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Tuesday, 25 August 2020
Page: 5483

Mr STEPHEN JONES (Whitlam) (17:42): A few moments ago government members filed into this place and voted against their own election commitment. I found it extraordinary. The only explanation that I can conjure up to explain what has gone on is that they didn't understand what they were voting for. I'd like to give them the opportunity to reconsider that by putting forward a similar set of amendments in the second reading debate on this bill that concerns superannuation. I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House calls on the Government to ensure that all Australians can enjoy a dignified retirement, including by committing to:

1. the scheduled and legislated increases to the superannuation guarantee; and

2. adequate funding for the aged pension".

This bill has a grandiose title. 'More Flexible Superannuation' hides a very simple measure. Who could possibly oppose a bill entitled More Flexible Superannuation? In this case, not us. The member for Goldstein will be delighted. The bill amends the Income Tax Assessment Act 1997 to extend access to the superannuation bring-forward arrangements to people aged 65 and 66 from 1 July 2020 to better reflect the changing nature of work. That is to say it's a minor fixer to align the maximum age in one piece of legislation with the current pension age. It's sensible and it should enjoy our support, although I am going to come back to that point about the change in the pension age. It is worth the House focusing on that for a moment and in a moment.

So we're going to support the bill. But it does say something about the government that one of their highest priorities during the global pandemic and economic crisis is to make it easier for people with significant assets to make large, non-concessional contributions to their superannuation account. It's not a fix for our beleaguered aged-care system. It's not helping businesses and universities build jobs. And it isn't going to help plug the massive holes that this government has punched in our superannuation system, particularly for the 600,000 young Australians who have had to access their superannuation accounts—

Mr Tim Wilson interjecting

Mr STEPHEN JONES: for want of any—

Mr Tim Wilson interjecting

The DEPUTY SPEAKER ( Mr Vasta ): Order!

Mr STEPHEN JONES: other sufficient support from the government—sufficient and timely support.

Mr Tim Wilson interjecting

Mr STEPHEN JONES: I note that the member for Goldstein has got a lot to say in this debate and I also note that he's placed himself on the speakers list, Mr Deputy Speaker Vasta. He'll get his go. He's got a lot to say in respect of me, but I have to say this: I am not the member for Goldstein's biggest enemy in this House. The biggest enemy of the member of Goldstein in this House sits just in front of him—and he's been very, very busy, I've got to say, attending to branch-stacking in the member for Goldstein's seat and the member for Flinders' seat, trying to rearrange the order of votes in the Senate preselection. He's too busy dealing with all these things to deal with the matters that are in his portfolio.

Mr Tim Wilson interjecting

The DEPUTY SPEAKER: Order! The member for Whitlam has the call and he'll be relevant to the topic.

Mr STEPHEN JONES: I'll be as relevant as the member for Goldstein is silent. It sounds like a fair trade.

The DEPUTY SPEAKER: The member for Whitlam will be heard in silence.

Mr STEPHEN JONES: When former Prime Minister Paul Keating established the compulsory superannuation system, the universal superannuation system, he viewed it, and we view it, as an investment in the nation's future, and that's exactly what it has become: Australian workers owning retirement savings investments, building a pool of national savings in the national interest but also in the interests of ordinary Australians for their retirement savings.

It is relevant and on point that this bill is aimed at addressing an anomaly between the superannuation tax administration arrangements acts, superannuation acts, and the adjustment in the pension age. The pension age has been adjusted from 65 and 66 through to 67. What this reflects is the fact that Australians are now living longer, and it also reflects the fact that we have an ageing population.

This is apposite to the second reading amendment, because prior to former Prime Minister Paul Keating, together with former Prime Minister Bob Hawke, establishing the universal superannuation system—beginning in 1985-86 with Accord Mark II through the award system—30 per cent of Australians had access to superannuation. We had a name for them: men. Women had very little superannuation. Less than 20 per cent of women in the workforce had access to superannuation. Superannuation prior to that was something that was available to salaried men in the workforce, and not really available to the rest of the workforce. That one move, extending it to award superannuation, expanded superannuation coverage of the workforce from around 30 per cent to close to 50 per cent inside of a year, growing again to 60 per cent within another year or two. But it was the superannuation guarantee legislation of 1992 which extended universal superannuation to the entire workforce. As a result of that decision, Australians now have a tax assisted means of saving for their retirement.

Members opposite will often say that it is their money; they should be able to do with it what they like. It is absolutely members' money, not one dollar of which would exist in a member's superannuation account if we had listened to members opposite—not one dollar of it!

They opposed it in 1985 and 1986, when Accord Mark II was struck, and they have opposed every single dollar of superannuation that has gone into workers' superannuation accounts, from the first moment until today. Nothing is more galling to those of us who have followed the passage of superannuation from its very beginning, and have been consistent in our advocacy for workers' superannuation, than hearing those opposite try to pretend that they are champions of individual workers' superannuation, when they have opposed every single cent of it. Those three million Australians who have accessed their superannuation through the early access scheme have the architects of superannuation, Australian Labor, to thank for that, not this mob over here, because not one cent of it would have existed in those accounts if they'd listened to the ranting and the railing of those members opposite. Yes, it is their money, and it's there because Australian Labor had the foresight and the courage to push through the opposition of those opposite, to push through the opposition of the coalition parties, to ensure that workers in this country had access to the same sorts of superannuation arrangements that the salaried men had enjoyed for decades.

I want to talk a little bit about the ageing population. When the Keating government initiated the superannuation guarantee levy, the ratio of workers to retirees sat at around 6½ or seven to one. That is to say, for every one retiree, there were six to seven people within the workforce, with their tax contributions funding, amongst other things, the pension payments of those retirees. We knew back in 1985 that, with the demographic shift, the ageing population, it was simply going to be unaffordable down the track, without significant tax increases or significant reductions in pension payments, for Australia to be able to provide a level of pension payments that was going to keep pace with cost-of-living increases and the expectations of Australians for a dignified retirement. We knew that to be true when the ratio of retirees to workers was one to six.

An honourable member interjecting

The DEPUTY SPEAKER ( Mr Vasta ): Order! The member for Whitlam will be heard in silence.

Mr STEPHEN JONES: So we put in place a system of tax preferred savings, preserved until retirement age so that the trustees of those funds could invest that money in good investments to deliver the sorts of returns over the long run—the excellent returns—that superannuation members enjoy today, somewhere in the vicinity of six to seven per cent real. That is what they are enjoying through their superannuation investments today, and they have enjoyed that consistently for most of the last 10 years if they're in a good fund. If their fund is not delivering those sorts of returns, they should seriously consider switching to a fund which does, because that's what they should have been enjoying over the last 10 years.

Back then, there was a ratio of six to one. Wind forward to 2010, and the ratio of workers to retirees had dropped to five to one—that is to say, five workers for every one retiree. Move forward another 10 years, and the ratio of workers to retirees has dropped again, to four to one. By the time we hit 2030, when many of these people, particularly the younger ones—perhaps not the member for McMahon and me but some of the younger ones—will still be here, that ratio of worker to retiree will have dropped to three to one.

Mr Bowen: We're still borderline millennials!

Mr STEPHEN JONES: We are still borderline millennials, you and me, Member for McMahon! That ratio, by 2030, will have dropped to around three to one. So we've got some tough decisions to make. Do we say to our grandkids: 'We're going to drop the ball on superannuation. We are going to drop the ball on self-reliance'—self-reliance used to be a Liberal Party value—'We're going to drop the ball on preparing our country for the future and leave it to our grandkids'? Are we going to put it on the tick and say, 'Darling, can you pick up the bill'? That is literally what they are arguing: don't worry about it; the grandkids can pick up the bill. The ratio of workers to retirees will be one to three.

We don't think that's fair, and on this side of the House we want to maintain a system that is designed to ensure that workers—all workers, not just the privileged ones—have access to a dignified retirement. That was the purpose of superannuation in the first place. I have heard members opposite argue, from time to time, 'Superannuation should be treated as any other bank account.' Let me walk you through a couple of reasons why that is absolute rubbish and how all workers will be worse off if that proposition ever sees the light of day. Let's look at the rate of return that superannuation has enjoyed over the last 10 years. On average, it's six to seven per cent, in some funds closer to eight, per annum over the last 10 years.

Find me a bank that is offering that sort of a rate of return even on a long-term deposit. You can't. Look at the medium-term deposit returns you're getting on a bank investment today. They're somewhere closer to two per cent, and probably closer to one per cent, at the moment, than six, seven or eight per cent. There's a very good reason for that: banks hold cash on demand. It's not invested for 10, 15, 20, 40 or 50 years. It's banked and held on demand, and it can be drawn down very quickly. The banks can't be investing in the long term and can't be getting the sorts of returns that a patient investor, like a superannuation trust, can get, because that's not what they're set up to do. They're set up to have cash on demand. They're set up for a very different purpose. These nongs opposite argue, 'Let's treat superannuation just like a bank account.' You can treat superannuation like a bank account, but you'll get the same sort of return you get in your bank account as well—probably seven or eight per cent less than you're getting today. If that's seriously what they're arguing, they'll be devastating the savings returns for ordinary Australian workers.

Let me say something else about this for those who try and say superannuation money is just like any other money and should be treated the same. It attracts tax preference: 15 per cent on the way in, 15 per cent on the returns of the fund and, if held to preservation date, nothing on the way out. There is no other class of income or investment that attracts the sorts of preferential treatments that superannuation does. It attracts those preferential treatments because we want to encourage people, incentivise people, to save for their retirement. So there's a very good reason that it's not treated like any other money, although some of those nongs over there are trying to convince people it is. I withdraw, Deputy Speaker. It was most unkind of me and to the nongs of this world.

Some of those people are trying to say, 'Let's just treat it like any other bank account.' It would absolutely devastate your savings and the investments of those superannuation funds. It's not the banks that are investing for the long term in our port infrastructures, our airports, our highways, the long-term infrastructure of this country, that require an investment not over one, two or three years or even 10 or 15 years but over 30 and 40 years. Banks play a good role but it's the superannuation funds and that patient capital that's doing the long-term investment, the long-term returns, and delivering excellent outcomes not just for the fund members but for the country.

Jobs, economic growth, putting ballast into business investment, which has fallen off a cliff under those guys over there—superannuation funds are the key to all of that. They want to pull it all apart. Individuals will be worse off, the economy will be worse off, pensions will go down, taxes will go up and retirement incomes will be absolutely devastated. It would be hard to find a government that had a greater grudge against retirees and elderly people than this one. They have frozen your pensions. Labor indexed pensions. These guys opposed it and tried to wind it back and now they have frozen it. They are kicking the guts out of superannuation because they don't understand it or they don't believe in it. It wasn't their idea, so there is intellectual jealousy. They are freezing your pensions and kicking the guts out of superannuation and aged care.

If you were to receive a report from a royal commission that told you that between 30 and 50 per cent of residents in aged-care facilities were malnourished—the technical term is 'starving'—would you sit on that report? Would you sit on that report for nine months, as the hapless aged-care minister has done, supported by this government? No, you wouldn't. You'd act. You'd ensure that those aged-care facilities received the funding, the support, the regulation and the oversight that our senior citizens so dearly deserve. I can't see the heart in this government. They are absolutely heartless—devastating for individuals. But there you have it in one. You've got their trifecta: kicking the guts out of the pension system, ripping the heart out of superannuation and being absolutely heartless when it comes to aged care in this country. That's the trifecta that you're getting from this government.

We give them the opportunity to repent. We give them the opportunity to do a very simple thing—to come in here and vote in favour of their own election commitments. It's a very simple thing. We give all of them over there the opportunity to come in here and vote in favour of their own election commitments. It's actually much more than that. We're asking them to vote in a way that supports a recovery from the economic recession that this government is making ever so much worse, ensuring that we have the basis on which to build an economy and growth into the future; that we aren't kicking the can down the road on the cost of pensions and an ageing population; and that we aren't saying to our kids, 'We're putting it on the tick and you're going to pick up the bill. We'll be long gone and you guys are going to have to pick up the bill.' It didn't used to be Liberal ideology that the answer to everything was to put it on the taxpayer and we'll pay for it down the road. But, surprisingly, it seems to be today.

We are going to oppose them every step of the way. We are going to invite them to vote in favour of their own election commitment when they consider the vote on my second reading amendment. Apart from that, we'll be supporting the legislation. We encourage the government to do the right thing by the retirees of this country, like the right thing by people living in aged-care facilities. We've got a lot of work to do to recover from this economic recession that this mob are making so much worse. Kicking the guts out of superannuation is not the right way to go.

The DEPUTY SPEAKER ( Mr Vasta ): Is the amendment seconded?

Mr Keogh: I second the motion and reserve my right to speak.

The DEPUTY SPEAKER: The original question was that this bill be read a second time. To this the honourable member for Whitlam has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House I will state the question in the form that the words proposed to be omitted stand part of the question.