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Monday, 18 June 2012
Page: 6725

Dr LEIGH (Fraser) (16:24): The Superannuation Legislation Amendment (Stronger Super) Bill 2012 and the Superannuation Supervisory Levy Imposition Amendment Bill 2012 introduce a framework to support the implementation of superannuation data and payment regulations and standards that will apply to specified superannuation transactions undertaken by superannuation entities, retirement savings account providers and employers. As the previously speaker noted, this is technical legislation, but it is legislation that will make a difference to Australians and their families.

SuperStream costs of $467 million will be collected through the superannuation supervisory levy from 2012-13 to 2017-18. That will enable the government to collect the implementation costs associated with the SuperStream measure. The opposition have acknowledged the efficiencies from the SuperStream proposal and have acknowledged that they have the potential to deliver real savings over time and will benefit superannuants.

The Association of Superannuation Funds of Australia calculates that $1.3 trillion of assets are in superannuation funds. Treasury forecasts estimate that this will grow to between $3 trillion and $5 trillion by 2025. When Bob Hawke took office in 1983, just 40 per cent of the workforce had superannuation cover. Thanks to Labor, that rose from 72 per cent in 1991 to 94 per cent in 2007. Australians have more money invested in managed funds per capita than any other economy in the world.

The Minister for Financial Services and Superannuation today released new research showing broad support for the superannuation system but that, understandably, many people continue to find it a difficult topic to understand. Senator Sherry, who recently stepped down after many years of public service, was one of those in the Labor caucus with a true passion for superannuation—but I cannot promise that the rest of us ever had quite his level of engagement with that topic. But it is important that Australian policy makers recognise the benefits to improving the simplicity and the efficiency of the superannuation system.

There is $20 billion in lost super in Australia, and reuniting Australians with their lost superannuation is absolutely critical. I joined with Chris Bourke MLA, last year in running some mobile offices around the ACT. We found that there were particular postcodes in which there was a very high level of lost superannuation. We worked with a simple mobile office and a laptop computer helping people get back in touch with their lost superannuation accounts using the ATO's SuperSeeker tool. We were pleased on a number of occasions to assist people in finding their unclaimed superannuation.

The research announced today by the Minister for Financial Services and Superannuation showed that people's level of interest in their superannuation varied depending on how old they are, how financially literate they are and the amount of superannuation they had saved. It found that across all age groups, the majority of Australians were not confident that they have enough superannuation to retire and live comfortably on and that, overall, employers believe that superannuation is beneficial to their employees and the general population to reduce the reliance on the pension—giving lie to the claim by some of those opposite in the early 1990s that employers would not support universal superannuation.

The superannuation industry is currently dominated by paper based transactions. They are inefficient in both processing costs and the time taken for transactions to occur and superannuation to be deposited in to members' accounts. The superannuation data and payment standards will allow participants in the superannuation system to communicate using standard business terms in a consistent and reliable format. Using electronic transmission, with agreed security protocols, will mean that we will get quicker processing of transactions and fewer errors. Just as e-health is bringing about efficiencies in the healthcare system, so, too, greater efficiency in the superannuation payments system is a benefit to all Australians. It is an easier system for employers to use. There will be fewer lost accounts and Australians will get the money in their accounts more quickly—which, of course, means that they will begin earning returns more quickly.

The superannuation data and payment standards will be mandated for superannuation entities, including approved deposit funds, RSA providers and employers. The regulators—being the commissioner and APRA—will support the rollout of the new data and payment standards through education activities and a new compliance framework. Industry submissions to the super system review estimated that savings of up to a billion dollars per annum are achievable from implementing the SuperStream reforms.

Members will be able to look up and keep track of their superannuation, have low-value inactive accounts consolidated automatically, be able to consolidate larger accounts easily, have their contributions and rollovers processed more quickly and be able to more easily check if their superannuation contributions have been made. Employers will benefit from having standardised, simplified administrative processes when dealing with superannuation funds. Superannuation funds will benefit from standardised and simplified administrative processes when dealing with employers and other funds, and be able to make greater use of tax file numbers to facilitate matching and consolidation of accounts and of electronic validation services from the ATO that will help their administration and help ensure members are properly matched with their superannuation. Efficiencies for superannuation funds mean higher returns for fund members.

When Prime Minister Paul Keating moved to introduce the superannuation guarantee levy, Wilson Tuckey drew on his long history in the racing industry to compare the legislation to the 'worst type of jockey … both stupid and dishonest'. Mr Tuckey continued:

When the poor old employer levy gets to 12 per cent, what will it deliver? Luckily, it might deliver an overseas holiday and a few presents for the kids, but it will not deliver a retirement income at the inflated costs of those days.

As Minister Shorten has demonstrated, a 12 per cent superannuation guarantee will provide to a worker now aged 30 on average full-time wages a real benefit of over $553,000 at age pension age. That should leave a bit of change after an overseas holiday and a few presents for the kids.

The Leader of the Opposition once called Labor's superannuation guarantee a con job. Those opposite have either been uninterested in superannuation or outright critical. When Senator Bishop—as she then was—spoke in the other place on the introduction of universal super on 18 August 1992 she said:

On this side opposition members argued very logically and meaningfully that the imposition of this compulsory superannuation tax is a de facto federal payroll tax.

Yes, they were running their 'great big new tax' argument even against compulsory superannuation. Then Senator Bishop told the Senate about a conversation with a small business person who had said:

But now that this compulsory superannuation payment has gone through, yesterday I had to sack a part time employee and turn a full time employee into a part time employee.

The late Senator Peter Cook, a man for whom I was privileged to work, was moved by that statement to interject that given that the law for universal superannuation had not yet come into effect, it was hard to see how small-business people would be affected by it. You can see shades of that in the scare campaign those opposite are running against the carbon price, which has not yet come into effect. But Senator Bishop—as she was then was—was unmoved and finished up the debate as follows:

I heard Senator McMullan say, ‘The difference between our systems on superannuation is that ours is compulsory and theirs is voluntary’. That is very true. That is an essential difference. Our policy is designed to make it attractive for people to provide for themselves in later life whereas this Government’s is designed to penalise business, to regulate it out of existence.

Of course, if you carry on with that logic then the member for Mackellar should today be saying to this chamber that superannuation is penalising business and ought to be scrapped. But the fact is that no-one is making those arguments. I quoted some of the statements made in the 1990s because they illustrate an important point, not just about superannuation but also about economic history more generally. The economic reforms that have made Australia great, like universal superannuation, were hard fought at the time. Many of them were opposed by those opposite and many of those opposite at the time said they would scrap them if they were to win government. But when they did in fact take the Treasury benches, they did nothing of the kind. Universal superannuation is now part of the Australian social fabric. It was attacked at the time, demonised as being a big new tax and is now recognised as being an important pillar of a dignified retirement in Australia.

Australian workers, 8.4 million of them, will benefit from an increase in the superannuation guarantee rate from nine per cent to 12 per cent. This government is also abolishing the age limit for the superannuation guarantee so, no matter what your age, if you work you will get super. It will provide an extra contribution for the 3.6 million Australians who are earning up to $37,000. That includes plenty of part-time workers as well as low-income earners. It is a recognition of the point made in the Henry tax review that the superannuation concessions were, under the Howard government, significantly more generous for high-income earners than for low-income earners.

We are putting in place simplification reforms, which will allow people to see their superannuation account and will give employees certainty by requiring superannuation information to be on every pay slip so people can check to make sure they have got what they are entitled to. We are also introducing a MySuper product, recognising that most employees will take the default fund and within that fund will take the default investment plan. So it is important that the defaults are good and that defaults get good market returns. We are also putting in place more efficiencies to ensure lower fees for fund members. All of these reforms will ensure Australians get the superannuation they are entitled to and ensure the system is as simple, efficient and equitable as it needs to be.

I commend the bill to the House.