That was an interesting contribution from the member for Mayo. It would be interesting to have a chat with him about what he thinks about industry super funds, actually, and what he sees as being the appropriate composition of a management board for a super fund. I wonder if it is white, Anglo-Saxon males that were educated at Geelong Grammar. The Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012, that we are debating today, is another example of Labor's commitment to ensuring we have a fair, regulated superannuation industry in Australia—a superannuation industry that Australians can have faith in as they work hard to save for retirement.
Superannuation is a Labor Party policy through and through. It was a Labor government that first introduced the compulsory superannuation guarantee, and it is a Labor government that is now reforming super to ensure the retirement savings of Australian workers are better protected. The Gillard Labor government is committed to strengthening super, and we are doing this through a historic increase in the superannuation guarantee from nine per cent to 12 per cent. Around 8.4 million Australians will benefit from the increase in this superannuation guarantee. For example, a 30-year-old on full-time average weekly earnings will now be around $108,000 better off at retirement. We are also working to make superannuation concessions fairer for up to 3.5 million low-income earners. Overall, our historic super reforms will lift retirement savings by $85 billion over 10 years and $500 billion by 2035.
But it is not just this increase in the superannuation guarantee that will benefit Australians in retirement. Labor will also provide an annual contribution of up to $500 into the superannuation accounts of workers earning less than $37,000, from 1 July this year. The majority of the people that that will benefit, 60 per cent, are working women, working mums. Next year we will also get rid of age limits on contributions for the first time since the introduction of compulsory superannuation.
We are also going one step further by creating a new low-cost superannuation product called MySuper, which is what this bill centres on tonight. The Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 is the second tranche of legislation implementing the government's MySuper and governance reforms. The first tranche of legislation was introduced to the parliament on 3 November last year as the Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011. This latest bill implements the next stage of the reforms by amending the Superannuation Industry (Supervision) Act 1993.
This bill is a critically important element of the government's Stronger Super reform package and will help to improve the governance and supervision of our superannuation system. The bill also introduces the power for the Australian Prudential Regulation Authority, or APRA, to make prudential standards, which is in line with our banking and insurance industries. Ultimately this bill is important because it complements the government's reforms to boost superannuation savings.
Australia should be able to have confidence in those managing their money and in the regulatory framework. As I said, at the centre of this bill is MySuper, a new low-cost and simple superannuation product that will replace existing default funds. MySuper products will have a simple set of product features, irrespective of who provides them. This will enable members, employers and market analysts to compare funds more easily based on a few key differences. It will also ensure members do not pay for any unnecessary bells and whistles they do not need or use. Superannuation funds will still be able to offer different products and will not have to offer a MySuper product, but only a MySuper product will be eligible to operate as a default product. What this means is that a fund's default product must meet the MySuper standards to continue to accept contributions from employees who have not exercised choice and nominated a fund. I believe that this will encourage the industry to become more competitive and that people who benefit most will be young workers. We know that in order to maximise your retirement income it is important that your super fund, particularly if it is a default fund, is a low key, high performing fund. This legislation will maximise retirement incomes by making sure that only those super funds that deliver and continue to deliver for their members will be able to be included as a default fund option in modern awards and enterprise agreements.
It is estimated that 4.5 million Australians will hold a MySuper account once this legislation is fully implemented, and those people have the potential to be $40,000 better off in retirement. MySuper has been implemented in response to the Cooper review, a comprehensive review of Australia's superannuation system by the former deputy chair of the Australian Securities and Investment Commission, Jeremy Cooper. The final report highlighted that not everyone wants to make a choice about their superannuation and often default members are not adequately protected and will find themselves paying for services that they do not necessarily need.
Although I am a strong advocate for financial literacy, particularly for women and particularly when it comes to superannuation, I do believe there needs to be adequate regulation of the industry to protect the retirement savings of workers and encourage more confidence in the superannuation industry. Recently I held the first of what I hope to be a number of financial literacy seminars for people in my electorate. It was run by the Parliamentary Secretary to the Treasurer and we held it at the Tuggeranong Seniors Centre. The seminar was very well received; it was a pilot seminar; and it provided an opportunity for people to learn about the scams that are out there now. I have spoken in this House many a time on the scams my family and my husband's family have experienced in very minor ways and the scams experienced by people in my community. It was a really good opportunity for us to talk about these scams and educate the community on the scams and what to avoid—if it looks too good to be true, then it probably is. There were many good, positive take-away messages from that seminar and I look forward to conducting more in the future.
The Cooper review also found that superannuation governance standards have not kept pace with developments in the industry. It suggested there were difficulties for trustees and directors on trustee boards to understand what is expected of them. It also found that, as the industry consolidates, it becomes more integrated, leading to more conflicts of interest. And that is why we are focusing on reforming the governance and supervision of our superannuation system. By giving APRA the power to make prudential standards in superannuation, it will have greater flexibility to effectively adapt to industry developments. It will also have the ability to provide regulated entities with clearer and more tailored legal requirements. This bill will also strengthen our response to the Cooper review by imposing new obligations on trustees that elect to offer a MySuper product, in particular compelling them to promote the financial interests of members more thoroughly.
By introducing this tranche of legislation, the government is making it clear that trustees should have increased responsibilities for default members who generally delegate all aspects of their superannuation to them. APRA must be satisfied that a trustee will comply with the enhanced trustee obligations and that individual directors of corporate trustees will comply with the enhanced director obligations to authorise an RSE licensee to offer a MySuper product. These duties for individual directors will be clarified and separately identified, and will include acting honestly, exercising appropriate care and giving priority to the duty to, and interests of, beneficiaries. This change addresses the concerns raised by the Cooper review that accountabilities in the system had become obscured by the corporate trustee structure, and will clarify the standards expected of directors of corporate trustees. These changes, which will improve governance and supervision in the superannuation industry, are especially critical given the Gillard government's historic commitment to increase the superannuation guarantee to 12 per cent, which, combined with existing growth, is expected to see super assets reach $6.2 trillion by 2036.
As we raise the bar in areas such as financial planning, it is fair that we ensure there are improvements in other areas of our superannuation system, including in the operation of the funds themselves and the conduct of trustees. The Gillard government's reforms will make our superannuation system stronger, more efficient and will help to maximise retirement income for Australian workers. It is in our national interest to encourage more Australians to save more for their retirement and to understand how their superannuation works. I often see and often have conversations with women—and they are all women—coming into my electorate office or I meet them in mobile offices or just down at the shops who are really doing it tough. Many of them are in their late 50s or early to mid 60s; they feel compelled to continue to work and they are worried sick because often they are in the private rental market and they do not have enough superannuation to sustain a comfortable retirement. They realise that they will probably be on superannuation for a couple of years after they retire and then it is on to the pension.
When I am talking to groups of young women, I always underscore the importance for them to plan for their super and plan to put money away throughout the course of their life. If they plan in advance— when they get married or in their early 20s—and they understand the ebb and flow of their career changes and how their finances change, they can plan to ensure they have a comfortable retirement and the appropriate superannuation.
One of the things I am keen to do is to conduct a series of seminars—originally they were directed at women, but there has been a lot of interest from men too—about how to read superannuation statements. By understanding what is actually in your statement you can then work out how much money you have, and you can then go and speak to a financial planner or do some homework and some research through the range of online resources—particularly government resources —and work out, 'All right, I need this amount of money for my retirement. How am I going to plan to make sure I have that money for that comfortable retirement?'
Superannuation is a subject that is very dear to my heart, having spoken to these women who are really doing it tough and who realise that they do not have enough superannuation. That is why I am constantly underscoring, particularly to young men and women, to plan for their retirement and to do that through superannuation.
As you can see, Mr Acting Deputy Speaker, we have a very clear plan when it comes to superannuation and helping Australians save more for their retirement. But there is an onus on the superannuation industry to facilitate higher retirement savings through greater efficiency and lower fees. We are assisting lower paid workers and also helping older workers who want to contribute more to their super. We are raising the superannuation guarantee for everyone, which will have a huge impact on the nest eggs of 8.4 million Australians.
Unfortunately—and we heard a bit of it tonight from the member for Mayo—those opposite think superannuation is the greatest con job ever. While Labor is getting on with the job of increasing the superannuation guarantee, those opposite have no plan because they want to scrap the mining resources tax, which is funding this historic rise in super.
The coalition originally opposed Labor's introduction of compulsory super in 1992, and I do believe that they remain a threat to the future retirement incomes of Australians. They still do not have a superannuation policy because they do not believe in it; it is as simple as that. Thankfully, the Gillard Labor government is committed to superannuation in Australia and is working hard to strengthen and improve this important economic policy. And it is working hard to ensure comfortable retirements for all Australians.
This latest tranche of legislation will help make our superannuation system more efficient, transparent and fairer for the millions of people who have put their faith in it, and I commend the bill to the House.