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Thursday, 4 December 2003
Page: 23974

Mr KING (1:44 PM) —Thank you, Mr Deputy Speaker Hawker, for your usual sagacity and tolerance in the administration of your important work in this parliament. I wish you and your family and those who assist you in the work that you do a very happy Christmas.

The Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 2002 that is before the House is of great importance in ensuring that some 4.8 million ordinary Australians are entitled to a choice of which superannuation fund they wish to see their life savings deposited in. That is an important matter for many Australians, not just for those I have mentioned but also for the 0.6 million-odd businesses that are the employers and that are also likely to be affected by this choice legislation.

I heard the address from the member for Kingston a little bit earlier in this debate. The first point he made about this proposed legislation—a point which seemed to not carry any weight at all—was that there would have been insufficient notice about the nature of the legislation and its provisions for those who might be affected by the legislation when it comes into force on 1 July next year. With the greatest respect to the member for Kingston, that is just complete rubbish. The fact is this legislation has been on the Notice Paper longer than just about any other legislation that has been proposed since this government began its beneficent regime back in 1996. Indeed, in 1997-98 the Treasurer, Mr Costello, proposed in the second budget that he put to the House this very measure. The Senate first rejected this legislation on 8 August 2001. So the members of this place have already had an opportunity to examine in some detail the proposal and the policy behind the proposal that is being considered today.

Since then there have been some further improvements to the proposal being put to the House through the process of consultation that the government have put in place. In particular, the Association of Superannuation Funds of Australia and the Investment and Financial Services Association have been consulted. Employer groups—in particular, the Australian Chamber of Commerce and Industry—small business groups and those representing employee interests have also been consulted. The two concerns that were mentioned in that process of consultation—namely, the importance of reducing the burden of choice on employers whilst ensuring the key objective of greater choice of funds—were the principal focus of that process of consultation and that, I believe, has led to an improved piece of legislation coming before the House.

It was not just that process that led to an appreciation by the broader commercial community, by those superannuants who might be affected or by people who contribute to funds. Indeed, on 5 November 2001, in the document A Better Superannuation System, the coalition in a very clear statement put to the people of Australia the very measure that is now being proposed before this House. On 14 May last year the Assistant Treasurer put out a press release that detailed the measure that is now being considered. So the suggestion that there has been insufficient time or opportunity for those who might be affected by these measures to understand, comprehend, digest, comment on or be consulted about the measures is just complete rubbish. In addition to that, the government has contributed some $28.6 million to be spent over the next four years as part of a measure to assist in educational programs linked to the legislation. I commend the government and the minister for the presentation of these proposals. I suggest that the criticism by the opposition that they have had insufficient notice to comment on or be able to understand this legislation is completely empty and nonsensical.

The question then arises: what is the need for choice in a situation such as this? Under current arrangements there is no real choice for employees in relation to their superannuation fund. Employers deposit funds in appropriate, eligible funds as designated by the superannuation insurance scheme and relevant authorities, but also as a result of the choice of the employers. There is no choice for employees to determine the direction of the funds which make up the nest egg they are looking forward to when they retire.

One of the great things about being Australian is that we take care of our older people in ways that so many other countries do not. The superannuation legislation before the House, which this government strongly supports, is a very good example of the care that we have for older Australians and the respect that we have for the choices of older Australians, unlike those opposite who would rather dictate to those who make contributions to superannuation schemes and force them to go down a single track.

What is the reason for their position? What is the reason for their opposition to choice? At the end of the day we know that the real reason is that they are seeking to protect the trustees of union superannuation funds and the choices of the union bosses in relation to employees. That is what it is all about. It is all about protecting the livelihoods of the trustees of the superannuation funds and the little golden nest eggs that they have been looking after for years. There is no real choice for the workers of Australia in the policies of the Australian Labor Party. They are exposed again for their hypocrisy in opposing this important legislation.

There is an important basic principle at work here. I will give two examples that have affected me in my work in the electorate of Wentworth. The first example concerns a number of people who were employees of Ansett airlines before its unfortunate demise. Several people have come to my office in despair because the superannuation fund arrangements that were put in place by the employer immediately prior to the demise of the airline—and there were some very strange goings-on with the choice of superannuation funds by the board, if I may say so—have left their superannuation at real risk. In some cases it appears they might even lose the benefit of that superannuation. I know some steps have been taken to try to address that problem, but the fact that they have been at significant risk as a result of games being played by one or two senior managers of the board of Ansett immediately before its demise indicates that there is a real reason why employees in this country should be given greater respect in relation to choice of superannuation funds.

I have another example. Recently a person employed by a business up in Bondi Junction came to my office. He was very concerned because the company, which had set up a superannuation fund for him through its own internal arrangements, had scarpered with the funds. The arrangements that had been put in place by this corporation to supposedly protect the interests of this employee were completely non-existent. There was a fraud perpetrated on this employee. He knew that it was going on, and I knew that it was going on—or that it was about to happen or it had immediately happened; we were not too sure. Of course the matter was referred to the police. The problem was that he had no choice as to the direction of his superannuation funds. It was happening before his very eyes. All he could do was leave that business and go to another business, but that was not what he wanted to do. So this legislation is important because the choice that is afforded to workers is also a protection for them.

I know it is said by some in the union movement that workers do not need that sort of protection because they can join a union, but that point can be turned back on the union movement itself: if the union movement is really doing its job and looking after the interests of employees, it ought not to be recommending necessarily that those employees join a union superannuation fund—a union-governed or -dominated superannuation fund. There may be other choices for workers. I hope that as a result of this legislation union bosses have the courage, the moral rectitude and the sense of concern for workers and members of their union to advise employees in particular businesses, especially in small to medium sized businesses, that there is a choice, that they do not have to go into the union superannuation fund. I hope that, in the education process which the government is wisely putting in place, employees will be told about those possible choices. That is why this legislation, which at heart offers choice to Australian workers, is so important.

The member for Kingston said that not only does this legislation offer an unsafe choice—I think he called it the `unsafe choice' regime, and I have already dealt with that issue—but it does not offer an informed choice. But the whole point of the legislation is to afford workers the opportunity to have an informed choice. Let us take the union position. If the unions are doing their job, if the shopfloor steward or union delegate is really looking after the interests of the employees in a particular business, that delegate—that union—will be informing those staff members of the real choice that they have, and that information should include the alternatives.

There may be half a dozen substantial superannuation funds an employee can choose between. There may be some that are performing and some that are not. There may be some charging high fees, such as those charged—I think, inappropriately—at the moment by some superannuation funds, and some that are not. There may be some that are better managed than others. That will be the case, and that is why it is terribly important that the union delegates on the floor, the supervisors and so on, give the employees the information to be able to make that choice. So there is a reason, if people act properly, that informed choice will occur in the interests of employees and staff in particular businesses right across the nation, where there are unions.

Of course there will be some workplaces where there are no unions. In those places the education campaign that the government is putting in place will ensure that there is an informed choice for those people. There is information that will be going out, I understand, through the Australian Taxation Office. There will be material that will be distributed in accordance with what I have read in the explanatory memorandum—and I would recommend that all those who are interested in this examine that memorandum, because it sets out who will be entitled to receive that material.

The suggestion by the member for Kingston that this is an unsafe system is an empty criticism. The suggestion that it does not lead to an informed choice is hypocritical because it is a condemnation of the union movement, which is in a position to inform those workers of their entitlement to make a choice. I hope, and indeed I trust, that the workers of Australia, the 4.9-odd million people who will be affected by this legislation, will exercise a real and clear choice.

It has been said by the member for Kingston and others—using examples from Britain, Chile and other places around the world—that when choice of superannuation funds was opened up fees rose and management commissions were incurred. Even at entry and exit, there were costs imposed on superannuants and contributors. Indeed, when I look at the amendment proposed by Mr Cox, I see that one of the reasons that he gives—or that the opposition give—to oppose this legislation is that excessive entry and exit fees may be charged and that there is no incentive for a reduction in the fee structure. But that shows ignorance, if I may put it like that, of the way this legislation will work and the way the market will work in respect of fees.

One of the things that I am very concerned about at the moment in relation to managed funds is the fact that set fees of, say, up to 2½ per cent are charged on a capital fund under the management of trustees, directors or managers. For example, a flat fee of $5,000 may be charged on a $200,000 fund under the management of a trustee or manager. It seems to me that, by opening up the choice of superannuation funds, some pressure will be put on those managers to charge a more realistic fee, because people will have choice of funds. If they are not getting good value for money in relation to their nest egg—the money they will have when they retire—what will they do? They will not sit back and despair that they cannot do anything about it; they will make a choice. They might even ignore the recommendation of their union—that they should be in the union fund—when their money is being whittled away. They might decide in the interests of their family to put the money in a fund which they have information about—and there is plenty of information available from financial advisers—which will give a return to them and their family in their retirement. That is in the interests of their family and, ultimately, in the interests of all Australians.

Another matter that I want to mention concerns a criticism, as I perceived it, made by the opposition in relation to same-sex couples. It is an issue that is raised in the amendment put forward by the opposition. The amendment says:

(6) there is no provision to include same sex couples in the choice regime ...

This issue has been raised in debate before by both sides of the House, as has been recognised. But, with the greatest respect, as I read the legislation, it does not deprive same-sex couples of a choice. They can make a choice as to the superannuation regime by which they propose to have their funds managed and supervised. The choice as such does not involve any discrimination against same-sex couples. The logic of that is obvious, because one, two or more people in the same group may make the choice that is best suited to them. This legislation is not designed to recognise families or same-sex couples; it is designed to confer choice. It is disconcerting and silly of the opposition to make that sort of criticism of this legislation. If the opposition wish to propose such a measure, they should deal with it up front and in a more cogent fashion. Of course the rights of same-sex couples are important, but it does not seem to me that they are adversely affected by this legislation. It just does not deal with the question one way or the other, and it is not appropriate for it to do so.

In looking at the amendment proposed by the member for Kingston and the various reasons that he has put forward, I would like to finish by commenting on the part of the amendment that says there are no clear, simple and comparable disclosure provisions. When you look at part 2 of the legislation, you will see that it is the very opposite of what the member for Kingston has suggested. It is a very clear and simple procedure for any worker to make a choice of a superannuation fund that will be to his or her benefit. There are only two choices: an eligible fund which they may choose through a simple choice document, or a fund through an agreement which is reached with an employer. The choice is clear and simple. It just requires goodwill on the part of all those involved in workplaces around this country to make sure that it happens in the interests of all Australian families and all Australian contributors to superannuation. In that way, our older people will have an even greater choice of superannuation funds so they may enjoy the retirement which they deserve.