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Thursday, 4 April 2019
Page: 14800


Mr KEOGH (Burt) (10:00): Today we are debating legislation, the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2019, to tighten up the administration and regulation of our superannuation industry. This stands in contrast to decisions that have been made by this government. A year or so ago we had a decision that reduced the penalty rates payable to workers on Sundays and public holidays. It reduced the take-home pay for many of our lowest-paid working Australians. Labor said to the government and to the Australian people, 'We can fix this.' We proposed legislation to resolve this issue, and the government said no. The government said no because it said, 'Well, that was the decision of an independent tribunal. We should not legislate around that problem.' In doing that, not only did the government show its hypocrisy—hypocrisy because it was exactly the opposite of what it said when it came to the issue of safe rates, an issue that it was so opposed to that not only did it reverse the decision of the tribunal in that matter but it abolished the entire tribunal—but it's also entirely contrary to the way in which we saw the superannuation system develop in this country. In the case of our superannuation system, we saw a case brought in the commission to expand superannuation so that it applied to all working Australians. The commission declined to make that decision, and the parliament, as the sovereign body of this nation, said, 'We can resolve this through legislation.' The parliament went and legislated to create a compulsory superannuation system in this country. In that regard it stands in stark contrast to the position adopted by this government when it comes to the issue of penalty rates. The issue is wholly competent and wholly possible for this parliament to resolve, and indeed it should do so. If there is a Bill Shorten government after the next election, this parliament will legislate to fix the penalty rates issue.

Today, in highlighting that stark contrast, we are dealing with legislation to further tighten up and improve our superannuation system in Australia. This bill, which deals with the accountability and outcomes of superannuation, is vitally important, because, through the creation of our universal superannuation system here in this country, we have created and developed one of the largest bodies of savings in the world. It is important for every working Australian that their money, the money that is looked after by superannuation trustees, is properly governed and that they can have confidence that the money they are contributing to superannuation, whether through the superannuation guarantee or through a voluntary contribution, will not only be there in the future for them to rely on but will be protected against bad governance and bad investment decisions. It also provides an opportunity for Australians to be in a fund that will actually provide good returns for them.

The way in which this legislation was introduced into this parliament highlights the way in which the coalition government really isn't committed to superannuation for ordinary working Australians. I say that because, when you look at what this bill is targeted at, in a sense what it is doing is making life harder for trustees administering the MySuper-style accounts of most ordinary Australians, but it is not imposing those regulations on many of the retail funds and choice funds out there. The curiousness of that is this: who does that then provide a benefit for? It certainly doesn't protect the people who have put their money into types of superannuation accounts other than MySuper. What it does to it easier for the banks and other superannuation funds to make a profit from the money that is being put into those superannuation accounts. It lets them off the hook while trying to apply proper scrutiny of MySuper. There is no criticism of that. Why on earth would you let those others off the hook? It reflects the priorities of this government. It is the priorities of this government that have delivered proposed massive tax cuts for the big end of town, but they don't look after ordinary working Australians. It is these perverse priorities from this government that led to the initial bill that we saw here.

Fortunately, the government has seen the light, because of the pressure applied by our shadow minister for financial services, in seeing that this legislation had to be amended. The Senate facilitated that occurring through a range of government and opposition supported amendments going through. What the bill as a whole is trying to do is very important. It is very important to make sure that APRA, as the prudential regulator overseeing one of the biggest bodies of savings in the world, is not at risk, because when you create a body of savings like that it is a honey pot. People see that as an opportunity to make their own money. We need to make sure that that money is available for the people who need to rely on it in their retirement.

We have now made sure that a lot of the additional regulation that was going to apply just to MySuper accounts or just to trustees managing MySuper products will now apply more generally to retail funds across the board so that we have these protections protecting all superannuation accounts. There are also the protections around outcomes and reporting on those things and making sure that the technical amendments mean that the outcome tests that will be applied will actually be appropriate and will actually deliver on the outcomes. We've made sure that there will be good penalties that can be applied to the directors of these trustees so that they take responsibility for the things that they do as directors of trustees of superannuation funds. A huge burden of responsibility is placed on them.

When we look at what's happened, in particular, in retail funds—the returns that are being provided, the lack of transparency that has existed in relation to those returns, and the fees that are baked into those lower returns—it is quite clear that people in Australia have effectively been ripped off in relation to some of these superannuation funds. That, fundamentally, is unfair to them. It is unfair to them but it is also unfair to the Australian taxpayer. When people are getting lower returns, when people end up having up to $100,000 less in their retirement savings because of being gouged on fees or having substantially lower returns because of the fees baked into those funds, it means that they are more likely to end up on the pension scheme sooner and it means that they are then going to have to draw on taxpayer funds in that regard. It is good that we have a pension scheme that operates there as a safety net—absolutely—but it shouldn't have to kick in because of bad management and bad investment decisions by retail funds. So, having those outcome tests, making sure that directors are responsible for meeting the best interests of superannuants and holding those directors to account for that, is very, very important.

It will join a suite of other matters that Labor wishes to introduce when it comes to superannuation. I have been having a long-running correspondence discussion, we might call it, with the Commissioner of Taxation. It results from a constituent of mine whose employer had not been paying his superannuation. His employer closed up business and left his superannuation account deficient of funds. The ATO has been pursuing this person, the employer, for a whole range of unpaid taxes, including the superannuation guarantee payments. It is good that the ATO does that. Interestingly, there is nothing that my constituent can do to try and force those funds out of his former employer. Also, there is nothing that my constituent can do to find out when he can expect those superannuation funds to be paid, even though the former employer has entered into a payment arrangement with the ATO. I raised this with the commissioner and said, 'Why can't you tell him?' and I was told that it is because of the privacy provisions in the tax act. I said, 'That's curious, because the privacy provisions in the tax act say that you can't disclose matters that don't relate to the person seeking the information,' because obviously it is his money. It is his superannuation account that the money is going into. Those matters directly relate to him.

My beef may well be with the operation of those privacy provisions, but what it also points out is that there is something lacking in the way in which ordinary working Australians can go about enforcing what is effectively an employment right, which is to be paid their full remuneration when they get their weekly, fortnightly or monthly pay packet and for that money to end up in their superannuation account. That's why it is so crucial to—and this is why Labor has adopted this policy going into this election—make those superannuation guarantee payments part of the National Employment Standards, something that can be enforced directly against the employer, something that can make sure that employees can get the funds to which they are entitled. It is about creating savings for taxpayers. It is about that way which we have created in Australia where people can look after their own retirement better by having superannuation accessible and available, at their disposal.

With that I bring it back to the fundamental point that I raised at the beginning—Labor were the architects of our superannuation system here in Australia. We were the architects of it because, despite the Industrial Relations Commission saying, 'We're not going to make an order; we are not going to create an award that puts this into our employment system,' Labor in government said: 'We hear what you are saying, Commission, but we are going to legislate it anyway. We are going to introduce a system that will create one of the largest bodies of savings in the world and put Australians in a better place to manage and fund their own retirement.' We made those decisions, and do you know what? Every time we have taken a decision like that, for the benefit of working Australians in this country, the Liberal Party and the National Party, the members of the coalition, have opposed it. The only time they ever do anything that might even look vaguely like it is going to be in support of that system, it is a mechanism to avoid the superannuation system. It is a mechanism for making sure that a body of people that already are clearly wealthy enough to look after themselves can save even more tax dollars through the system, creating another loophole. They've never been about making sure that this system works for the vast majority of Australians.

You can see it in the way this bill was drafted originally. Yes, they went after MySuper—good. That's excellent. But they left open the minefield when it came to all the other superannuation funds—not because they saw that the highest risk was in MySuper but because it would benefit their friends at the top end of town and the banks that were managing all of these superannuation accounts. Why should extra scrutiny be applied to them? Well, I can't think! Have there been any other criticisms of the banks and the managers of these retail funds over the last year or so? Let me have a think about that. Oh, there was that royal commission that they opposed 26 times! Twenty-six times they opposed a royal commission. The royal commission made recommendations about things that should be changed. If it weren't for the pressure that was applied by Labor to make sure that these sorts of changes were applied across the board and we had those amendments made in the Senate, we wouldn't be able to stand here today and provide the support for this legislation in the way that we do now.

It is good that we have this legislation before us. As I say, we support it. But, fundamentally, what we on the Labor side of this parliament do here is support the superannuation system providing better retirement incomes and support for ordinary working Australians. We want to make sure—and that's why it was important that the scope of this legislation was expanded and why we will take this further in government if we are successful at the next election—there are the proper administration and regulatory supports around this huge body of savings. As I said before, it acts as a honey pot. It acts as a way in which people can say: 'I can make a fee out of that. I can make a profit out of that. I can get an aspect of that.' We have seen it with property developers trying to get people to put their superannuation funds into apartments. We have seen it with the fees being gouged out of certain retail funds. We have seen it in the low returns over many superannuation accounts that are available to people in Australia. Clearly there is a problem when it comes to the nature of competition in this sector if we have so many different accounts returning so many suboptimal returns for Australia's future retirees. That forebodes a fundamental problem.

That's why it is important that we have this legislation apply in a much broader way. It is good that the government got around to seeing these amendments come to fruition through the Senate. As I say, Labor will make sure that people's retirement incomes are protected by making sure that their right to their superannuation guarantee payment is part of the National Employment Standards. I look forward to the day, Mr Deputy Speaker Mitchell, as I suspect you do too, that a Labor government, hopefully in just a few months, will be able to start bringing about those changes as well.