Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 1 June 2005
Page: 2

Mr HAYES (9:06 AM) —In continuing the remarks I was making last night on the Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 2005, I take the opportunity to remind members that I have a background in small business. I understand how small business feels when it is confronted with a new system and new paperwork.

Prior to the adjournment last night, I was saying that after reading the details of the superannuation choice scheme I was wondering what position I would have been in come 1 July. It is likely that I would have been in a position to sack my single employee without explanation as one of the businesses that would have been exempted from the unfair dismissal laws. That would be a particularly brave move on my part, given the fact that I have been married to my single employee for 29 years! Leaving that aside, it would seem that, come 1 July, I will not be able to discuss her superannuation choice or our future savings for retirement because that could be considered subject to sanctions.

Government members may scoff at the suggestion that small business is concerned about the introduction of choice but, to assure themselves that this is indeed the case, they need go no further than the Council of Small Business Organisations of Australia. In early May this year the council issued a media release titled ‘Penalties for super choice too harsh!’ The council expressed the deep concerns of its membership about the penalty regime imposed under the super choice scheme. I can understand their concerns. I do not know that anyone would like the prospect of a couple of years in jail for a few misplaced words in a conversation. The council’s media release said:

The Shadow Small Business Minister Mr Tony Burke is right when he calls for exemptions for small business.

It is not that I think that the Council of Small Business Organisations could be confused with the ACTU but it is interesting that the Council of Small Business Organisations does emphasise that Labor’s position of calling for an exemption is supported by small businesses across the country. It would seem that small business is genuinely concerned by the introduction of super choice and wants an exemption.

Naturally the media release prompted me to wonder about the government’s motivation for not granting the exemption. I would have thought that, with a group such as the Council of Small Business Organisations of Australia supporting Labor’s calls, there must be a sound reason for the government to ignore them. I dug through old statements by the minister to try to gain some insight as to why the government would not accede to the request of small business and grant an exemption, but the closest thing I found in my research was a statement by a spokeswoman for the Minister for Revenue and Assistant Treasurer. It said:

Exempting small business from offering choice would just create a competitive disadvantage for small business in a tight labour market.

As a small business person, I do not know what that means and neither do the very small business operators in Liverpool who I had the privilege to address recently. While calls from COSBOA may not be enough to convince members opposite to support Labor’s amendments, there are a number of other concerns that must be raised about this scheme.

Most people are well aware that the superannuation industry is a multibillion dollar industry. Recently I saw reports that estimated the assets of the superannuation industry to be in the order of $750 billion, which is a considerable sum by anybody’s standards. The handling of those considerable assets requires management and funds management brings with it fees and charges. Annual revenue from these fees and charges on the management of superannuation funds has been estimated to be between $5 billion and $10 billion—another significant sum.

Superannuation choice introduces a new dimension to retirement savings in Australia. The government has managed to bring together the finance and funds management industries and employees to make decisions on considerable financial holdings of workers with less than full information available to them. It was not all that long ago that people were very concerned because their superannuation funds had fallen. If things go bad again, I am sure government will wash its hands very quickly of this situation and hide behind the excuse that, after all, it was the employees’ choice—that they had the right to choose where their funds went and that whether or not they chose a successful fund was in their hands.

Small businesses must be exempted from super choice. They are concerned about its impact on their business and they are concerned about what might happen to their employees’ retirement savings. Small business operators will be overwhelmed by paperwork as a consequence of this scheme. That is what I find so amazing about the government’s refusal to exclude small business from the choice provisions. This government—the self-appointed best friend of small business—is going to increase the pressure on small business owners. Owners who are already spending many hours every week trying to comply with the ‘simplified tax system’ will have to deal with this as well.

Some time ago I reviewed the government’s document titled ‘Committed to small business’. This document, released last year, outlined the government’s commitment to small business and what it had done to free up small business owners and operators so they could concentrate on growing their businesses. The document went to great lengths to praise the work of small business, to inform us of their contribution to the economy and to report that the government’s commitment to small business had not diminished—noble sentiments that have not been borne out by the government’s position on superannuation choice. The document reported that it has been a priority of the government since its election in 1996 to reduce red tape and that it has made inroads into improving regulatory oversight applying to small business. It included the following statement:

The Government is committed to streamlined, cost effective regulation that does not impose unnecessary paperwork or other compliance costs upon small business. The Government will continue to be responsive to small business needs and concerns on these issues.”

I guess that along with super choice has now come a super change in policy. Super choice is the essence of unnecessary paperwork for small business. The government’s small business policy has undergone somewhat of a change. I guess the great friend of small business owners has now seen fit to abandon them.

Small business owners can handle a fair bit. We have to. In the main we do not enjoy the luxury of having finance departments to take care of the bookwork. We do not have human resource departments to take care of occupational health and safety, or superannuation departments to fill in and comply with the distribution of superannuation forms. For the most part, doing all this in a small business is the sole province of the small business owner and operator. Small business owners can handle having a relatively simple three-step process replaced with a 34-step process, if they have to. Small business owners can handle the extra paperwork associated with superannuation choice and the various aspects of superannuation funds, if they have to. But they do not have to. Government members have a choice. They can live up to their commitment to reduce unnecessary paperwork and compliance burdens on small business by supporting the opposition’s amendment. Members opposite must support the small business call and the call of the opposition to exempt small business from superannuation choice.