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Wednesday, 31 October 2012
Page: 12746

Mr STEPHEN JONES (Throsby) (10:23): I am very pleased to be able to speak on yet another Labor reform to preserve the value of our superannuation accounts.

Opposition members interjecting

Mr STEPHEN JONES: I can hear those on the other side riling, because they have never supported workers getting fair and decent superannuation. It was the Labor Party that introduced occupational superannuation into this country to ensure that when average workers retire from a lifetime of work they have a fair and decent retirement income. Those on the other side of the House have always opposed it. They have always opposed our reforms to the superannuation system, because it riles them that average workers might have the same sorts of benefits and the same sorts of privileges that those opposite and those that they represent have taken for granted.

This legislation is another step in reforming and ensuring that ordinary workers have a fair, decent and safe superannuation system.

They ask what the urgency is. I will tell you what the urgency is: it is $3.4 billion in workers' superannuation money which is in lost accounts and is being eroded. It is being eroded week in and week out. I will tell you what is happening to that money. It is paying for administration fees for superannuation fund administrators. It is being eroded week in and week out. It is not going to benefit those for whom it was intended. It is paying for the big end of town so they can continue to clip the ticket in the administration of superannuation and it is not going to those for whom the superannuation was intended. I will tell you what the urgency is. The urgency is that this side of the House is not willing to allow that money to be continually eroded without having proper protections in place. That is what this package of bills is all about. There is over $3.4 billion in lost superannuation accounts and we can do a lot better than we are doing today to ensure that that money is preserved for the benefit of the true owners of that superannuation.

We estimate that, under the current rules, a 20-year-old with $1,000 in superannuation can unknowingly have that balance eroded to just $418 over a five-year period. That is $1,000 down to $418 over a five-year period because of administrative fees and charges through no fault of the employee, the owner of that account, and no fault of the employer. Because that is a lost account that is continually being eroded because of those fees, a 20-year-old with $1,000 in superannuation can have that go down to half its value over a five-year period. Fees and insurance charges typically exceed the average investment earnings even for accounts with $2,000. So a 30-year-old with a $2,000 account can unknowingly have their superannuation savings eroded to a little over $1,200 in a five-year period.

Those on the other side ask what the urgency is. That is the urgency. The urgency is in ensuring that that money is not eroded unknowingly and unwittingly to the benefit of somebody else.

Mr Hockey: It's been there for five years under you, and now it's urgent?

Mr STEPHEN JONES: It was there a lot longer under you, Joe. The member for North Sydney had an opportunity to do something about this when he was in government, if he was so concerned about it. They did absolutely nothing about it. In fact, their great contribution was to try to unwind the system which is providing these sorts of benefits to employees. That was their great contribution to superannuation in this country. The benefits should be applied to the employees, the workers who have worked hard to get that money put away. It is about preserving the value of the superannuation system as a whole.

A lot of fear and smear has been put around about what we are trying to do here. Let me tell you exactly what we are doing.

Mr Hockey: Fear and smear? We hadn't even seen it until today.

The DEPUTY SPEAKER ( Mr Lyons ): Order, the member for North Sydney! You had your go.

Mr STEPHEN JONES: We will be increasing the account balance below which lost accounts are required to be transferred to the ATO from $200 to $2,000, effective from 31 December 2012. We are increasing the level at which the money becomes compulsorily transferred to the ATO for management. We are reducing the period of inactivity before an account which is unidentifiable is required to be transferred to the ATO from five years to 12 months. The reason we are changing it from five years to 12 months is the example I have just given—that 20-year-old who, over a five-year period, has their $1,000 eroded to just $418. This legislation will stop that happening.

There are safety nets in there. The only basis on which the money is transferred to the ATO is if we know neither the name nor the tax file number of the account holder. That is the basis on which the money is transferred to the ATO.

If at some time down the track—and this is what our fervent hope is—the owner of that superannuation account is found and they come forward and say, 'That money is mine,' not only have they not paid fees on it, as they otherwise would have over that period—and the fees would have halved their account balance—but they will get interest at CPI. That is a good thing.

Mr Hockey interjecting

Mr STEPHEN JONES: The member for North Sydney, Mr Huff-and-Puff over there, said he would vote against this legislation whether it was good or not. That bells the cat. The member for North Sydney just nailed it, because that is what they are on about over there: whether this is good or not, whether it is in the interests of the account holder or not, whether it is going to provide a benefit to the employee or not, they will vote against it, because they do not care. They come in here and all they are about is making some cheap political point, trying to grab a headline. Mr Huff-and-Puff himself is trying to make a big headline out of the fact that he has not read his material, that he is not up on his stuff. We know what they are going to do. They are going to vote against this legislation whether it is good or not. We on this side of the House think it is a good thing that we put in place a system which preserves the value of somebody's superannuation account and provides them with some interest on it if they come forward and claim that money. For those reasons, I commend the legislation to the House.