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Thursday, 4 April 2019
Page: 14793


Mr ROBERT (FaddenAssistant Treasurer) (09:32): I present a revised explanatory memorandum to the bill and I move:

That this bill be now read a second time.

This bill amends the Corporations Act 2001, the Superannuation Industry (Supervision) Act 1993 and the Financial Sector (Collection of Data) Act 2001 to strengthen the transparency and accountability of super funds and improve outcomes for members. The government believes Australia's compulsory superannuation system must be transparent, accountable and well regulated, prioritising outcomes for members, not shareholders, directors or employees, or trade unions. I'm confident the measures in this bill will achieve these outcomes.

Super is an important financial asset—for most Australian households, their largest financial asset and their second-biggest asset after the family home. That's why we need to make sure we've got the foundations right. The powers of the regulators and the obligations of trustees and directors must measure up to contemporary standards. That's why the measures in the bill are essential and why they need to be passed.

Many of the measures in the bill have been on the policy agenda for several years and have been recommended by past reviews into super, including most recently by the Productivity Commission, which labelled them a policy must-have. The bill contains new measures to modernise the super system and reintroduces the portfolio handling disclosure measures. It implements two of the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry relating to super. It will improve the quality of super products by introducing a new requirement for trustees to consider the appropriateness of their MySuper and choice products via a new outcome assessment.

The bill strengthens the Australian Prudential Regulation Authority's powers in a number of key areas. The enhanced directions power will ensure that the regulator has the ability to quickly intervene to protect the interests of members, including by directing trustees to take specific actions, such as transferring, merging or winding up a fund. The bill also strengthens the powers of the regulator by requiring approval to be obtained before a change in ownership or control of a trustee takes place by introducing civil and criminal penalties for trustees and directors who break their obligations and by enhancing the authorisation process for MySuper products.

The government expects the regulator to use these powers to safeguard the interests of members, including to more effectively address fund underperformance. Finally, it will improve transparency by introducing a requirement for trustees to hold annual members' meetings by enabling the Australian Prudential Regulatory Authority to obtain more detailed data on super fund expenses and by introducing workable arrangements for portfolio holding disclosures. The performance of the super system has a direct bearing on the retirement incomes of each and every Australian. Confidence in the system is obtained by ensuring members can see where their funds are being invested and see super trustees who are complying with the law.

It's also important to recognise that, in passing this bill, we are legislating two recommendations of the royal commission. This is within nine weeks of the government receiving the final report. It's only this government, frankly, that can be trusted to take action on all 76 recommendations, and the passing of this bill is yet another example of the government continuing to reform the financial sector in a way that delivers better outcomes for members of superannuation funds. It's only this government that is putting members' interests first and it's focusing on ensuring Australia's super system delivers outcomes for all Australians first and foremost, not for any self-interest in the industry—that is, a system that encourages people to participate actively; that ensures transparency to facilitate informed decisions; that gives people the confidence to invest; that is a strong regulator; and that is equipped to protect members' interests and, when required, to hold funds to account. I'm confident the measures in the bill will achieve these outcomes. Full details of the measures are contained in the explanatory memorandum.