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, 13 February 2017
Page: 791

Mr THISTLETHWAITE (Kingsford Smith) (18:57): The Superannuation Amendment (PSSAP Membership) Bill 2016 allows members of the Public Sector Superannuation Accumulation Plan who pursue employment outside of the public sector to remain contributory members of the scheme. This is a sensible reform and one that is supported by myself and my Labor colleagues. At present, former public sector employees are unable to remain contributory members of the scheme and must either consolidate their superannuation by moving their PSSap membership monies into a separate superannuation account or maintaining multiple super accounts.

Superannuation is complicated enough. It is the lack of understanding of the superannuation system and people's own investments that lead to bad investment choices. There have been cases of individuals who have made bad investment choices and have suffered as a result with respect to the level of their retirement income and its sustainability into the future. Of course, there were many Australians who, through no fault of their own, saw much of their superannuation savings whittled away as a result of bad banking practices in the United States which resulted in the global financial crisis and spread throughout the world. Basically no-one's investments, be they in superannuation or in other managed investment vehicles, were immune from the devastating effects of the financial crisis. So it is important that superannuation is as simple as possible and is as comprehendible and understandable as possible. Contributing to that is ensuring that people are able to, where they choose to and where they want to, maintain membership of a superannuation fund that they know and trust.

With the advent of choice of superannuation funds, it is important that all superannuation fund members get the right to exercise that choice and to remain members of the fund that they wish to contribute to during their working lives to maintain a decent standard of living in retirement. Maintaining membership of a scheme someone knows should be a contributory factor to the stability of the superannuation scheme and to providing certainty for people in terms of their investments. That is what this reform does, and that is why it is worthy of support from the parliament.

Labor are of course very proud of the Australian superannuation system and its role in establishing what is now close to $4 trillion in investment funds. Labor are committed to ensuring that Australians reach retirement with financial independence and security. We are proud of the policies over successive Labor governments that have established that wealth of investment funds and also provided for stable retirement incomes for Australians at pension age. Superannuation has also meant big changes for the Australian people and for their living standards, particularly in retirement.

Superannuation was not always a popular concept in Australia. In seeking to establish the system, Labor overcame significant opposition from interest groups concerned by the burden of its implementation and ongoing cost to businesses. It is no secret that conservative MPs and leaders throughout the country railed against the establishment of compulsory superannuation. It was first proposed under the Hawke government as a means of providing for secure and stable retirement incomes, as part of an arrangement with the Australian union movement through the Prices and Incomes Accord.

In the early nineties, when it became obvious that Australia would soon experience a significant shift in demographics through an ageing population, the Keating government pursued this reform and pursued further reform in compulsory employer contributions to superannuation funds.

As of June 2015, Australians have over $2 trillion in superannuation assets. The bill before us today creates a new subcategory of ordinary employer-sponsored members of PSSap, referred to in the bill as 'former Commonwealth ordinary employer-sponsored members', and their new employers will become 'designated employers'.

The changes in this bill better align the Commonwealth scheme with the private funds, which allow members to continue making contributions when they change employment. An added benefit of the changes in this bill is to help keep the costs associated with the administration and management of superannuation funds down. Often when a member shifts funds or changes membership of a particular fund, there can be an exit fee associated with that. There can be new fees in establishing a new fund, and there can be changes and differences in the type of insurance people take out as membership of those particular funds. These changes will also boost the retirement incomes of those affected. They reduce that impost upon people and some of the costs associated with shifting funds, particularly when someone is very happy with the fund they are operating in and does not wish to shift their savings but has to because of a change of employment. These reforms enhance the flexibility of our superannuation system, and ensure that people can continue to invest and save in the fund that meets their needs and that they are familiar with and comfortable with into the future.

The bill places some restrictions on maintaining contributory PSSap membership. For example, a person must have been a Commonwealth employee or office holder for a continuous period of at least 12 months. They must also be engaged in non-Commonwealth employment in respect of which their employer has a superannuation guarantee obligation. These are sensible restrictions, ensuring that maintaining PSSap membership into the future is a part of this scheme.

In conclusion, I support this bill. Labor supports this bill. It contains sensible amendments to our superannuation system that maintain the integrity of ensuring people get the choice of fund when it comes to planning for their retirement incomes. It also ensures that the system provides the necessary flexibility to allow people to make that choice under this superannuation system. I commend the bill to the House.