 30 per cent of Australians who had any superannuation entitlement whatsoever. That 30 per cent was made up nearly exclusively of business executives and public servants. Prior to 1986 it was extremely rare for an ordinary wages employee in the private sector to have access to any superannuation whatsoever. That presented both a major difficulty for the nation in terms of its national savings and a dilemma for people in the work force who had no security of income in their retirement years.

In 1986 an understanding was reached by the trade union movement and the government—and by most people in the community—that, with an ageing skew in the population which would result in a dramatic increase in both the number of people of retirement age and the percentage of the population of retirement age in about 2020 to 2025, some thing needed to be done. The groups within our community that sought to rectify that problem were the then Labor government and the trade union movement of this country. So in 1986 we saw for the first time on a widespread basis federal awards including superannuation as a result of the national wage case of that year. That was a decision to substitute a payment for superannuation in lieu of a productivity wage increase which would have otherwise been paid.

That saw the number of people in Australia who had access to superannuation just about double—it went from about 30 per cent to about 60 per cent of the population. That was still too low to address the critical problem that this nation confronted. As a result of that the Labor government in 1992 enacted the Superannuation Guarantee Act that required employers to make payments for superannuation for those employees whose wages exceeded $450 per month. That has seen superannuation cover rise to in excess of 90 per cent of the Australian population. It is from every standpoint good public policy that that should be so, and it is a matter of some disgrace that this Liberal government has decided in this bill to attack the very heart of that system and to punish those people who at the outset—in 1986—were the ones who made the sacrifice to establish that superannuation growth.

It is important to appreciate that, if this bill is passed through the parliament, there will be significant loss suffered by many Australian workers whose superannuation entitlements are either wholly or in part through their federal award. In some cases the award provisions differ quite substantially from the legislative provisions that they would be left with. They differ in relation to the choice of funds. Importantly, they differ in relation to the threshold, that is, how much money you have to earn each month before you are entitled to have superannuation. They differ in relation to qualifying periods for the entitlement. The membership requirements are different in many cases and the payment intervals—the time at which your contribution to superannuation is made—differ between many federal awards and the provisions contained in the act.

These differences did not come about by chance. These differences came about by conscious discussion and negotiation between unions and employers, industry by industry, enterprise by enterprise. In those awards and agreements they struck conditions that suited their purposes, which they believed were fair and reasonable—conditions which this bill and this government will strip from those people.

In 1996 when the Liberal government was first elected, they introduced their workplace relations bill. At that time the government sought to remove superannuation as an allowable matter. They did not succeed because they could not convince the Senate that workers should be denied their entitlements to superannuation. You will recall that there was an agreement reached with the Democrats that saw an amended version of the 1996 government bill finally passed. That agreement with the Democrats included specific reference to the operation of superannuation. It extended the scope of allowable matters to include superannuation on the basis that it would be removed when it was superseded by legislation, provided that:

The legislation must ensure that workers are not made worse off as a result of any overriding or repeal of award superannuation clauses.

That is from the agreement and the letters exchanged in October 1996 between the minister and the Democrats.

In December the following year, 1997, Minister Reith introduced a bill that was very similar to the bill that is currently before the House. That bill went through the House on the numbers—the government pushed it through this place. It was then considered by the Senate Select Committee on Superannuation and, as a result of the Senate's own deliberations, rejected on the basis that it did not meet the test that I just outlined was agreed to with the Democrats. It still does not meet that test. This bill will ensure that many Australian workers suffer a reduction in their superannuation entitlements. Let us look at a couple of those examples. I mentioned that the legislative requirement is $450 per month before you have an entitlement to superannuation. This is going to affect many members in the work force.

In the Senate hearings last year, the Association of Superannuation Funds of Australia gave a submission in which they acknowledged that this would affect the most disadvantaged and vulnerable members of our work force—the low paid, the women, the migrant employees, the low skill based people, those with minimal education, those who are in casual, part-time or itinerant work—the very people who require the support of superannuation most in our society are going to be denied access to it by this government. Even the department's own evidence to that Senate inquiry demonstrates the narrow-minded harshness of this government in pursuing this legislation.

The Assistant Secretary for Labour Relations Policy in the department of workplace relations gave evidence in May last year to the Senate when they were looking at the number of awards that would be affected by this. He conceded, under questioning before the Senate inquiry, that the number of persons employed under these awards was, by his definition, significant. The department's own advice to the Senate says there are a significant number of Australians who will be worse off under this, and yet this minister justifies it in his second reading speech and elsewhere by saying it is but an administrative change. He says they are removing `the burden of complying with an extra set of obligations.' But what about the burden to the low paid? The minister makes no comment about that, and this government glosses over it. For them, this is just relieving a bit of paperwork on behalf of the bosses and if that means that some millions of Australian workers have their superannuation benefits cut then that is of no consequence. I can tell you that it is of concern to the Labor Party and we will be doing what we can in this place to defeat it.

The entitlements of these workers are considered by this government as—I again quote the minister—`nothing more than adding to the complexity of superannuation administration.' I will say something about the complexity of superannuation administra tion shortly, when we get to the actual operation of the legislation.

Let us have a look at what the government's own senators had to say about that. When this was reviewed in the Senate, even the Liberal and National Party senators could not escape the facts. In their report of the Senate select committee in May of last year they said that the amendments `may disadvantage some people who currently enjoy greater benefits of superannuation by virtue of some awards'. The senators considered that the `contributions involved are small . . . (but) at the low income levels in question the amounts forgone may still be considered significant.' They were dead right.

The minister for workplace relations may not understand this. This is the fellow who thinks it is all right to pick up the phone, ring up his Liberal mates, and get a $45,000 discount on his penthouse in Melbourne. It is easy to go and do that, very easy to get a $45,000 discount on your penthouse from your Liberal mates in Melbourne but, when it comes to the superannuation entitlements of workers, those entitlements should be dispensed with as nothing more than adding to the complexity. Thankfully, the Liberal senators in the inquiry looking at this last year had the decency to acknowledge that for those people affected this amounts to a significant impost.

The Adelaide Advertiser last year ran in article in relation to this in which they made an estimate of the impact this would have in South Australia. I quote from it:

More than 50,000 South Australians could lose a total of $50 million in superannuation entitlements under federal legislation being considered by Parliament this week.

The reason for that is that those people who have a three per cent superannuation entitlement in their award from the early 1986 to 1990 period, those people who traded off some of their wages for superannuation, are about to lose that three per cent entitlement.

I happen to know a little about that, because I was a union official at the time, and I was one of those people who went to members of my union, the teachers union in Queensland. Like any other group of people they wanted a wage increase. We had a national wage case, and we were arguing for three per cent. I had to convince those workers, those members of my union, that they should not get three per cent in their hand, that the better thing for them and for our nation was to defer that and put it into superannuation. I well recall going to many meetings—and they were not all universally pleased with the proposition we were putting—to put the case that they should give up their three per cent wage increase and put it into a superannuation fund for their future and for the nation's savings. At the end of those discussions, overwhelmingly they endorsed it. The truth is that at that time it was only the trade union movement and the Labor Party that understood the problem and were willing to do something about it. Those people I spoke to who in good faith gave up a wage increase are now going to have that taken from them by this government in this piece of legislation, because this piece of legislation will require the commission to remove all of those award clauses. They will no longer have an entitlement to that three per cent. And the government says, `Oh well, they can renegotiate it if they want. They can put it into an AWA or into some other form of contract.' That is cold comfort for those people. And why should they have to? They have negotiated this in the past. They have given up their three per cent pay rise for that superannuation. Why should they have to negotiate it again? And if the whole purpose of this is to streamline things, to reduce the red tape, to reduce the paperwork, to reduce the burden on employers, what are those employers going to think about going through another round of negotiations to put things back in that they settled 10 years ago? That is the effect of this bill.

Let us look at a couple of specific awards where people are going to be worse off. Let us take people who are casual employees currently employed under the vehicle industry repair services and retail award. At the moment they are entitled to superannuation if they earn more than $200 per month. If this legislation is passed, they will no longer have that right. If this legislation is passed, all of those people who earn between $200 a month and $450 a month will lose their right to any superannuation at all. What is the sense of that? How does that improve the national savings? How does that improve their security for themselves and their family in later life? The inescapable conclusion is that it does neither. So you ask yourself why a government would move in this direction. Frankly, the only answer I come to is that this minister and this government are so mean-spirited and so vengeful in their approach to unions and those things associated with unions that they are blind in their pursuit of it.

Another example is the Hospitality Industry Award. At the moment, if you earn $450 a month or more you are entitled to superannuation. You will not be if the Minister for Workplace Relations and Small Business, Mr Reith, and this government have their way. If Mr Reith has his way, those workers will lose their superannuation cover. Many awards provide for superannuation contributions to be made for workers who are absent from work due to work related illness or injury and things of that kind—make-up pay occurs under those awards. Make-up pay is where the employer makes up the difference between the compensation an employee receives when they are away ill and their normal rates of pay. Those people are going to find themselves worse off because they will not be protected by this legislation; they will lose superannuation cover in that circumstance.

Similarly, a part-time employee under 18 can at the moment qualify for superannuation in many awards, but this bill will deny them that. It will take money away from those people as well. For people over 70, in many awards that is now not a bar to contributing to superannuation, but it is under the bill. People over 70 who have employment under an award will also lose their entitlement. So there is a range of people, but most notably those who contributed first to superannuation, those who contributed through wage sacrifice—that was their money, their wage increase—will lose that three per cent if this government has its way.

No doubt some people in the government ranks and amongst employers will say, `That's no problem, we'll look after them— trust me, I'm Peter Reith, I'm from the government, and I'm here to help you.' The workers of Australia do not take to that too well—and nor should they. The simple fact of life is that there has already been public comment about employers trying to manipulate their employment arrangements to avoid contributions to superannuation. An interesting article in the Australian Financial Review of 5 May last year dealt with this point. Quoting a restaurateur, it said:

She said one restaurant owner was thinking of compensating for the wage rise by avoiding the superannuation levy. If he doubles the number of casual employees, then halves their hours, they would not be eligible for it.

Employers are already out there trying to contrive circumstances to get out from under their normal responsible obligations to their workers. That is unfortunately too common. The minister for workplace relations and this government want to extend the loophole. They want to make the loophole bigger so you can drive your semitrailer through it.

Let me turn to some of the specifics. Firstly, on the frequency of payments, if this bill goes through people will have their contributions paid on an annual basis. That has a number of effects on the contributions. Most workers now have their superannuation payments made as they are paid—if you are paid fortnightly your super goes in fortnightly, and if you are paid monthly it goes in monthly. If this bill is carried, many workers will find themselves shifted from that to annual payments.

The Institute of Actuaries Australia has given evidence that, if you make a change from a monthly contribution to an annual contribution, you lose between 3½ per cent and four per cent of your benefit just by making that one change. That is not my guess—that is the assessment of the Institute of Actuaries. People in Australia know that. The banks run ads every second week to encourage people to pay their home mortgage off fortnightly rather than monthly for exactly the opposite effect. The simple arithmetic conclusion is that, when they make the change from monthly to yearly contributions, those workers will lose about 3½ per cent to four per cent of their superannuation entitle ment. This does nothing to assist their security. This does nothing to assist national savings.

Most superannuation schemes for workers include insurance cover for death and disability. For many workers, this is the only cover they have for death and disability outside any statutory right they may have through workers compensation. If they are injured at work—or worse, permanently disabled or killed—at least they have the knowledge that their family will have some cover through superannuation. If the payments are going to be made annually, what does that mean for people in their first year of employment? For the first year of employment they will have no such cover, and for many workers that is their only cover.

An interesting comment was made by the Association of Superannuation Funds Australia in its submission to the Senate committee last year. It said:

For those employees in the manufacturing, textile, clothing, footwear and hospitality industries, where workplace death and accident rates are high in comparison to other industries, insurance cover is essential. The financial burden of those without insurance will inevitably fall to other family members or social services.

That is what will happen. For those people who are denied death and disability cover as a result of this legislation, the costs will come back to their family and to the public purse. That is a pretty dumb approach to national savings and personal security.

However, there is an even more alarming aspect of this. What happens with annual payments of superannuation if your company goes broke? There are too many examples of firms that have gone broke and have denied their employees their normal entitlements. Let me list some that have been in the headlines of late. At Cobar, 270 workers lost $6 million in entitlements. At Woodlawn, 160 workers lost $6 million. At Grafton, 250 meatworkers lost $3 million. At Rockhampton and Yeppoon, where a private hospital service went broke, 157 workers lost $1½ million, and when Sizzlers restaurants went broke 2,000 workers lost $2 million.

If you shift from the current award basis to the legislative framework that this government intends, when companies go to the wall there will not be a superannuation fund for workers. Many of them struggled to get their pay and long service leave entitlements, but at least their superannuation was intact if the company had been doing the lawful thing. This government will make it quite okay for that company to use the workers' superannuation all year long as part of their cash flow and then, hopefully, at the end of the year they will put that superannuation into the employees' accounts. But if the company goes belly up before they get there, if the company goes broke—as those I have mentioned did—then those workers will lose their superannuation as well. Even the government members in the Senate understood this problem. They said in their report:

Government Senators consider there is also a case for requiring SG payments to be made quarterly.

Quarterly is better than annually, but it is still not as good as monthly. At least the Liberal and National Party people in the Senate were decent enough to acknowledge the problem. This minister is not.

The bill also removes from the Industrial Relations Commission the power to settle any disputes at all about superannuation. If the government pretends that superannuation will cease to be an industrial matter, they are kidding themselves. It will continue to be an industrial matter and, from time to time, there will continue to be disagreements between employers and unions about it.

The Chamber of Commerce understood that. They said to the Senate inquiry:

There has been a history of disputes in relation to superannuation between employers and employees.

The ACTU identified some industries in which, they said, if this were to be done, there would no doubt be a resurgence of industrial activity.

Against that background, the government's own senators expressed their concern. They said they were—

. . . concerned that there will be no effective dispute resolution mechanism available to employees in respect of disputes with employers about superannuation.

Again, the Liberal and National party senators understood the problem. A public report said, `Listen, you should do something about this.' But what does Mr Reith—the Minister for Employment, Workplace Relations and Small Business—do? He ignores it and presses ahead with his dogmatic, divisive and biased approach to workplace relations.

That brings me to another matter—the red tape. Let us have a look at what will happens with red tape, because this is the basis of the government's argument—`This is why we have got to get rid of these things. Don't worry about the workers' entitlements; just make it a bit easier on the paperwork.' So what does it do to the paperwork? For a start it does nothing for state awards; those people who have superannuation entitlements under state awards will continue to have them.

I have to say there is a little bit of confusion about the entitlements of people under state awards as opposed to federal awards. The jurisdictional argument presents problems for all sorts of people. The Chamber of Commerce and Industry told the Senate that it—

could be confusing for employees working more than one job under both state and federal awards.

I pose this question: what about the employer who has some workers under state awards and some under federal awards? That will require a little bit of paperwork in the office to sort out. If they think that is not a problem, then I challenge the minister and his department, because they do not understand the difference.

A couple of weeks ago there was an inquiry in the Senate into unfair dismissals. The minister and the department broke with convention and thought they would bring along a couple of small business people as government representatives to talk to the Senate inquiry. So they trotted along two people to give evidence, and, wouldn't you know it, one of the two they brought along was actually affected by state jurisdiction, not Commonwealth jurisdiction. Even the department and the minister could not get it right. They could not even pick out two small business people affected by federal acts. They goofed and got someone affected by state legislation.

If you think this will reduce paperwork, I can tell you it will not. It is going to add to the confusion; it is going to add to the complexity.

Again on red tape, because it was such a big issue for the government, major employer groups were asked to give evidence on it to the Senate inquiry. The Business Council of Australia, the Victorian Employers Chamber of Commerce and Industry and the Metal Trades Industry Association all were asked to tell the Senate inquiry, `What do you think about red tape?' Every single one of them declined to even express a view. It is such a major worry to the business community that, when asked to give evidence, they did not.

This has been a smokescreen produced by this government to try to divert attention from the real effect of this legislation. The real effect of this legislation will be to reduce the superannuation entitlements of millions of Australian workers and, in a most disgraceful way, to punish most severely the unionised section of our society who were the first people in this nation to move to get superannuation and who gave up a wage increase in order to get it. Were I one of the people I spoke to who had been at the meetings, frankly, I would be ringing up that union official and saying, `Hey, you said we were giving up a three per cent wage increase to put it into our superannuation. Now that the government has taken the superannuation off me, I want my three per cent wage increase back, thank you very much.' And they would be entitled to it.

I wonder what the minister would say if they put in for a three per cent wage increase because he is taking the superannuation off them? I know what he would say. He is down in the commission now arguing against a minimum wage increase—that is, he is saying that $20,000 a year is too much to pay someone as the lowest income in our country. It is only half what he can get as a discount on his unit in Melbourne, but it is too much to pay someone to live on for a year. The simple fact of life is that the red tape under this proposal will increase, not decrease.

The government wants employers in this scenario to have their cake and eat it too. I said at the outset that, although they are removing award provisions for superannuation, they are going to keep one aspect, and one aspect only, which is the calculation of what are ordinary time earnings. Effectively what the government is going to do is allow employers not to have to pay award superannuation but to still use an award definition of `ordinary time' which will amount to less than what many workers will otherwise get as the calculation of their weekly wage.

So it is all right for workers to be worse off, but not for employers. How is that fair? What it does is confirm for me the comments that the minister made last year at a business lunch in Perth when he said:

We're on the side of making profits. We're on the side of people owning private capital.

The minister certainly belled the cat with that comment. That is exactly where he is. He is on the side of making profits and does not seem to care about the impact on ordinary workers.

Mr Deputy Speaker, time is just about out. I simply conclude by saying that this is a bad piece of legislation which deserves the condemnation of—not just defeat by—this parliament. It has previously been rejected in the Senate, and we in the Labor Party will be doing all we can to defeat it in this House and to oppose it publicly.