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Thursday, 13 February 2020
Page: 994


Senator McCARTHY (Northern TerritoryDeputy Opposition Whip in the Senate) (12:53): Labor certainly has some issues with the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019. Noncompliance with the superannuation guarantee is a form of wage theft. When an employer forgoes paying superannuation to their employee, they are taking what was legally owed to the employee. This legislation implements an amnesty for employers who voluntarily disclose they are not compliant with superannuation guarantee requirements—in other words, the employers have not met their legal requirements to pay their workers what they are owed. It's not that workers haven't received a bonus or a windfall; it's their legally owed entitlement. Workers who have superannuation entitlements stolen by their employers are left facing an insecure retirement without their superannuation payments. In the 26 years the amnesty covers, many workers have retired or are nearing retirement with a superannuation balance that leaves them struggling on the meagre age pension.

These workers should have been able to draw upon their superannuation as they entered retirement, with the ability to improve their standard of living relative to relying solely on the age pension. Fifteen million Australians hold superannuation accounts. Most of these funds are performing pretty well, with 16 per cent per annum average return over the last 10 years. There are around $2.8 trillion in assets, and that's more than 140 per cent of gross domestic product. Under the current settings, that will grow to $9.5 trillion by 2035, expanding the pool of funds available for investment in local infrastructure and providing a stream of earnings from foreign investments.

The success and popularity of super don't mean the system doesn't have issues that need to be dealt with. Unpaid superannuation totalling almost $6 billion per annum is one of those issues. It is a massive problem. Industry Superannuation Australia estimates that 2.4 million workers are losing in the vicinity of $5.6 billion in payments each year. The Australian tax office takes a slightly different view. It says the amount is roughly half that. Whichever view of this you take, what is certain is that somewhere between $3 billion a year and $5.6 billion a year owed to workers' superannuation accounts is being lost. That's equal to those workers losing $2,000 per year which should be going into retirement savings. Superannuation is part of a worker's pay and conditions. Every worker deserves and is entitled to receive their superannuation as a matter of law.

I'd like to touch on the particular issue of superannuation in relation to First Nations people. While the Australian superannuation system was designed with the intention of benefiting all Australians, the unique needs of First Nations people are often overlooked by superannuation policymakers and the industry. Last week, First Nations advocate and academic Terry Mason wrote a thought-provoking piece, on the IndigenousX platform, regarding many of the issues around our superannuation system. It's timely during this week when we are focusing on closing the gap. Mr Mason said:

… the continuing failure of the Close the Gap initiative has brought into closer focus the inequity in a fixed statutory age for retirement and access to superannuation for First Nations Peoples.

In other words, should First Nations peoples 'be able to gain voluntary early access to retirement, pension and superannuation' as our shorter life expectancies mean we have less opportunity to enjoy superannuation after retirement? He added:

Most of us will be lucky to live long enough to reach retirement age. Particularly so with the government's move to raise the age of retirement in the future.

First Nations people, on average, are employed in lower-earning-capacity positions, and this work is often casual or part time. The average retirement income is 27 per cent less than that of non-Indigenous Australians, and First Nations women face even worse superannuation outcomes. Discriminatory policies, such as CDP, add to this disparity in retirement incomes. CDP participants are not covered by the Fair Work Act, they don't have federal OHS protections or workers compensation, and they can't take annual leave, sick leave or carers leave. This also means that they may work for a for-profit business but not receive superannuation.

The Australian Council of Trade Unions has five priorities in the Our voice, our future report concerning First Nations peoples. One of them deals with retirement savings. It calls, amongst other things, for 'a reduction in the statutory retirement age and superannuation access age for Aboriginal and Torres Strait Islander workers which reflects the life expectancy gap' and 'a review of the tax-free threshold status in conjunction with a reduction in the statutory age for accessing superannuation'. Government needs to remove the impediments to voluntary early access to superannuation funds. First Nations people deserve to be able to enjoy quality time in their elder years in a financially stable position, and these elder years may be younger than for the rest of the population due to no fault of theirs.

I'd also like to touch on some strong work and advocacy being done by the First Nations Foundation with respect to superannuation issues. The foundation is committed to increasing financial literacy and skills in First Nations communities, and this includes supporting people to take control of and understand their super. They work across four key areas, which they define as: find it, grow it, protect it and plan it. When it comes to 'find it', they're certainly achieving some pretty amazing results. The First Nations Foundation, which is basically a tiny charity, has so far managed to find $24 million in Indigenous superannuation in 21 Indigenous communities across six states. That's $24 million of Indigenous superannuation that they've found. That's money that was previously sitting with the ATO. Combining with a specialist team of people from the then Department of Human Services, the Australian Taxation Office and 14 superannuation fund volunteers, the First Nations Foundation led 45 people to seven communities last year. They visited Darwin, Kununurra, Broome, Gapuwiyak in north-east Arnhem Land, Galiwin'ku, Milingimbi and Ramingining. They brought in financial counsellors and engaged with community members at events they call the Big Super Day Out. It's well worth getting across that one, Minister.

To give you an idea of the work that happens at these events, they saw one man with no ID who learned he had money in four different superannuation accounts worth $17,000. As he was over the preservation age, he was able to walk out the door knowing that money would be in his bank account the very next day. Then there was the man whose permanent injury meant he could no longer work. A search for his superannuation revealed he'd had insurance linked to it and was possibly entitled to a claim of about $600,000, which would cover the modifications his home needed and his ongoing expenses. Extrapolate that to the wider First Nations workforce and you could see $1 billion brought back to the homes of First Nations people.

There is an enormous amount of work to do in the areas of financial literacy management and policy in terms of First Nations peoples. Developing a fairer superannuation system, with the flexibility to respond to the needs of particular sectors while ensuring everyone receives what they're entitled to, is something we should be turning our attention to.