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Tuesday, 11 February 2020
Page: 800


Mr VAN MANEN (FordeChief Government Whip) (13:07): It's always a pleasure to follow the member for Whitlam and his comments in this space. Whilst I'm sure there's stuff in the financial services sector—as he well knows—that we would agree on, there's also much we would disagree on. There's nothing more important to me than to see the efforts of this government and the work we're doing in tidying up the superannuation system to remove unnecessary and costly fees that eat away at the retirement savings of hardworking Australians. That's why I'm pleased to be speaking on this bill, the Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020. Again, this bill builds on a number of previous pieces of legislation and seeks to further protect the retirement savings of hardworking Australians by closing down eligible rollover funds.

The role of ERFs, historically, was to be a temporary holding fund for lost, small or inactive superannuation accounts, but that has significantly declined or diminished over recent times. The unclaimed superannuation policies put in place by this government through the Protecting Your Superannuation Package changes mean that small, inactive accounts that may otherwise have been paid to ERFs are now paid directly to the ATO. We know our reforms are working, and this bill seeks to ensure that more and more Australians are reunited with their super so they can continue to grow their nest egg for retirement. Since our Protecting Your Superannuation Package reforms became a reality at the end of 2018, the ATO has reunited more than 2.13 million lost or forgotten superannuation accounts, worth around $2.8 billion, with their rightful owners, and this bill seeks to increase those numbers even further.

Another reason to support this bill is to ensure that, by having a single superannuation account rather than multiple accounts, people are not getting charged additional or questionable fees and seeing their savings eroded.

The ATO's data-matching program has achieved far better results than those of the ERFs over past years. The House of Representatives Standing Committee on Economics recently heard that some superannuation funds may be transferring accounts to ERFs to circumvent the government's Protecting Your Superannuation changes. The committee heard evidence that some ERFs recently received an influx of accounts from some superannuation fund administrators ahead of the 31 October 2019 deadline for funds to transfer inactive low-balance accounts to the ATO. This is a blatant attempt from the superannuation industry to repudiate the government's reforms and efforts to reunite Australians with their lost super, in a last-ditch effort to charge more fees. Interestingly, I heard nothing from the member for Whitlam on this activity.

These activities by these super funds hurt Australians most likely to benefit from our reforms, including young people who often have multiple jobs and, as a result, multiple superannuation accounts. We all know the impact of high fees in the long run on people's superannuation balances. We all know too well how much worse off Australians are in the long run due to the higher fees charged in underperforming ERFs. Fund managers and administrators love these funds because they know can make more and more money from members through these funds, and they rush to ensure they can squeeze every last cent possible from hardworking Australians. They increased their funds under management in the ERFs by an estimated $700 million in the June quarter of 2019 alone, to a total of around $4 billion in ERFs, where previously these had been trending downwards. This is a disgusting and despicable move by super funds, despite there being a more efficient facility in place through the ATO to unite people with their lost super. The government is making these changes to ensure that the funds that people have accumulated through their hard work are all accumulated in one place, in one super fund.

As I've said before, the role of ERFs was already diminishing as a result of our changes, and now they will be closed in a timely and efficient manner. To facilitate this exit, the bill allows trustees of ERFs to voluntarily transfer any amount to the ATO, broadening the current arrangement where ERFs can only send accounts to the ATO if they meet specific conditions. The bill also includes a requirement to transfer all accounts below $6,000 to the ATO by 30 June 2020 and all remaining accounts to the ATO by 30 June 2021. This effectively facilitates the exit of ERFs from the market by the middle of 2021.

We want to make it as easy as possible for Australians to be reunited with their super, and this bill goes a long way towards delivering the necessary reforms to benefit Australians now and in their retirement. Once transferred to the ATO, the ATO will be able to use its superior suite of data-matching tools to reunite these accounts with members' active superannuation accounts. By reuniting these lost accounts with their rightful owners, members will benefit from higher account balances and no longer having to pay multiple sets of fees and, in some cases, having to pay for insurance policies. This legislation will benefit many people in my electorate of Forde—not just young people but many people who work part-time or intermittent work across the age brackets—who have multiple low-balance superannuation accounts. Our reforms seek to benefit them in the long run to ensure they have a strong and secure nest egg in their retirement.

This bill gives effect to the recommendations of the Productivity Commission, which specifically recommended that APRA oversee the exit of ERFs from the market within three years. Unlike those opposite, we on this side of the House won't continue to run a protection racket for the superannuation industry. Instead, we are continuing to focus on how we can improve the superannuation industry for the benefit of everyday Australians who are seeking to grow their wealth through superannuation for their retirement.

We will continue to reform the sector and build on our record of protecting members in the system, giving the sector greater clarity and moving towards what's really working for members now and into the future. We will continue to stand with hardworking everyday Australians when it comes to their superannuation because we want to ensure members have more money, more security and more freedom in their retirement and old age, not less. This bill goes the next step to further protecting the superannuation balances of members across this country. I support this bill in its unamended form, given the pious amendment put forward by the member for Whitlam.