Mr KELVIN THOMSON (11:26 AM) —In debating the Workplace Relations and Other Legislation Amendment (Superannuation) Bill 1998 , it is perhaps timely to reflect on the history of superannuation and just how we have come to be where we are today. If we go back to 1983, before the advent of the Labor government, about 39 per cent of the work force were covered by superannuation and, because of a lack of portability, probably only about 15 per cent of workers actually benefited from their superannuation entitlements.

The system was heavily biased against women, blue collar workers and, indeed, against private sector workers. It was based on individual companies. At the same time, back in 1983, we faced, and we still face, some socioeconomic imperatives: the need to provide for a rapidly ageing population, exacerbated by a reduction of the average time spent in the work force; and the need to create a much larger pool of domestic savings in order to reduce our reliance on foreign debt and to loosen the external trade imbalance constraint.

The trade union movement took up this challenge. There were skirmishes involving the storemen and packers, pulp and paper workers, meat workers, seafarers and crane drivers. We saw a campaign commence in 1984 in the building industry, which moved on from there to the metals and transport industries. By 1986, the Industrial Relations Commission was forced to intervene in a significant way to resolve disputes concerning choice of fund—where workers' superannuation money should go. Following that, we saw the Labor government legislate to create a truly universal system of employer funded superannuation.

It ought to be said that the Labor government was empowered to do this because the union movement, about which this government is embarking on a campaign of vilification, had already, by the end of the 1980s, secured industrial awards and agreements covering in the order of 80 per cent of the work force. That fine achievement has seen superannuation fund assets grow from around $60 billion in the mid-1980s to $360 billion today, and they should exceed $450 billion by the end of the decade. To put that in perspective, that is approximately the total current market capitalisation of all the companies listed on the Stock Exchange. That in turn means that the assets of Australian businesses and governments are to a large degree owned by employees—held in their superannuation funds. I think that kind of asset backing has helped Australia through the difficulties we have seen in Asia and other parts of the world, and it has helped us meet the gaze of the markets.

Within this, industry funds are a quite recent phenomenon. They are a uniquely Australian phenomenon, increasingly providing a model for social policy developers around the world. They provide fully portable benefits in industries where, just 15 years ago, this was considered an impossibility—areas like the hospitality, building, construction and retail industries, where casualisation and lack of continuity were endemic problems.

The industry funds have succeeded because they are simple. The employers contribute to an account which is maintained in the name of each worker and which receives interest based on fund earnings. In that atmosphere of employer-employee cooperation, they have received considerable interest from around the world. I know of many people from other countries who have examined Australia's superannuation system and have seen in it a model for their own future directions. It was notable that President Clinton devoted much of his recent State of the Union address to the issue of what he called `saving social security'—which in the US translates to retirement incomes to pensions. I know that in the US there is considerable interest in what Australia has been doing.

There is, however, absolutely no room for complacency in this country. More Australians are going to retire between 2010 and 2050 than at any other time in Australia's history. They have experienced higher living standards than the generations that preceded them; they will expect a higher standard of living in retirement. They are going to live longer than previous generations, and their savings will need to be stretched further. As a result we are no doubt going to see pressure on government pension outlays. The cost of health and related care will rise as new technology extends the lives of many people into their nineties.

We have seen the household savings ratio fall from 15 per cent in the mid-1970s to 4.7 per cent in 1996-97, and this year it is expected to be less than three per cent. We have two million baby boomers about to enter retirement—most of whom have not saved enough for a secure future. Treasury projections reported by the Chief Executive Officer of the Association of Superannuation Funds of Australia, Philippa Smith, are that by around 2030 the government will need to spend 22 per cent of gross domestic product on age pensions and health care, compared with the 10.5 per cent that is spent now. If you combine that with an ageing population and declining labour force participation, we will have a real problem further down the track. So there is no room for complacency whatsoever.

Against that background, what has been this government's contribution? In August 1995, then opposition leader John Howard, when defending coalition superannuation policy, said:

That is a complete Labor lie. Australian workers will not be worse off superannuation-wise under us. It's just part of the litany of Labor lies. There's nothing left. They're going to tell lies from now on to the election about anything and everything and the Australian public should disbelieve it, just as they should disbelieve the lies they've told about our industrial relations policy. I give an absolute guarantee that people will not be worse off superannuation-wise under us. Absolute, full stop, end of story.

That was opposition leader Howard.

Ms Macklin —How long ago was that?

Mr KELVIN THOMSON —It was August 1995. Since then we have seen a full-blooded attack on superannuation. The government refused to proceed with Labor's government co-contributions to superannuation, which would have been worth billions of dollars to Australian workers. That was turned into the savings rebate, which lasted six weeks and has now disappeared somewhere into GST compensation.

The coalition government inflicted the superannuation surcharge on workers, ostensibly to hit higher income earners. In fact, it hits low and middle income earners who fail to submit their tax file numbers. It is also costing superannuation funds handsomely in administration costs and therefore leading to lower retirement incomes. They are also attacking the superannuation of workers through the bill before the House, and in just a moment I will come to the ways in which this bill will adversely affect Australian workers.

First I want to draw the attention of the House to the skulduggery of the Minister for Employment, Workplace Relations and Small Business, who has endeavoured to introduce exactly the same provisions we are seeing in this bill without reference to parliament. Towards the end of last year, the Commonwealth government proposed new superannuation clauses for the national building and construction award of 1990 and the plumbing trades agreement. They went to the Industrial Relations Commission and sought to remove reference to the fund trust deed and to make the payment cycle the same as for the superannuation guarantee legislation. They were endeavouring to remove award superannuation provisions in the building and construction industries and, in so doing, they were removing protection for worker choice of fund.

This legislation has been before the House before; I spoke about it on April Fool's Day last year. The government decided that, because they could not get it through the Senate, they would sneak up through the Industrial Relations Commission and see if they could get the provision through there and get the commission to vary these awards. If they had been successful in that, we would have employers choosing funds which require contributions to be made annually rather than monthly as at present. We would see employees being steered towards high fee superannuation products where they are paying for agents' commissions and shareholder profits, and we would see employees joining several funds as they move around in employment, with lack of portability meaning that they pay a number of administration fees.

Fortunately, the Industrial Relations Commission, along with both unions and employers associated with those applications, were unimpressed with the government's proposal. As they have so often done with superannuation and other industrial areas, they were able to sit down and work out a satisfactory resolution of the issue, and the government's claim was essentially rejected.

This is just one more example of a weak and sneaky industrial relations minister seeking to achieve through the back door what he is unable to achieve through this parliament. We saw exactly the same thing with the MUA dispute when the government endeavoured to foment industrial disputation while at the same time coming into parliament and saying, `No, we've got nothing to do with it. We're just innocent bystanders here.' We saw exactly the same thing with the unfair dismissal laws when they put into effect a regulation after the parliament had finished at the end of sittings last year. This is a minister who treats the parliament with contempt. He skulks surround the corridors of the employers like Mr Sheen's evil twin brother. Unlike Mr Sheen, this minister creates messes. He tries to foment industrial disputes and make it easier to sack workers and reduce their incomes and working conditions.

If this bill were to get through the House it would lead to increased industrial disputation. If you go back to the time before the Industrial Relations Commission was solving disputes in this area that is precisely what happened in disputes such as that between Woolworths and the storemen and packers—disputes over where workers superannuation funds should go. If the Industrial Relations Commission has no power to solve these disputes and matters are left to bodies like the Superannuation Complaints Tribunal or the tax office, which have no effective power to solve them either, inevitably we will see a rise in industrial disputation.

This is a bill which will leave workers worse off in flagrant breach of Prime Minister Howard's pre-1996 election promise. I say that because, firstly, the superannuation guarantee simply does not apply to workers who earn less than $450 per month. They depend on awards to give them some superannuation entitlement. If you take away the award provisions they will get no superannuation at all—so it will be the pension for them. Secondly, superannuation guarantee payments are made only once a year compared with awards which generally prescribe monthly or quarterly payment of superannuation entitlements. The more frequent payments are valuable to workers over the course of a working lifetime. Actuarial calculations indicate that at the end of a 40-year working lifetime you would be $16,000 better off under the arrangement for monthly contributions than you would under the arrangement for annual contributions. So the interest is worth money to you in its own right.

There is also the issue of company insolvency. All too often we see companies become insolvent and workers miss out on superannuation guarantee entitlements as a result. We have seen that in cases like Cobar, Woodlawn and others. It happens far too frequently. So, if you have got the more frequent contributions, you have a better guarantee that your superannuation payments will actually be paid.

We have also seen cases like the one referred to by the journalist from the Adelaide Advertiser Shauna Black. In an article in March last year she pointed out that more than 50,000 South Australians could lose a total of $50 million in superannuation entitlements if this particular bill were to be passed. She made reference to awards covering areas such as banking and finance, universities, the gas industry and local government which contain provisions for superannuation which include a three per cent extra entitlement granted in the late 1980s in lieu of a wage increase. Employers operating with these awards have been paying the three per cent on top of the superannuation guarantee and, if the award entitlement disappears, in all probability those workers would lose that three per cent. Clearly, a whole swag of employees will be worse off if this legislation is successful. This is part of the government's agenda to drive down wages.

I note that the Business Council and the Treasurer have recently discovered the problem of unemployment. The opposition pleaded with the government to think about unemployment when they were adopting slash and burn industry policies and pleaded with them not to garrotte the public sector. We pleaded with them to have an unemployment objective, an unemployment target, when they wrote to the Reserve Bank saying, `We don't really want you to take any notice of unemployment. All we want you to think about is inflation.' We have been pleading with them to be interested in unemployment. But what people have to understand is that their agenda here is simply to drive down wages; to use unemployment as a stalking horse to get rid of the minimum wage in order that wages generally can fall. This legislation reducing people's superannuation entitlements and taking superannuation away from awards is simply part of that agenda.

I think there are a number of questions that we ought to be asking the government minister. How will workers who receive monthly or quarterly payments be better off when the Institute of Actuaries has calculated that workers receiving monthly contributions as opposed to yearly contributions would be around $16,000 better off over their working life? That is almost twice the age pension. How will part-time and casual workers who currently receive superannuation under their industrial award because it has a lower minimum wage threshold than the superannuation guarantee level of $450 be better off? This is something that particularly will impact on women workers who tend to be more heavily concentrated in part-time and casual work. How will employers who pay employees' superannuation contributions via payroll deductions because the award allows it be better off? Employers who can no longer use payroll deductions to pay their employees' superannuation contributions will have to resort to other payment methods which can involve substantial transaction costs. This from a government which has promised to reduce red tape for small business!

How will employees who have a dispute with their employers over superannuation have recourse to the AIRC? Clearly, the AIRC will no longer have jurisdiction, so where are they to go if they have a dispute with the employer over superannuation matters? The Superannuation Complaints Tribunal has been gutted by the Bishop decision, and the tax office only has the power to handle certain matters; it cannot handle where superannuation contributions go.

To conclude, let us review what award based superannuation has achieved. It has extended the benefits of superannuation to many more employees who did not have access to superannuation previously; they did not have superannuation coverage. It has seen thousands of employees have access to additional funds to supplement their retirement incomes. It has provided many employees with death and disability insurance coverage at a low cost, which low and middle income employees would never have been able to access otherwise. It has extended superannuation coverage to part-time and casual employees, including thousands of women. It has benefited employers through productivity and wage trade-offs which were paid into superannuation accounts.

We are absolutely opposed to this bill. We are absolutely opposed to withdrawing from workers the right to have superannuation included in awards. We believe that the steps that both the Labor government and the trade union movement took during the 1980s were very much in the best interests of both workers and the Australian nation. This government's steps, including the bill before the House, to wind back the clock represent a retreat to the past, a retreat to circumstances where workers will be worse off and will not have the money to fund their retirement incomes to which they are entitled, so they will end up dependent on the pension. We will be opposing this bill, and we look forward to the support of parties elsewhere to ensure that it is defeated.