Ged Kearney MP
Federal Labor Member for Cooper
27 August 2020
I speak to you from the land of the Wurundjeri people of the Kulin nations, and I pay my respects to elders past, present and emerging. I congratulate the member for Hotham on a very fine summary of the situation that working Australians are facing right now and particularly with respect to the Liberal government's handling of superannuation.
As has been indicated, Labor supports the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020. It makes changes to the bring-forward rule for non-concessional superannuation contributions, to allow those at ages 65 and 66 to make up three years of concessional superannuation contributions. This is actually a sensible move by the government, which, to be honest, I struggled to say in all sincerity. It's a rare occasion that we can say this government is doing anything positive with respect to superannuation and, in particular, industry superannuation.
This government has spent hours and hours of this House's valuable time chasing rabbits down holes, trying to attack industry superannuation. I actually half expect the member for Goldstein to rush in here at any minute and say, 'Wait, no! It's all a bad mistake.' He'll say, 'Superannuation has connections to workers' wellbeing, to workers' savings.' My God, we're giving workers the chance to save and manage capital! That can't be good. Industry super, of course, has connections to—horror of horrors—workers' representatives, trade unions.
I'm going to take the opportunity here to say that trade unions represent around two million workers in this country. They are larger than any membership based organisation in Australia. Their hard-won enterprise bargain agreements, along with the awards system, cover over 60 per cent of workers in this country, protecting wages and conditions. That's a far bigger reach than the member for Goldstein's precious little IPA can claim. It's a piddling little dark evil corner of the country that produces mean-spirited men in suits trying to drag workers' conditions back to pre-industrial days of serfdom and slavery.
But, in all seriousness, my point is that superannuation is a Labor legacy. It has done a power of good for this nation. It is the envy of the world with respect to retirement savings schemes—and those opposite hate it—particularly industry superannuation funds, the most trusted and highly performing financial institutions in Australia.
As long as I can remember those in the Liberal Party have tried to destroy this institution. Just last week, I was watching a YouTube video of Paul Keating in this very House stand at that despatch box and speak to the legislation that set up nine per cent superannuation guarantee contributions. If you can, you should Google it. It's a fine example of Keating mastery. He had a vision for this country, one that we share—a vision for working people: one where workers could retire with twice the pension value. He spoke of how proud he was of our superannuation scheme and how it was way in advance of other countries. He spoke of it as the great reform it really was and he compared that with the coalition's mean-spirited need to—and I quote Paul Keating—'Kick working and poorer people in the teeth whenever they get the chance.'
Back then, when it became apparent that the Libs couldn't stop the superannuation guarantee being legislated, they tried to tax it out of existence, trying to whack an effective tax rate of 40 per cent on super savings, making it so unattractive as to turn people away from it. How stupid do they look now. Keating described how it was one of the most important large-scale mechanisms for the redistribution of wealth between generations. In fact, can you believe it, he quoted Michael Stutchbury, when Michael was a more progressive type, who said it would remove the 'demographic tug-of-war by setting up a funded scheme'. Mr Stutchbury seems to have been seduced by the dark side of economics since then but, nevertheless, Keating went on to say that it smoothed the onus of caring for our elderly across the generations, rather than leaving it to the younger generations coming behind, especially with respect to the baby boomer generation which has resulted in a growing ageing population who will rely on a smaller, younger income-earning cohort of taxpayers.
This government talk about intergenerational debt a lot and yet they want to dismantle the one institution that ensures the fairness of funding retirement costs by constantly attacking industry super. Time and time again, they come after the super funds, despite industry super being shown year after year to be the best place for workers' money to grow for retirement. Returns are the best. Just look up the top quartile funds and you'll see that most retail funds don't even put in a show. Yet, that is where this government wants workers' moneys to go, to their mates in the big banks who no-one trusts, whose practices were so bad that we needed a royal commission into their behaviour and who have hurt so many hard-working Australians living, and sadly dead, and, as we know, going after deceased person's money is not beyond them. No such behaviour was found to come from the industry funds, who sailed through the royal commission with flying colours.
So why do the government want to squander workers' money and condemn them to underfunded retirements? Well, other than helping their mates at the banks, it's because unions are involved in industry funds' governance structures. I reckon that's it, really—quite pathetic. Let's look at the facts. The boards of industry super funds do have union representatives on them. I myself had the honour of being a board member of HESTA and then Cbus. It's a great honour and responsibility to be one of the custodians of members' money, because I saw every member of those funds as my members. I was head of the nurses union when I was at HESTA. A huge proportion of nurses are members of HESTA. I still am. I took every decision that I had to make knowing that I had to answer to and was accountable to my members. When I was at Cbus, I was the President of the Australian Council of Trade Unions, so every union member was my member. That weighs heavily on one's shoulders—knowing that people have put their retirement savings in your hands. It's an extra level of accountability that for-profit directors don't have. The retail funds have to worry about shareholders first and retirees second.
But what those on the other side never mention to anyone is that employers also sit at those board tables. There is equal representation of workers and employers. You never hear that, do you? They on that side want to make it sound like it's all about unions. As a union rep, I'd have loved to have actually taken the credit for what is one of the most successful superannuation sectors in the world, but I can't take all of it, because employers—like MBA, the Victorian Chamber of Commerce and Industry, aged-care providers, private hospital associations, private building contractors and others—sit on the HESTA and Cbus boards. They are also making decisions about investments and governance of the funds. If the industry funds are as heinous as the Libs would have us believe, then so are their buddies on all those employer bodies.
Deputy Speaker, did you know that APRA monitor compliance of industry super with a fine-tooth comb, checking everything twice, like Santa? Nothing gets away from them. The level of scrutiny is beyond compare. It seems the compliance bodies could have done a better job with the banks' superannuation businesses, I might say, as we saw from the royal commission into the banks. The industry funds do well—far better than the retail for-profit funds. Trillions of dollars are now invested into industry super—workers' capital that is used for workers' and the community's benefit. And still the government come after the sector, trying to force them out of business, trying to break down governance arrangements or trying to stop the all-important insurance arrangements. Do you know that an average worker in the construction sector would not be able to afford insurance if it weren't for the buying power provided by the collective of Cbus? That means thousands of workers in an industry where they are more likely to be injured at work would be at risk of having no insurance at all if it weren't for their industry super fund. Those opposite might hate that. I'm proud of it, proud to say their livelihoods are protected by their fund. Like Paul Keating, I am proud of what we have created, what Labor and the trade union movement have created.
The coalition have delayed the SG increases needed to get the contribution up to 12 per cent, the amount of superannuation guarantee that is generally agreed will be needed for decent retirements. They don't support women accruing super when on paid maternity leave, a vital component of closing the gender pay gap. They're trying to stop workers bargaining for their own default fund. They tried to dismantle the default system, aiding and abetting the for-profit retail super funds in securing workers' retirement savings—to the workers' detriment, I might add—all while maintaining the very generous superannuation tax breaks for the wealthy. This means that the wealthiest one per cent of Australians, who already receive twice as much taxpayer support for their retirement income as the poorest 10 per cent, will continue to do so. Meanwhile the taxes paid by waiters, childcare workers, truck drivers and shop assistants will be subsidising the superannuation of the wealthy.
Labor has a very proud track record when it comes to superannuation. It came from those visionaries Keating, Hawke and Kelty. We will continue to fight for a fairer superannuation system and a stronger one. We on this side understand its value. To quote the shadow minister, the member for Whitlam, our universal superannuation, which is like a sovereign wealth fund but owned by the people, not the government, 'has $3 trillion in funds invested, and Australian workers have amassed the fourth-largest pool of pension savings in the world, equal to 140 per cent of GDP'. Superannuation has helped transform Australia from a country that borrowed from the rest of the world to one with substantial savings of its own. Make no mistake, if the opponents of universal super win, the consequence will be the destruction of jobs, the crippling of economic growth, and increasing taxes and a less secure future.
The Prime Minister's inability to subdue the wreckers in his own ranks puts us all at risk. The economic woes and challenges we faced before the pandemic crisis have not gone away; they've simply become worse and we've had to face a whole lot more. The challenge of funding pensions for an ageing population with a structurally weak budget is still alive; in fact, it's become greater. In a post-COVID environment, now more than ever, we will need to have a huge pool of money available to invest in jobs and growing the economy; to invest in innovation and development for industries like manufacturing, construction, infrastructure and biosciences; and to invest in innovation in health care, aged care and disability services.
If the government had a real plan for superannuation, they would not be tinkering around the edges. They would make it easier for trustees to invest members' contributions for the benefit of the country. We need a strong superannuation system, buttressed by stable and certain policy, with a mandate to invest for the long term in the national interest.
Authorised by Ged Kearney, Australian Labor Party, 159 High Street, Preston 3072