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Tuesday, 26 June 2012
Page: 7970

Mr LYONS (Bass) (13:31): The member for Bradfield obviously conforms to the Liberal policy of make sure you keep the capital away from the workers. That amazes me. I rise to speak today on the Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011. During the 2010 election the Gillard Labor government announced that it would assist families to save for their retirement by introducing a new low-cost simple superannuation product called MySuper. MySuper is a signature reform from the Cooper review into superannuation. The focus of the reform is lowering fees and improving efficiency and superannuation so the savings of members are maximised. This reform delivers on an election commitment to introduce a new low-cost default superannuation product, MySuper, by 1 July 2013.

The review chair, Jeremy Cooper, said MySuper would be a simple, cost-effective product that redefines what Australians should be able to expect from their super in the 21st century. I am pleased speak on this legislation today as MySuper complements the government's policies to increase superannuation from nine to 12 per cent, and it passed the Senate in March this year. It is a huge win for Australians. I am proud to say that 8.4 million Australian workers will benefit from this change. It is in the national interest to encourage Australians to save more for their retirement, but it is also fair. The superannuation industry contributes to higher retirement savings through greater efficiency and lower fees. These are solid reforms.

The proposed bill implements the core elements of MySuper and the government's 2010 election commitment to introduce a simple, cost-effective superannuation product that will replace existing default superannuation products. This bill will enable authorised Australian Prudential Regulation Authority regulated superannuation funds to offer MySuper products from 1 July 2013 and will make it mandatory for employers to make contributions to super funds that offer MySuper products from 1 October 2013 in order to meet their superannuation guarantee. Essentially, the bill sets out the requirements for authorisation of MySuper products, through APRA, that must be met by trustees of superannuation funds that wish to offer MySuper products, as well as the key characteristics of MySuper products and the permitted fees and associated fee-changing rules for MySuper products. MySuper products will be simple, cost-effective default superannuation products that will replace existing products.

Authorised superannuation funds will be able to offer MySuper products to members from 1 July 2013 and I hope that workers in my electorate of Bass take up that offer. Trustees will be required to apply for APRA authorisation for each MySuper product they wish to offer. The large employer exemption will allow funds to offer a tailored MySuper product to employers who contribute to that fund for the benefit of at least 500 employees and associates to suit the needs of the particular workplace. However, some employers will be able to negotiate a discounted administration fee for their employees in a generic MySuper product. This will allow trustees to provide more flexibility to certain employers and will result in some members not being forced to pay higher fees as result of the introduction of MySuper.

We, the Gillard Labor government, want to do all we can to ensure that Australians have enough money in their retirement. We are leading healthier, longer lives and many Australians currently do not have enough saved in retirement kitty for their nonworking years. The superannuation industry manages $1.3 trillion in hardworking Australians' retirement nest eggs. Every dollar diverted in fees or other unnecessary overheads is a dollar less towards a larger nest egg for a more secure retirement. Over a person's working life these fees can total tens of thousands of dollars in lost retirement income.

The MySuper reforms are part of the Gillard Labor government's plan for a stronger economy and are the next phase in Labor's reforms to a national superannuation system. The standards that MySuper products will have to meet include no entry fees, with exit fees limited to cost recovery, and a ban on hidden fees and commissions in relation to retail product distribution and advice by financial advisers. There will also be standardised reporting requirements in plain English so that ordinary Australians will understand what is going on with their super. This is very important and will be welcome news to everyday working Australians. MySuper accounts will have the ability to accept all types of superannuation contributions. There will also be new standards around the payment of performance fees to fund managers.

Our superannuation changes build on a series of reforms the Gillard Labor government have already made to assist Australians plan for a safe and secure retirement. We have delivered reforms to provide more support for pensioners by increasing the age pension. A key example of this was in September 2009 when Labor delivered the biggest increase in the pension in 100 years and reformed the pension system so that it kept up with the cost of living. Since 2009 the maximum pension rate has increased by $154 a fortnight for singles and $156 a fortnight for couples. The government have also: delivered a new seniors work bonus so that local pensioners can keep more of their pension when working; increased the utilities allowance by about $400 a year to help pensioners keep on top of the bills; and delivered a new national transport concession scheme so that pensioners can access cheaper public transport when travelling interstate. And over the course of the last six weeks Labor have also delivered another pension boost, under the clean energy package, with another boost to occur in mid-March 2013.

Our historic reform with the minerals resource rent tax provides a significant boost to the superannuation guarantee from nine to 12 per cent over the next decade. This will increase the retirement savings balance for an average worker aged 30 today by $108,000. We are also providing new concessions for low-income earners and bigger contribution caps for older Australians with low super balances looking to make catch-up contributions. We are working hard to ensure that Australians have enough superannuation for retirement.

Together, these reforms will increase Australia's pool of superannuation by $85 billion over 10 years. This is a significant achievement. We are improving the lives of Australians now and into the future.

There has been a great deal of support for the MySuper product. Glenda Korporaal, from the Australian newspaper—not a journal that has taken to supporting Labor that often—reported on 6 July 2010:

The MySuper proposal, which is one of the basic recommendations of the report, should not be seen as controversial.

She went on to say:

MySuper is about having a standardised, low-frills, no-fee superannuation product available to every Australian worker as a basic option for their retirement plan.

Yet those in opposition and some super funds have been scaremongering. The consumers lobby Choice has said that more low-fee options were essentially good for workers. Yet the Leader of the Opposition, the member for Warringah, is mindlessly negative and opposes everything but has no real plan for building retirement incomes for workers. He acts out of political interest, not the national interest. More and more I notice in parliament the difference between those opposite, who stand for the privileged at the expense of workers, and Labor, who stand for the vulnerable. We know the Leader of the Opposition has extreme views on compulsory superannuation. He once described it as the 'biggest con job ever' and in the Battlelines—his book, for those who do not know—he outlined a plan to dismantle it and increase the age pension age to 70. There is no support for the vulnerable there. On all the big economic calls, like putting more money into the pockets of retirees, the Liberals get it wrong.

The Gillard Labor government are working hard to build a strong economy, a sustainable environment and a fair society that provides every Australian with the opportunity to prosper and succeed in life. Our first priority is keeping the economy strong, protecting jobs, driving new growth and creating opportunity for all so that no person is left behind. Labor are on the side of working people. That is why we are doing everything we can to look after families, especially at times in their lives when they need help. That is why Labor are raising superannuation from nine to 12 per cent for a more dignified retirement.

The world and the economy is changing. Australia faces many challenges and big opportunities in the years ahead: an ageing population, increased global competition, environmental degradation, keeping the economy strong beyond the mining boom, a future for manufacturing, and rapidly developing new technologies. If we do not face up to this changing world, if we put our heads in the sand, it will not be the well-off who get left behind; it will be the ordinary, vulnerable Australians who will miss out—ordinary Australians like the working families in my electorate of Bass. These superannuation changes are the right step forward to address the challenge of the ageing population. Improving living standards for this and future generations of Australians means making the right decisions now. We are doing well, assisted by the mining boom and reforms of the past, but it will not last forever. You can dig something up only once, so we need to make sure that the benefits of the boom are fairly shared. We are determined to get the big things done and do what is right, putting the national interest first even when this is not the easy thing to do. Many Australians are concerned that they will be left behind by the boom and that some parts of the country are getting ahead while others struggle with rising prices and a lack of opportunity. There is a high demand for our mining resources, being driven by the strength and growth of Asian economies, along with our strong economic fundamentals, that is pushing the Australian dollar. That is why some people—families—can buy cheaper goods and cheaper petrol, but it also puts a lot of pressure on industries like manufacturing. Change presents opportunity. The global economy is changing, technology is changing and the climate is changing. We can and should grasp the job opportunities that they create. I believe no challenge is beyond Australians, and I believe the Gillard Labor government are up to the challenges right now and we can seize them and turn them into opportunities.

Because of actions that the Labor government took in the global financial crisis, we saved jobs and avoided recession. The fact is that the Australian economy is strong, with low unemployment, low debt and a strong budget. To meet the challenges of the future, Labor is pursuing policies Australia needs for the future: putting a price on carbon emissions for big polluters, building the NBN, sharing the benefits of the mining boom and increasing retirement savings through superannuation. Australians should rightly be proud of our nation's economy. We are making significant changes to super. This is an exciting time as Labor looks after the vulnerable and boosts the savings of ordinary Australians. I commend the bill to the House. (Time expired)