Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012
It was interesting to listen to the member for North Sydney. With all due respect to him, it is extraordinary that the coalition always default to the reds under the bed scenario when they have objections to what this side of the House is doing—it is default to the fifties. While I agree with him that The Hunt for Red October is one of the great movies, and I enjoyed watching it again last night—for the hundredth time, as I told my husband—I do take issue with the claim that this government is a red under the bed and akin to a Soviet government. We are the party which has, when in government, implemented massive reform in every area of this nation. In the eighties we liberalised and deregulated the economy. That set us up for the great prosperity we enjoy today. One of the fabulous reforms we introduced then, and which we are now improving, was superannuation. And that is what I am here to discuss.
It was also interesting to hear the minister talk about some of the improvements industry is engaging in— embracing the reform program we are implementing. These reforms on superannuation are incredibly important for Australians. Our superannuation system has transformed the way Australians now approach saving for their retirement. What I am finding so heartening is the fact that younger people, who have their working lives ahead of them and who do not traditionally focus on what life will be like when they retire, are now taking an interest in these issues. I know that when I first began my working life, issues such as super—not that super was really around then—and what savings provisions I had in place were not really front of mind. I was more focused on getting educated and then saving up for a house. Now we are finding that young people are starting to focus on their super and their retirement, and we are particularly finding that in the broader community. But more work needs to be done and that is what we are trying to do with these reforms and improvements we are talking about today.
I am a very strong advocate of superannuation and I have been actively working in my community to ensure that people understand their superannuation and also, most importantly, gain a greater financial literacy and a greater understanding of their financial affairs. With the Parliamentary Secretary to the Treasurer, I have held in my electorate financial literacy seminars which have been incredibly well-received. I again thank the parliamentary secretary for that. We received incredibly erudite and well-considered questions from the Canberra community. I have also held a number of small business seminars on how to set up a small business, with colleagues of mine from around Canberra. Next year—I was hoping to do it this year but have run out of time—I will be holding a number of seminars on how to read your superannuation and financial statements. As I have said, one of my great interests and missions is to improve the financial literacy of the people of Canberra about their financial affairs—their superannuation, their bank balance and small business. I have also set up with the member for Wright the Parliamentary Friends of Small Business Group, and I am looking forward to small business coming to talk to the group in a bipartisan way about the range of challenges they are facing and to highlight some of their achievements and innovations.
As I said, financial literacy is a mission of mine. Last year I gave to a group of women a speech called 'Finance is a feminist issue.' I am concerned about financial literacy across the broader community but particularly for women. I am sending this message out to the sisters: a man is not a financial plan. I have a number of statistics here that underscore the fact that women do need to start focusing on their superannuation. Women are more likely to be reliant on the age pension, with women representing 70.6 per cent of all single age pensioners, and 60 per cent of women are retiring with no super at all. For those receiving super, the Australian Bureau of Statistics tells us that the current average super payout for women continues to be significantly less than a man's—about $198,000 for men and $112,600 for women. ABS data on retirement shows another important trend—that women in retirement have to go back to work to support themselves. Older workers are a boon to the economy. I know that Minister Ellis has been doing a lot of work in the last few weeks, and I applaud her for that, on getting older and mature workers back into the workforce. I have been doing my bit in my electorate office, employing older people, particularly men, who are finding it difficult to get work, and I applaud the range of initiatives that Minister Ellis has been undertaking in that area as well. Forty-two per cent of women are returning to work after retiring because they do not have enough money in their super account—they need to work for financial reasons. That is of real concern to me. Australia's participation rate in super of 60 per cent for women is extremely low by international standards, with the World Economic Forum placing us 44th in the world for women's participation in the work force.
Those chilling figures underscore the fact that, sisters, we need to grip it up—you need to grip it up and you need to understand your superannuation and you need to plan for a comfortable retirement. I have women coming into my electorate office who are working beyond the age that they planned to retire because they do not have enough super. Quite often they are women who do not even have a house; they are not paying off a mortgage but are renting. They face a bleak retirement, having to live in public housing or having to be in the private rental market, which is particularly expensive, while at the same time living off the pension and a pretty meagre super. I also have women coming in who are sleeping in the back of cars. It is not pretty for a lot of women out there, and that is because of the financial difficulties they are facing.
This can happen to any group of women. A few weeks ago I caught up with an old high school girlfriend of mine who I have known since I was 13. In her 20s, because she did not take charge of the finances in the household and understand what was going on with the bank balances, she missed the fact that her husband had a bad gambling problem and was taking out loans in batches of $3,000. She was going through some paperwork somewhere and she found all these loans of $3,000 with one bank, $3,000 with another and $3,000 with another. It was only then that she saw the cold hard truth of what was happening with her marriage and her husband. I have another friend who was not keeping an eye on the finances and her husband has gone through tens of thousands of dollars on a range of items. It is important that women particularly, given the stats I read out before, grip this up and understand what superannuation they need for their future, what they have got at the moment and how they are going to reach their target. I understand that women take breaks in their career because they want to be at home with their babies. I get all that and I am not in any way suggesting that they cannot do that—
Mr Katter: You don't sound too happy about it though.
Ms BRODTMANN: No, I think it is wonderful that they are doing that. I think it is wonderful that they are taking time off to have their babies. But, when they do go back to work, they need to throw the money in to ensure that they have a comfortable retirement.
As I said, and as the member for Kennedy just said, this is not unique to women. There are also men in this position. I know that there are men in my office who find superannuation to be a bit of a blind spot, a bit of white noise, and that is why it is important that the whole community take notice of what is actually happening with their superannuation. I have been out in the electorate and talking to people at a number of mobile offices and festivals just recently, and I have had men coming up to me and thanking me for the seminars that they have attended where I have made speeches strongly advocating for them to come to grips with this. They have started putting extra money into their superannuation accounts and they have noticed a huge difference, so they have thanked me for that. So this is a message to all Australians, not just to women. But, given those stats, women's superannuation is a real concern for me.
As I have said, Labor have a history of superannuation reform and we have always been committed to building a sustainable retirement savings base for all Australians. In the nineties, Prime Minister Keating introduced what is hailed as one of the most revolutionary economic changes in Australia, the nine per cent superannuation payment for workers, and this established the universal super scheme that we have today. Now the Gillard government are continuing that process of reform with the Stronger Super legislation. We have introduced substantial reforms, and the Minister for Employment and Workplace Relations just outlined some of those. They include improving the way that super is processed, to reduce costs for funds and their members so that more workers have more money in their accounts; the very important initiative of finding lost super; consolidating multiple accounts—very, very important; and improving the duties of trustees.
It is worth reminding the House that the minister also recently announced a 14 per cent reduction in the amount of unclaimed lost super, which is a major achievement. I know that many of my colleagues have run series of seminars and lost super programs to get their constituents to identify theirs. The total amount of unclaimed super is a staggering $17.4 billion. In my electorate of Canberra, the total amount of unclaimed super is $188 million. That is a lot of money that is just sitting there, lazily, not doing anything for a lot of Australians, including Canberrans. In the electorate of Fraser, in just one postcode, there is a significant amount of lost super; it is $32 million. That is why this government has been extremely active in helping unite Australians with their lost super and it is why Minister Shorten's announcement of a 14 per cent reduction in lost super is a real achievement, and I congratulate him.
Turning to the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012, I want to briefly go through each schedule, because they contain important reforms and improvements. Schedule 1 introduces new rules that will mean that members of the MySuper products are not paying unnecessary fees and will limit other fees that could have inhibited a member's ability to make active choices. Schedule 2 covers the insurance arrangements for the MySuper products. This is particularly important, and again I send this message to Canberrans and all other Australians: please take out TPD insurance and life insurance if you get the choice, particularly in industry superannuation schemes. I really like this opt-out clause, because it does mean that people will be protected, and it is only a very small fee as well, from memory—just from my own industry super fund. With what private insurance brokers are charging, there is just no comparison. So I really commend that element of the legislation.
Schedule 3 introduces new data collection and publication powers for APRA—again a welcome initiative, particularly the product dashboard on the websites of super funds. Schedule 4 delivers amendments to the Fair Work Act. Schedule 5 exempts defined benefit funds, those lovely defined benefit arrangements, from the MySuper regime. Schedule 6 requires trustees of super funds to transfer default amounts to members, which is very important.
This bill is another example of Labor's commitment to ensuring we have a fair, regulated superannuation industry in Australia, an industry that Australians can have faith in as they work hard to save for their retirement. As I have said many times before, superannuation is a Labor policy through and through. It was a Labor government that first introduced superannuation, and this Labor government is continuing to make reforms and improvements to it. I commend the bill to the House.