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Address [to] Conference of major Superannuation Funds: Gold Coast, Queensland, 27 March 2001



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  Australian Labor Party   National ALP

Simon Crean - Conference Of Major Superannuation Funds http://www.alp.org.au/media/0301/scspsup270301.html Thursday, 29 March 2001

Conference Of Major Superannuation Funds Simon Crean - Shadow Treasurer

Address - Gold Coast, Queensland - 27 March 2001

Check Against Delivery

LABOR WELCOMES THE RECENT STATEMENT BY THE RETIREMENT FUTURES FORUM.

THE PAPER DESCRIBES HOW THE FORUM CAME TOGETHER DUE TO A SHARED CONCERN ABOUT THE POSSIBILITY OF NATIONAL SAVINGS AND RETIREMENT INCOME STRATEGIES BEING OVERLOOKED OR INAPPROPRIATE POLICIES BEING INTRODUCED IN THE CONTEXT OF THE UPCOMING ELECTION.

WHILST THERE ARE VALID GROUNDS FOR THE INDUSTRY TO FEAR THE MOTIVES OF THE COALITION, ESPECIALLY GIVEN THE APPALLING RECORD OVER THE PAST 5 YEARS, LABOR HAS CONSISTENTLY LED THE WAY AND OFFERED BI-PARTISAN SUPPORT FOR REFORMS OF RETIREMENT INCOMES POLICY. WE REMAIN COMMITTED TO BUILDING ON THOSE ACHIEVEMENTS.

SUPERANNUATION IS A LABOR ISSUE. IT'S ONLY BEEN ADVANCED WHEN WE HAVE BEEN IN OFFICE.

IN 1995 LABOR PROPOSED THE CO-PAYMENT - AND FUNDED IT IN THE FORWARD ESTIMATES. THE CO-PAYMENT WOULD HAVE INCREASED CONTRIBUTIONS TO 15%. IN ADEQUACY TERMS IT WOULD HAVE MEANT OVER $100,000 IN ADDITIONAL RETIREMENT BENEFIT TO AN AVERAGE WORKER AGED IN HIS OR HER MID 30'S. IT WOULD HAVE DELIVERED AROUND 60% OF PRE-RETIREMENT INCOME AS POST RETIREMENT INCOME - A MASSIVE BOOST. THE COALITION IN ADVANCE OF THE 96 ELECTION AGREED TO KEEP IT. ONCE IN OFFICE, THEY RENEGED. IN 1996 LABOR OPPOSED THE SURCHARGE, POINTING OUT THE SHORTCOMINGS THAT HAVE NOW COME TO FRUITION.

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ALL THEY HAVE DONE SINCE IS TO RUN THE "CHOICE" AGENDA - A PHONY AGENDA - WHICH IS AGAINST THE INTERESTS OF MOST MEMBERS AND MOST FUNDS.

THE GOVERNMENT'S IDEA OF CHOICE WILL INCREASE COSTS AND THEREBY LOWER RETIREMENT BENEFITS. IT WILL ALSO IMPOSE A SIGNIFICANT ADDITIONAL BURDEN ON SMALL BUSINESS. IT IS A BAD IDEA, AND IT IS UNFAIR.

LABOR SUPPORTS MEMBERS HAVING CHOICE ABOUT THEIR SAVINGS. THE REAL ISSUE OF CHOICE SHOULD BE ABOUT INVESTMENT CHOICE. THIS IS SOMETHING WHICH IS INCREASINGLY AVAILABLE WITHIN THE CURRENT FRAMEWORK AS MOST FUNDS HAVE NOW MOVED IN THIS DIRECTION. MEMBERS SHOULD HAVE CHOICE, AND THE CHOICE THEY EXERCISE SHOULD BE AN INFORMED ONE, NOT ONE AIMED AT SHIFTING MARKET SHARE.

LABOR NOW PROPOSES AN INDEPENDENT EXPERT REVIEW AS THE WAY FORWARD TO COMPLETE THE POLICY FRAMEWORK - HOPEFULLY IN A BI-PARTISAN WAY. AGAIN THIS HAS BEEN REBUFFED BY THE GOVERNMENT. IT IS SOMETHING WE WOULD INITIATE IMMEDIATELY WE TAKE OFFICE. MORE OF THAT LATER.

THERE ARE ASPECTS OF THE REPORT THAT WE AGREE WITH: THE PAPER ARGUES IF PUBLIC SAVINGS IS TO BE REDUCED THEN THEY SHOULD AT LEAST BE DIRECTED TOWARDS INVESTMENT IN OUR FUTURE COMMUNITY NEEDS.

LABOR HAS LONG ARGUED THAT THERE NEEDS TO BE A BETTER BALANCE BETWEEN REDUCING THE SIZE OF GOVERNMENT AND INVESTING IN FUTURE COMMUNITY NEEDS BE IT IN EDUCATION, RESEARCH OR RETIREMENT INCOMES.

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THIS IS WHY WE INTRODUCED THE SUPERANNUATION GUARANTEE -BECAUSE RETIREMENT INCOMES IS A MASSIVE INTERGENERATIONAL ISSUE. DEMOGRAPHIC TRENDS ENSURE WE HAVE TO START ADEQUATE SELF-PROVISION NOW, TO AVOID AN UNSUSTAINABLE SITUATION OVER FUTURE DECADES.

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UNFORTUNATELY OUR ACCOUNTING SYSTEMS DON'T RECOGNISE THESE LONG TERM BENEFITS WHICH WILL FLOW FROM THESE CURRENT INVESTMENTS - THAT IS WHY I HAVE ALWAYS ARGUED THAT THE LONG-TERM COST SAVINGS SHOULD BE CONSIDERED IN THIS ISSUE.

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THE PAPER ALSO RECOGNISES THE SOUND FOUNDATION AUSTRALIA'S THREE PILLAR STRUCTURE HAS DELIVERED - THIS IS LABOR'S LEGACY, ONE OF WHICH THE WORLD BANK HAS RECOGNISED AS BEST PRACTICE. BUT THIS IS JUST A FOUNDATION - WE NEED TO BUILD ON THIS TO OBTAIN WORLD

LEADERSHIP IN RETIREMENT INCOMES POLICY - AND THIS IS WHAT LABOR WISHES TO ACHIEVE THROUGH OUR COMPREHENSIVE REVIEW.

THERE ARE ASPECTS OF THE REPORT THAT WE DISAGREE WITH.

LABOR BELIEVES THAT THE OPTIONS PROPOSED BY THE FORUM ARE LIMITED. THEY DEAL SOLELY WITH WHAT GOVERNMENT SHOULD DO AND, IN PARTICULAR, TAX.

TAX IS A MAJOR PART OF THE DEBATE, HOWEVER, THE FORUM SUGGESTION ALWAYS SEEMS TO BE FOR THE GOVERNMENT TO COLLECT LESS.

THE FORUM ASSERTS THAT CONTRIBUTIONS AND EARNINGS TAXES WERE INTRODUCED AS REVENUE MEASURES AND THAT THEY COULD SIMPLY BE ABOLISHED IN THE CONTEXT OF A BUDGET SURPLUS.

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THEY WERE NOT INTRODUCED TO COMPLICATE THE SYSTEM, RATHER THEY WERE INTRODUCED IN ORDER TO PARTIALLY FINANCE THE MUCH LARGER COSTS OF SPREADING SUPERANNUATION THROUGH THE WORKFORCE - OF MAKING IT THE UNIVERSAL SYSTEM WE NOW ALL ENJOY.

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THESE COSTS WILL INCREASE AS SUPERANNUATION APPROACHES ADEQUATE LEVELS NOT DECREASE. ●

WHAT SHOULD THE SUPERANNUATION AND RETIREMENT INCOMES REVIEW EXAMINE?

THE QUESTION THEN NATURALLY ARISES HOW SHOULD WE ADVANCE THE AGENDA IN A POSITIVE WAY? IT NEEDS LEADERSHIP - IT NEEDS BI-PARTISANSHIP. THE LEADERSHIP IS LACKING, THE BI-PARTISANSHIP IS ON OFFER.

LABOR IS PROPOSING A REVIEW - A REVIEW OF MORE THAN JUST TAX. BEYOND THE TAXATION ISSUES, THE KEY ISSUES ARE THE FOLLOWING:

1. ADEQUACY; HOW DO WE ENSURE ADEQUATE RETIREMENT INCOME FOR ALL AUSTRALIANS? HOW CAN WE MOVE TO AN ADEQUATE LEVEL OF PROVISION SUSTAINABLY?

2. GETTING THE INTERACTION WITH THE SOCIAL SECURITY SYSTEM WORKING PROPERLY, PARTICULARLY THE AGE PENSION; WE NEED TO PROPERLY INTEGRATE THESE SYSTEMS TO REMOVE ANOMALIES AND IMPROVE INCENTIVES;

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3. ENCOURAGING RETIREES TO CONTINUE SOME FORM OF WORK BEYOND RETIREMENT AGE; WE NEED TO REMOVE BARRIERS WHERE THEY EXIST; ●

4. GETTING BETTER INTEGRATION BETWEEN THE RETIREMENT INCOME SYSTEM AND HEALTH AND AGED CARE;

5. MAINTAINING AND IMPROVING THE SECURITY OF THE SYSTEM; THE NEW PRUDENTIAL REGULATORY SYSTEMS ARE NOT YET BEDDED DOWN YET - WE NEED TO EXAMINE HOW THE NEW ARRANGEMENTS ARE WORKING, INCLUDING OPTIONS FOR IMPROVEMENT.

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NO DOUBT OTHER ISSUES WILL ALSO EMERGE.

WE CALL ON THE GOVERNMENT TO EMBRACE THIS AGENDA - IF THEY DON'T IT WILL BE ONE OF THE FIRST INITIATIVES OF A BEAZLEY GOVERNMENT.

I ALSO URGE THIS CONFERENCE AND THE FORUM TO ALSO EMBRACE THIS WIDER AGENDA. LABOR IS GENUINELY COMMITTED TO ADVANCING SUPERANNUATION AND GETTING ON WITH PROGRESS AFTER THE WASTED RECENT YEARS.

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Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.

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