Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Monday, 18 June 2012
Page: 6734

Ms O'NEILL (Robertson) (17:04): I rise to support the Superannuation Legislation Amendment (Stronger Super) Bill 2012 and the Superannuation Supervisory Levy Imposition Bill 2012. It is with some considerable pride that I stand to make this speech because the bills continue the great Labor tradition of making sure that superannuation is well managed. We were the ones who put superannuation in place and we are the ones who are continuing to make sure that Australians who are going through the process of collecting superannuation, those who are managing it and ordinary Australians who are standing just to receive the benefits from it are going to get the very best that this system can offer.

I note the comments from the member for Fraser about the significance of superannuation in the history of our financial literacy in this country and how critical it is that Labor got that going and that we are continuing to attend to it. I also note some of the great comments from my colleague, the member for Blair, about some of the practical inefficiencies that are currently a part of the superannuation structures. These were noted in particular in the Cooper review. The real reason for this legislative program that is before the House today is that the current problems with superannuation are that it is obviously too complex, it is unnecessarily expensive and it is very slow. The member for Bradfield made a very sound point in articulating a comparison with mobile telephones and the changes that have happened there in terms of people being able to transport their telephone numbers. We have come to take it for granted that we can all be advantaged by the options that modern technology provides. In terms of the superannuation structures, we have a system that is very clunky, where we have 33 million accounts around the country with only about 11 million workers. There is unnecessary duplication, and some of the points made by my colleagues here this afternoon might explain why people have three accounts and just let them do their own thing rather than go through the processes, that are currently so difficult, to compile those into one.

We know that the legislation that is before the House today will really make superannuation easier, for the funds to administer, for the members and for employers, and we know that there are significant gains—savings of up to $1 billion—that will be achieved through the implementation of these SuperStream reforms. Obviously the industry has been key in the conversation on the way we have planned for this to be implemented, and I am very pleased to say that, in our recent hearing, the Financial Services Council was very clear in welcoming this piece of legislation. They let us know that over the past decade the industry has actually endeavoured to agree on a set of data standards for managing these transactions between entities, but they articulated that they lack the capacity to compel external stakeholders, and sometimes even their own stakeholders, to comply with industry developed standards. They welcomed this legislation because these compulsory standards help standardise the process for employers and funds in dealing with one another. That can only be a good thing for Australians, who sometimes leave their superannuation on a 'set and forget' strategy.

That view, of how important this legislative change is for superannuation and ordinary Australians, was echoed by Mr Murray from Treasury and Mr Olesen from the Australian Taxation Office, who actually articulated exactly the same sort of story—that, for many, many years and for various reasons, the industry had been unable to come to an agreement, and that this failure to agree has led to a number of different processes being established between the funds, which led to a lot of deadweight costs in the industry. Obviously, we need to make sure that we respond to that reality and improve the situation.

I noticed that Mr Fletcher made some comments acknowledging that this is a unanimous report but raising some questions, as the member for Bradfield, about the Australian Taxation Office. I think it is very important that we actually get on the record that there has been a significant number of reviews and reforms to superannuation over the years. If we go back to the period of 2006-07, under a different government with a different leadership, we will see that there was an amount of $445 million—which was revised upwards to $525 million over five years—for a plan to simplify and streamline superannuation at that time. It is all well and good for members of the opposition to raise questions about why the ATO have come up with these numbers, but the reality is: there are comparative figures that indicate that this is a reasonable claim and, further, it is very important that there is consultation, with the industry sector and also the people who are going to be part of the supervisory panel, to ensure that these things are considered and to make sure that we get good value from the dollars as this money is being implemented to bring about change.

Indeed, to make sure that there is fair and open scrutiny, we have made a recommendation that the ATO be required to provide a regular, detailed breakdown of its costs and expenditure on the additional levies to the SuperStream Advisory Council, based on reporting guidelines developed in consultation between the council and the ATO. So I suppose it is like any major project that any person might commence on: you always hope that it might cost less than the numbers indicate. But, in the end, to make change and to undertake reform does cost money, and we do have a very high level of acceptance and, indeed, encouragement from the sector to move to make these changes, to make it so much easier for people who are employers—small, medium and large—to comply.

I want to also put this on the record in response to some of the comments made by the member for Bradfield as to concerns about strict liability regarding the ATO. We had evidence from the Australian Taxation Office on the day to indicate that, while there are strict liability provisions, this is supported by those in the industry, who understand that they need these tools to ensure compliance. But the ATO made a very clear point: they have the capacity, the administrative flexibility, to waive or limit penalties where employers are attempting to comply with data standards but perhaps commit inadvertent technical breaches. Of course we were very pleased to hear that, and we wanted to make sure that the ATO were encouraged to do so. So we have done that in our report, urging the ATO to use its discretion to waive or limit penalties in appropriate circumstances.

But, lest the fear campaign—even with regard to this—get some legs, I want to put on record that it will not be until 2015 that small employers will be required to actually comply with this piece of legislation in total, and that, during that period of time, there will be significant consultation with the providers of software such as MYOB or QuickBooks, which are used by many small businesses, to help the small businesses do all of their transactions regarding superannuation at the same time as they are lining up to make payments to their employees.

We have many employers who might be running a small hairdressing salon or a boutique in a local strip mall, who have a number of employees. Currently they have to fill in different forms for different employees and send any number of cheques off to different agencies—it is extremely inefficient and it is quite a paperchase to try and keep track of that. Large companies that use payroll providers will obviously be working very carefully with them to make sure that that is implemented, and it will be in the first period of time that that will occur. But, by the time this comes down to the local businesses—such as Snips Hairdressers at Copacabana or any of the other great local businesses in my seat of Robertson—the providers of the software will be well and truly across this material and be able to provide employers right across Australia, no matter how small the number of employees they might have, with adequate software to enable them to bring these provisions into their workplace and comply with the requirements of the Australian Taxation Office.

We are committed as a government not only to ensuring the superannuation system is reformed but to making sure that it boosts Australians' retirement savings. We are progressively increasing the super guarantee from nine per cent to 12 per cent, starting from 1 July next year, and we know that that stands to benefit 8.4 million workers. If you are a 30-year-old on earning an average full-time wage right now, the changes that we as a Labor government are proposing will bring an extra $118,000 to you at retirement. We are also introducing from 1 July a much-needed superannuation contribution for 3.6 million Australians who are on very low incomes. This is effectively going to refund $500 of contributions tax into the super accounts of people with incomes of up to $37,000.

As part of a range of responses to the real-life superannuation issues of Australians, we have abolished the maximum age limit on superannuation reforms of the super guarantee from 1 July next year, so that 51,000 hard-working Australians who want to keep working past the age of 70 will now be entitled to what we consider should always be their due—that is, superannuation contributions.

These two bills that are before the House today are, in fact, a natural extension of Labor's concern for doing the best we can for ordinary Australians. We are working with business and with peak bodies to make sure that we provide a degree of reform that is very enabling, that will increase productivity, that will reduce costs and that will improve outcomes for ordinary Australians. I commend the bills to the House and urge their prompt passage.