Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

This entire motion shows the complete economic illiteracy of the opposition. They believe in magic pudding economics. I am sure we have all read the story of the magic pudding with Bunyip Bluegum, Bill Barnacle and Sam Sawnoff and the pudding thieves and of how the magic pudding would reform itself every time they would eat it and they could eat it again.

The obvious thing they seem to completely fail to understand is that if you increase superannuation that money has to come from somewhere, and, as your current leader said, the increase in compulsory super comes out of people's wage rises. So it simply means that if you have a compulsory increase in super that means that real wages—what people get in their pocket and what they take home—becomes lower. That may well work when the economy is growing, when the budget is in surplus, when we do not have a national debt costing $1 billion a month in interest repayments alone. When those things are happening, yes, you can compulsorily take some wages from the workers and compulsorily put that into superannuation. But we do not have that now.

The question that I ask my good friend, the member for Fowler, is: would a typical constituent in his or my electorate that might have a current credit card debt on which he is paying 17 per cent interest be better off getting extra money in his pay and paying down that 17 per cent interest rate or having that money compulsorily taken out of his pay, given to the superannuation funds and invested where he might get three or four or five per cent. Or take the young couple with a child who are struggling to get a deposit together so they can take a mortgage on. What would be best for that young couple? Is it best to have more money in their pocket to help them put together that deposit, or to take that money off them, put it in their superannuation account and tell them they can have it at 65. Or take someone that is a worker who decides they want to have a go by themselves and decides they would like to start their own small business and wants to scrape together a bit of capital to start that business up. How would they be better off?

Would they be better off with money in their pocket today to go an invest in that start-up business or would they be better off with the government compulsorily taking that away and putting it in their super funds? The answer is simple. No-one, with the changes we are making, will be worse off. Workers will have the right, if they think they would be better off putting more money into their superannuation from their wages, to do so. If they think that they would be better off paying off their credit card or putting that money towards a deposit on a house or putting that money towards scraping up the capital to start a small business then that is what we are allowing them to do.

We know the member who moved this motion was not part of the previous six years of mess and chaos that many of us here experienced. If that member was, she would know about the unexpected negative changes and about the complete hypocrisy of that motion. It was under the previous Labor government that we saw $9 billion worth of unexpected tax increases raiding the superannuation accounts of the people of this nation. And they come in here crying crocodile tears pretending that the workers are going to be worse off because we are giving them the choice to either increase their superannuation if they want or to put that money into a real wage increase.

The other thing on the subject of superannuation, which seems to have gotten not a lot of front page recently, is the Future Fund. Thankfully, we now know there is $100 billion in the Future Fund that Peter Costello set up when he previously paid off that $96 billion worth of Labor's debt and started those surpluses rolling in. He put that money away to account for that unfunded superannuation liability. But in the last budget that unfunded superannuation liability has now blown out to $150 billion. It still has to be paid sometime in the future. The budget estimates that by 2020 that will be $200 billion and by 2050 it will be something like $350 billion. If we are to be honest with the Australian people, we need to fully account for all of that unfunded superannuation and the liability this government has going forward.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I would like to begin by thanking the member for Griffith for this motion on a subject that is very close and dear to my heart. Superannuation is important for all Australians but I am here to tell you why it is particularly important for women. Women live longer than men but earn less; they take more time out of the workforce and they retire with less superannuation. Significant and increasing numbers of Australian women are ending their working life facing financial hardship even poverty and, in some cases, homelessness. Their future is bleak and I meet them in my electorate office almost every week.

Australian women are earning less today than they were ever before when compared with their male colleagues. According to ABS data from August, the gender pay gap has soared to above 18 per cent. The data shows that male salaries have increased by 2.9 per cent while, alarmingly, women's salaries have only gone up by 1.9 per cent. Men, on average, earn a full-time weekly wage of $1,559.10; women, on average, earn $1,275.90.

Women need more support. The Prime Minister's broken promise on the superannuation guarantee means women will retire with thousands of dollars less in their super accounts. This broken promise would leave people worse off, it will hurt young people and it will hurt women.

Let me tell you about how superannuation could have helped my family. When I was 11, my father walked out on my mother, two sisters and me leaving $30 in the bank. My mother was a determined stay-at-home mum having been a victim of the marriage ban and two generations of poverty. Her father had also walked out on her own mother just six months after she was born. She was brought up in a housing commission home and her mother worked three jobs as a domestic to keep food on the table. My grandmother had done it tough all her life. Her own father had also disappeared during the course of her childhood leaving her mother, my great-grandmother, with 13 children to bring up on her own.

I was the first person in my family to go to university. My middle sister was the first scientist, and my little sister was the first doctor. My mother was determined for us to have the choices that were denied her, which education provided, and she dedicated all her spare cash—and in the end a comfortable retirement—to make it happen. Because of my mother's part-time work and then late entry into full-time work and superannuation, she retired with just $20,000. And because she was involved in the early days of superannuation, a lot of that tiny sum of money was eaten away by fees. So, now my mum is on the pension, and until last year she was cleaning houses and house sitting for extra cash—at 75. My mum is too proud to take money from my sisters and me, so we support her by paying for her holidays, her private health insurance, and her theatre tickets, airfares and dinners out.

As the member for Canberra I see women with similar stories to that of my mother and similar financial situations every day—women who are the victims of domestic violence, sleeping in their cars with their teenage children; women who are on their own, with small children, in search of social housing and financial assistance; women who are on the pension and still renting in the private market, which I see all the time; and desperate women in their 60s who are finding it hard to get work but need to keep working because they do not have enough for their retirement. I am calling on the Prime Minister to set up a system that gives these women—women like my mum, women like the women in my electorate, and their daughters—some financial security. The decision to delay the superannuation guarantee until 2025 will have the biggest impact on those who can least afford it: the low- and middle-income earners, and mostly women. The abolition of the low-income superannuation contribution will rip up to $500 a year from 2.1 million women on low incomes.

The Prime Minister claims that the money will be in people's pockets, not locked away in super. But are these workers going to see an increase in their pay now that they are not getting an increase in super? Of course they are not. The Prime Minister promised no adverse changes to superannuation, and he lied. The Prime Minister said that no-one will go backwards, and he lied. Australian women should not have to pay the price for the government's poor choices and should not have to face a bleak retirement future because of the Prime Minister's broken promises.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Before I call the member for Forde I would like to remind the member for Canberra that the word 'lie' is not very parliamentary.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

I would like to thank the member for Griffith for giving me the opportunity, in bringing this motion to the House, to clarify that our plan for greater stability and certainty to superannuation is exactly what this government was trying to achieve. In short, we are keeping our election commitments. However, we do acknowledge that there have been some adjustments to the time frames in which these commitments will be met. The motion by the member for Griffith states that there will be a greater level of uncertainty with regard to superannuation as a result of these changes. But I would like to say that this will actually add certainty to superannuation, because it was the previous government, in its term in office, that created enormous uncertainty within the superannuation system. And if it was not for Labor's continual frustration at the government's clear mandate to repeal all manner of ill-conceived Labor Party policies—for example, the mining tax—then the changes the government has had to make may not have been necessary, as the mining tax package initially sought to remove some of the enormous amount of expenditure tied to it that is now being blocked.

It is worthwhile remembering that during Labor's time in office Labor announced increases in taxes on superannuation of almost $9 billion. They also succeeded in cutting superannuation benefits for low-income earners by more than $3.3 billion. I note with interest that there is no reference to any of these adverse effects to superannuation in the motion of the member for Griffith. It is typical of those opposite—the crocodile tears over changes to try to not only get the budget back into order but also get this economy back into shape after six years of their negligence and mismanagement—that the changes we seek to make for everybody's benefit over the longer term are blocked by those opposite, including changes that were previously Labor Party policy.

The mandatory requirement for employees to put superannuation into people's accounts has come from forgone pay rises and even the current Leader of the Opposition noted that in a speech recently. In addition, it is important to remember that this is a minimum mandatory requirement. If people want to trade off pay increases or more pay they are free to put more money into their superannuation via salary sacrifice, for example. There is nothing to stop them doing that. However, those opposite did succeed in reducing the ability of people on significant incomes to put significant amounts of money away for their retirement via larger superannuation contributions. Previously, we had contribution limits for concessional contributions of around $50,000 if you were under 50 and $100,000 if you were over 50. They are now down to $30,000 and $50,000 respectively.

All of that prevents the people who are most capable of putting significant amounts of money into superannuation from doing so to minimise the need for them to draw on the age pension in their later years. So I do not in any way support the motion put forward by the member for Griffith, because it is only through the actions of this current government that we are looking to provide some stability, some certainty in the superannuation system in order to also bring the budget back to order and to ensure that people have employment and jobs, and to get our economy back on a sound track not only for the current generations but for future generations of Australians.

Debate adjourned.