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Interview: Kelly O'Dwyer, Financial Services Minister -

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EMMA ALBERICI, PRESENTER: The Government today announced a raft of reforms to the superannuation system, designed to increase transparency and governance. The measures being proposed are a response to the Productivity Commission's review of super.

Meanwhile, some of the key recommendations of a Senate report into the economic security of Australian women in retirement remain ignored, two years after they were suggested.

Kelly O'Dwyer is the Financial Services Minister, and joined me from Melbourne.

Minister, welcome back to Lateline.

KELLY O'DWYER, FINANCIAL SERVICES MINISTER: Great to be with you, Emma.

EMMA ALBERICI: The headline on your announcement today talked of fostering a stronger superannuation system. But then, curiously, there was nothing thereafter on actually building up the amount of money people would have in their retirement?

KELLY O'DWYER: We believe it's important that we have a superannuation system that's modern, that works for everyday Australians and gives them far more accountability over their superannuation providers.

We believe it's absolutely important that we have a strong regulator who is there to enforce the rules to make sure that members' funds can be protected because, at the end of the day, we force people to put money into the superannuation system through the compulsory superannuation scheme that we have in place. It's a $2 trillion industry and it's critical that we have the highest possible standards.

EMMA ALBERICI: But rather than a discussion about increasing the amount of money people are retiring on, or about weaning them off the public purse, your press release talked, for instance, about requiring super funds to hold annual meetings. That in and of itself is not going to improve people's retirement savings, is it?

KELLY O'DWYER: Well, annual member meetings is only one part of the sweeping package of reforms that we've announced.

It is important that there is accountability. We can't forget, Emma, that when people defer their wage for their retirement income, little amounts that are chewed up in fees and charges can actually have a very big impact on their ultimate retirement income.

So it's very, very important that, when members put their money into funds, it's used properly and it's used in their best interest. Now, having an annual member meeting will allow the fund providers to be far more accountable to members.

But it's not only that, that we're looking to change here. We're looking to make sure, of course, that APRA have got strengthened powers, so that if they see problems in the prudential framework with respect to a particular fund, they can intervene. If they think that a fund is not acting in the members' best interest, they can intervene.

These are critical changes that will safeguard members' money and it's long overdue.

EMMA ALBERICI: There was a Senate inquiry two years ago now, looking at the economic security for women in retirement, who we now already know are leaving the workforce with close to 50 per cent less in their superannuation than men. What's being done to address that?

KELLY O'DWYER: Well, it's very important that we give all people, including women, the tools that they need to actually build up their retirement savings.

And the Government was able to announce, last budget, in the budget before last, some very significant changes that will, in fact, assist women in being able to build up their retirement: that is, we will allow those people who have been out of the workforce - and women are often out of the workforce for periods of time because they have caring responsibilities; and men, too, as well, can fall into this category, as my husband can attest - they will be able to make the best use of their contributions by being able to roll that over into other years, so that they can use their compulsory contributions, maximise that year-on-year for a five-year period.

Now, that will help some people to be able to catch up on their retirement savings. That's a really important measure.

Similarly, those people who might have been an employee, but also had their own business: previously they were excluded from being able to use their contribution to be able to save for their retirement.

We are getting rid of that 10 per cent rule. We're allowing everybody to actually maximise the amount that they are able to put into their superannuation savings.

And that's a really good thing for everyone, particularly those women who are able to take advantage of this now for the first time.

EMMA ALBERICI: The 19 recommendations that came from that inquiry were handed to you 15 months ago and they included, among other things, that paid parental leave be increased to 26 weeks and that employees continue to be paid super while they're on parental leave. Have you addressed that?

KELLY O'DWYER: Well, these recommendations, as I said, are all about getting the framework right. It's all very well to pour more and more money into superannuation but if we're not getting the basics right, Emma, then there's not much point in pouring more money into the system...

EMMA ALBERICI: It's pretty urgent, though, isn't it? If one in three women are retiring with no superannuation at all, rather than tinkering around disclosure statements and requiring funds to have annual meetings, I would have thought this kind of reform is far more urgent?

KELLY O'DWYER: It's not tinkering around the edges at all to actually make sure that the money that is in funds is actually being used in the members' best interests.

I mean, one of the real problems right now, particularly for those people who are part of the casual workforce - and there are many women in that particular category - they might be forced, through an Enterprise Bargaining Agreement, to have one particular superannuation fund. They might get a different job and a different requirement from a different EBA or workplace determination to be part of another superannuation fund. So they might have multiple funds.

The default settings right now force them into arrangements with two insurance premiums, unless they opt out.

Our changes today that we've announced make it much, much easier for people to be able to opt out of those arrangements for their insurance, so that they can have just one insurance premium and all the fees and charges that were being paid out in premiums that they were paying, that were eroding their retirement savings, no longer will be eroding their retirement savings and they'll have more at the end of the day when they do retire.

EMMA ALBERICI: This inquiry, which was conducted under your watch, also recommended that the Government expedite the increase in the superannuation guarantee rate to 12 per cent to ensure, again, that superannuation is fit for purpose: that is, so people aren't relying on the public purse in retirement.

What's your timetable on lifting it from 9.5 per cent to 12 per cent?

KELLY O'DWYER: Well, as I said, Emma, I mean, we've got to get the foundations right. And when you talk about raising the superannuation guarantee, you're talking about requiring members to defer even more of their wages today for their retirement future. Now, that is important...

EMMA ALBERICI: No, the employer puts it away for them, don't they?

KELLY O'DWYER: Well, it doesn't come from nowhere. I mean, it comes ultimately from their wages and that's something that's been accepted...

EMMA ALBERICI: Wages growth have been flat anyway, so it's not like people have been getting massive wage increases?

KELLY O'DWYER: ...So, Emma... So to your point: it's got even more of an impact, then, day-to-day, for people who are being forced to put even more away for their retirement future.

We've got to make sure we get the basics right here and we're doing just that by making sure that funds are far more accountable, that APRA has strengthened powers and that funds who aren't doing the right thing by members are going to be held to account for the first time; that APRA isn't simply using moral suasion to persuade these funds to do the right thing; that they've actually now got a big stick to make sure that they do do it, or they can potentially lose their licence and the ability to be able to hold those funds on trusts for those people.

EMMA ALBERICI: Let's just shift to another matter. What's your view on the idea of a postal plebiscite for same-sex marriage?

KELLY O'DWYER: Well, look, it's been the Government policy to have a plebiscite. We want to give every Australian a say on this important issue.

My view is very clear. It's been enunciated on many, many occasions. I actually do support a change to the Marriage Act and I do support us being able to hold that vote as soon as possible.

Now, the reason we're not able to hold that vote right now is because the legislation has been stuck in the Senate and it's been held to ransom by Labor and the Greens. The sooner we get on with that vote, the sooner, I believe...

EMMA ALBERICI: Well, you could just have a vote in the Parliament.

KELLY O'DWYER: ...we'll be able to have a vote on same-sex marriage.

EMMA ALBERICI: You don't have to have a plebiscite. This doesn't require a change in the constitution, so nothing's actually being held up. You could have a vote tomorrow in the Parliament?

KELLY O'DWYER: Well, that is true, except for the fact, Emma, that we did make a commitment to the Australian people prior to the last election. And you might think it's old-fashioned, but we believe it's important to actually honour those commitments that were given.

Now, a postal plebiscite is one way of being able to honour that commitment that's been frustrated in the Senate. We'll explore, obviously, all of the options to be able to fulfil our mandate to the Australian people and get on with delivering, in my view, what is an important change.

EMMA ALBERICI: Your colleague, Peter Dutton, declared over the weekend that he's working on the assumption that the issue of same-sex marriage will be dealt with before the next election. Do you agree that should be the aspiration for your side of politics?

KELLY O'DWYER: I think absolutely this is an important issue for very many Australians. And I do think it is within the capacity of this Parliament to be able to get its act together, to be able to get on with delivering a plebiscite and then get on with legislating same-sex marriage.

EMMA ALBERICI: Yeah, but the Senate has said no. I mean, you said the Australian public voted you in on your promises but they also, equally, voted in the Senate - and the Senate doesn't agree with you.

KELLY O'DWYER: Well, we're going to ask the Senate to reconsider. In fact, the Senate can reconsider that in a heartbeat.

And really, it's Labor and the Greens that are actually blocking this very important vote that I think a lot of people would like to see happen. I, for one, would like to see a change to the Marriage Act and I would like for us to be able to get on with the plebiscite so that we can deliver that change.

EMMA ALBERICI: And on the issue of fixed four-year terms for the Parliament: what's your view on that?

KELLY O'DWYER: Well, look, I'm not sure that it's the number one issue that's keeping people awake at night.

EMMA ALBERICI: But Malcolm Turnbull called Bill Shorten after he raised this on television, so clearly it's something that's raised his interest?

KELLY O'DWYER: Well, look, Malcolm Turnbull is a very consultative Prime Minister and it's a great credit to him that he is so consultative. And he always looks to reach out to people on issues.

Look, what do I think? I think that four-year terms can either entrench good governments or entrench bad governments. I'm open to the question. I think it's an interesting question. But I'm not sure it's our number one priority as a government.

EMMA ALBERICI: Kelly O'Dwyer, thank you for your time.

KELLY O'DWYER: Great pleasure, Emma.