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Thursday, 12 September 2019
Page: 2762

Mr PERRETT (Moreton) (11:12): I rise to speak on the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019. This bill is technical and non-controversial. Labor supports the bill, and I support also the amendment moved by the member for Kingsford Smith. One of the measures contained in the bill will amend the Superannuation Guarantee (Administration) Act 1992 to allow individuals to avoid unintentionally breaching their concessional contributions cap when they are employed by more than one employer. Another of the measures will tighten the rules relating to non-arms-length expenditure of superannuation funds. These are all sensible amendments.

A previous version of this bill was introduced during the 45th Parliament but lapsed when parliament was prorogued. The previous bill was examined by a Senate inquiry. Labor members on that inquiry did not oppose the non-controversial amendments that are included in the current bill. However, the previous version of the bill included an additional schedule of amendments that would have introduced a superannuation guarantee amnesty. Labor senators on the inquiry into that version of the bill were concerned about that measure, as would be all sensible Australians who want to have a decent retirement. Evidence to the inquiry revealed a lack of stakeholder advocacy for the amnesty and concerns that the amnesty could even be counterproductive to broader compliance efforts. Labor senators made comments about that measure. Superannuation theft is just as bad as wages theft. Dodgy employers should not be able to get away with stealing their employees' hard-earned money. I'm glad that schedule has not been included in the bill that is before the House.

The Australian Labor Party is rightly proud of Australia's superannuation system. It is one of our most significant financial and social reforms. The Keating government's brave reforms, way back in 1992, introducing the compulsory employer contribution scheme will continue to have life-changing impacts on Australians as they age and enter retirement. And, sadly, Australia's population is ageing; there is no denying it. In 2017 there were 3,794,062 Australians who were over 65. They accounted for 15 per cent of the population. It's estimated that by 2057—not that far away—there'll be 8,799,475 people aged over 65. They will account for 22 per cent of the population—so a jump from 15 per cent up to 22 per cent. It's because of the foresight of the Keating Labor government that many of those Australians will have a comfortable retirement funded through their own superannuation funds. Older Australians deserve a dignified and comfortable retirement, so Labor will always support sensible reform to Australia's superannuation system.

There are currently over 15 million members of Australia's superannuation system, and over 80 per cent of Australians aged 25 to 54 hold a superannuation account. There are around 28 million superannuation accounts in Australia. To break down the funds: there are 217 institutional funds, which can be broken down into 38 industry funds, 37 public-sector funds, 24 corporate funds and 118 retail funds. And then there are 517,000 self-managed funds with nearly $700 billion in assets. The Australian superannuation system currently manages over $2.8 trillion in assets, now more than 140 per cent of our GDP. By 2035, the superannuation system will be nudging $10 trillion. Under current settings, the median balance on retirement for full-time workers will be about $310,000 for women and $628,000 for men. For median workers, the average annual retirement income will be $28,000 for women and nearly $34,000 for men. For those women, that is only 65 per cent of the ASFA comfortable retirement income standard, and for those men it is 79 per cent of the ASFA comfortable retirement income standard. But it's even worse for workers who fall in the bottom 10 per cent of income distribution. Women in that category will be only 21 per cent better off than they would be if they were receiving the age pension, and men in that category will be 37 per cent better off. I'll come back to that gender gap in a minute.

Although our superannuation system is working for many—for most, even—it's unfortunately leaving some behind. The superannuation guarantee is currently legislated to increase to 12 per cent by the year 2025. For average workers, the balance on retirement for median workers will rise by 20 per cent for men and 19 per cent for women. The poorest workers, those in the bottom 10 per cent of the income distribution scale, will retire with an additional 30 per cent in accumulated super. For those workers this will make a substantial difference to their comfort and health, obviously, when it comes to their retirement.

The success of Australia's superannuation system relies on employers paying the superannuation of their employees. It's a simple contract, a simple concept. But, sadly, underpayment of superannuation by employers is a significant issue in Australia. You might have seen the television ads, Madam Deputy Speaker Bird. Industry Super Australia estimates that 2.85 million Australians have been underpaid—nearly three million Australians out of a population of 25 million—and that the underpayment amounted to $5.9 billion of their superannuation entitlement. This is a very significant problem, and it is increasing. Superannuation theft increased by 25 per cent over the three years from 2013-14 to 2016-17.

As I mentioned earlier, the amount of superannuation accumulated by women is considerably less than that accumulated by men. The average balance for men is 63 per cent higher than that for women. It is worse for older Australians nearing retirement, where the average balance for men is 72 per cent higher than that for women. Of those people nearing retirement without any superannuation, 13 per cent of men in the 60 to 64 age group are without any superannuation and 23 per cent of women in that age group are without any superannuation. The superannuation system currently is not working as well as it needs to for women. So I hope that the Morrison government has a plan to address this issue.

Too many Australian women are retiring into poverty. Older women, and particularly single women, are at a greater risk of experiencing poverty and homelessness in retirement. By the time they are 60, 34 per cent of single women in Australia live in poverty. Labor took to the election a plan to boost women's superannuation balances by paying the superannuation guarantee on paid parental leave, making it easier for employers to pay extra superannuation to women. Obviously, this is something that the government might look at, in terms of looking after women when it comes to boosting their superannuation balances as they retire.

More generally, while the superannuation system delivers strong returns for many Australians, many other Australians are trapped in persistently underperforming superannuation funds—not the industry funds, I would point out. As we heard during the royal commission, the industry funds have that perfect mix of employers and employees, outperforming, on a general level, always by one or two per cent and sometimes even more. Industry funds are lean and have made some strategic investments, particularly in infrastructure, not just in Australia but around the world. They've been doing great stuff. I urge them, as I've done privately in meetings, to perhaps start looking at the growing middle class in Asia, a region we have close contacts with, and start investing some of those $3 trillion in funds in income-generating infrastructure in some of those countries—perhaps our ASEAN neighbours. I know there's a risk consideration, but I look forward to funds like QSuper, who I had a meeting with about this a while ago, investing in some of those Asian nations to make sure we've got plenty of retirement options far over the horizon.

There are at least $269 billion in assets and five million members stuck in underperforming funds—as I said, not the industry funds. The superannuation fees are higher in Australia than those in other comparable OECD countries. Australians pay more than $30 billion a year in superannuation administration fees, which is 1.1 per cent of the total assets. So Labor supports the amendments in the bill before the House, but there's much more to be done in the superannuation space. I hope the government acts to improve the superannuation system so that all Australians can retire with dignity. I commend the bill to the House.