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Wednesday, 18 September 2019
Page: 2519


Senator McCARTHY (Northern TerritoryDeputy Opposition Whip in the Senate) (12:24): The Treasury Laws Amendment (Putting Members' Interests First) Bill 2019 seeks to balance the interest in providing affordable, effective life insurance cover to employees, many of whom would be uninsurable, against the public interest in ensuring that member accounts are not eroded by insurance premiums. Labor supports the objectives of the bill to protect individuals' retirement savings from erosion, but we do have some concerns about unintended consequences regarding members in high-risk occupations, the implementation time frame of the bill and insurance premium increases and long-term impacts.

The Senate committee received 44 submissions, including submissions from funds, insurers, APRA, the ACTU and individual unions. It's unfortunate that public hearings were not scheduled, which will be particularly clear when I relay to the Senate some of the serious concerns across remote and regional Australia. We are certainly proposing amendments to remedy the defects in this bill, including an amendment to extend the operative date to 1 July 2020 and to protect the benefits of workers in high-risk industries. Labor will always look to ensure that workers get a fair deal from their superannuation.

We've heard many different speakers, in particular from the government, on superannuation, but there have been some inconsistencies when we hear new coalition MPs come out each day with a new way to undermine superannuation. We should not be making superannuation harder. Let me share with the Senate that First Nations members continue to face significant barriers to accessing the superannuation system just as it is. These barriers are well documented, and they were further exposed during the royal commission—the royal commission that the government did not want to have. The evidence presented at the commission found that many First Nations members, particularly those living in remote communities, still have to face hurdles in meeting fund identification requirements. As Commissioner Kenneth Hayne said:

… Aboriginal and Torres Strait Islander peoples encounter needless difficulties to do with identification and about binding death nominations.

In fact, just yesterday I met with Eva Sheerlinck, the CEO of the Australian Institute of Superannuation Trustees, and Lynda Edwards, from Financial Counselling Australia. AIST were here to brief First Nations caucus members on the Indigenous Super Summit 2019, which was held in August. They also came to brief us on the Indigenous Big Super Day Out, held recently in Arnhem Land. The obstacles First Nations people face, particularly in remote communities, to accessing their superannuation and insurance and accessing the superannuation and insurance of a deceased relative are also a clear concern for these communities. People are missing out on the savings that are rightly theirs, due to identification issues—changes in phone numbers and addresses, name changes; it is very hard. It may sound like it shouldn't be hard, but think about the fact that just in the Northern Territory alone we have over 100 Aboriginal languages. We also have people whose identification is through an English name as well as their language name. Take my name, for example: Malarndirri Barbara Anne McCarthy. Malarndirri is an issue for some of the superannuation funds. Why would it be an issue? It is clearly something that many First Nations people struggle with in trying to communicate identification, whether it's with the super funds or even with the Australian Taxation Office and through the myGov system. These are issues that this Senate needs to be acutely aware of and the government needs to be aware of going forward. People are missing out on the savings that are rightly theirs due to these identification issues.

AIST were recently in Arnhem Land for the Big Super Day out. These outreach days are organised by the First Nations Foundation, a terrific organisation connecting Indigenous Australians with lost super. They bring reps from AIST, DHS and ATO to hold outreach days in these communities, and I commend them for that work. The need, though, is absolutely huge, and I don't think the Australian parliament actually appreciates just how huge that need is out there.

In north-east Arnhem Land, they spoke to 400 people in four communities—Milingimbi, Gapuwiyak, Galiwin'ku and Ramingining—and they had to turn other people away, mostly due to the wait times on the phones. Some of these are just logistical matters. First Nations Foundation have already reconnected $24 million in superannuation to First Nations people. Imagine what those families could do, had they known earlier of what they could access in terms of super, for those people already living lives in disability, in poverty, on renal dialysis and needing to be able to access this. They have not been able to access it until recently.

With this Big Super Day Out, they have helped 1,636 people across 21 communities in Australia. These organisations on the front line are seeing the impact that the confusion around super is having in our communities. They told us of family members trying to access the superannuation and insurance of deceased loved ones. A woman was trying to access her husband's super. He died just weeks earlier. Their marriage was described as a cultural marriage in some of the communities and the different language groups, yet they had to prove their relationship, or the wife certainly did, over the phone when trying to access his super. This is just one example of the cultural significance in making sure that there is greater awareness and interpretation with the different languages. As I said earlier, there are over 100 Aboriginal languages just in the Northern Territory alone. AIST was able to act as a third party on the phone to the superannuation fund to track down the lost super but this is not something that can always happen. They are not there in communities all the time and the financial counsellors who are there are not recognised as a third party, so the system is quite confusing and the barriers are enormously high.

At the Indigenous super summit, delegates agreed to an action plan. Firstly, standardise the AUSTRAC Aboriginal and Torres Strait Islander customer identification and binding death nomination forms. This would mean that every superannuation company would have the same forms. Think of all the different super companies there and the different forms just for those two areas—identification and the binding death nomination form. Secondly, allow financial counsellors to act as third-party representatives for members and funds, and use the financial counsellor register to give them confidence that a counsellor is a registered third party. Thirdly, partner with financial counsellors on the implementation of new processes. And, finally, as part of the action plan, work towards building an industry code of conduct. These are things which will make superannuation easier at a community level.

I will now go to members in high-risk industries. Labor has concerns about the unintended consequences of this bill for members in high-risk occupations. Industry Super Australia advised that nearly 30 per cent of workers under 25 years, or approximately 340,000 employees, are employed in occupations and industries that are inherently hazardous. Some industries are extraordinarily hazardous. In 2016, 50 per cent of worker fatalities occurred within the transport, postal and warehousing, and agriculture, forestry and fishing industries. We're most definitely keen to ensure that younger workers are protected from erosion of their superannuation balance at the same time as ensuring these workers in these industries have cover. Stripping police, construction workers, firefighters, transport workers and miners of their life insurance through superannuation, which may be the only life insurance they can access, is really not a reasonable step. Again, this will greatly impact on First Nations Australians, who are already facing impediments to accessing super and insurance. Construction is definitely the fastest growing employer of First Nations people in the country. Workers and their families may be faced with devastating hardship if they're unable to access life insurance in the face of a calamity. Workers who put their life on the line deserve access to affordable insurance that will protect their loved ones in cases of need.

I go to some of the concerns Labor has about the time line of this bill. The time proposed—less than two months from passage to implementation—will leave thousands of Australians stuck on a phone waiting for their super funds to respond. Let me tell you, in places like Arnhem Land, the Kimberley and Cape York that puts extraordinary pressure on families, especially when they don't have the direct access that many places in southern Australia do. Industry Super Australia, on behalf of industry super funds, provided evidence of the impact. It said:

If the Government proceeds with the proposed changes, the implementation date is unimplementable and will result in member confusion and detriment. It is proposed that the commencement date of 1 July 2020 would allow funds to renegotiate insurance contracts on reasonable terms, make relevant system changes and properly inform members, but under no circumstances should it be sooner than 6 months after royal assent.

That's the advice the industry super funds are giving. The government has rushed this bill through without adequate time to consider these questions. We certainly needed to have the opportunity, with a Senate inquiry, to enable people to speak directly to senators about the issues that I have raised in my speech and the issues my colleagues have raised in previous speeches in this debate. We want to support the objectives of the bill, and we will propose amendments to protect workers in high-risk industries and to allow a reasonable, but not excessive, amount of time for superannuation funds to implement these changes. I urge the Senate—I urge the government—to consider the concerns that we are raising. These are sensible amendments and we certainly ask the government to support them.