Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Cormann. I refer to the minister's joint statement with the Treasurer on 2 September 2014 that freezing the superannuation guarantee would have the impact of reducing businesses' overall wage bills. How can the minister and government claim that workers will have more money in their pockets when the minister and the Treasurer say that freezing the superannuation guarantee will reduce wage bills?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Cameron for that question. While I have not got the release in front of me, I can confirm that he accurately quoted a small part of that release in isolation. I see him smile and laugh; he knows that is exactly what has happened. The truth is that increases in superannuation payments come out of wages and represent a cost to business. Everybody on this side of the chamber knows this.

What I have pointed out for a very long time is that Mr Shorten—the Leader of the Opposition, when he was the Minister for Financial Services and Superannuation—kept saying, 'No, no, no. There are increases in compulsory super. They do not come out of business profits. They come out of people's wages.' He kept saying, 'We are going to go and put our hands into people's pockets. Increases in compulsory super come out of people's wages.' On 1 July 2015, under Mr Shorten's plan, people were going to get a 0.5 per cent pay cut in order to pay for the increase in compulsory super.

The important point here is that increases in compulsory super do not come out of thin air. They either come out of people's wages or they come out of the cost of doing business. By reducing the cost of doing business, we are enabling businesses across Australia to employ more Australians. Guess what? We inherited an economy growing below trend and rising unemployment from the Labor Party. We are working to turn that around. We are keen to ensure that we can grow a stronger economy and create more jobs on the back of stronger investment. Part of that is ensuring that businesses in Australia are more competitive internationally than what they have been in the past. The Senate's decision the other day was good for the national interest. If Labor is so opposed to it, why don't they promise to repeal it?

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I ask a supplementary question, Mr President. I refer to the comments by Kate Carnell, the CEO of the Australian Chamber of Commerce and Industry, that the correlation between the superannuation freeze and wage increases would 'obviously not be linear' and that 'in the end, employers will pay what they can afford to pay.' Does the minister stand by his statement yesterday that workers will be better off because they will have more money in their pockets?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

That statement by Ms Carnell is very astute and is entirely accurate. I absolutely stand by everything that the government has said in relation to these matters. The point is that employers who hire employees and workers consider the overall remuneration package. If you pay an employee more in super, you pay them less in wages. I do not know which part of that mathematical formula Senator Cameron does not understand. Perhaps in the union movement people do not understand these sorts of realities. If you are in business, you look at the total cost of employing a particular employee. You pay more on superannuation, you pay less on pre-retirement take-home pay. The Senate agreed with the government that—in the context of the mining tax repeal package that we have put forward and the amendments that the Senate was keen on—we needed to ensure that there were other adjustments to the superannuation arrangements. That means that people will end up with more money in their pocket prior to retirement than they otherwise would. (Time expired)

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I ask a further supplementary question, Mr President. I refer to comments by Innes Willox, CEO of the Australian Industry Group:

Over the next couple of years, we would not expect wages to rise to completely offset the postponement of the Superannuation Guarantee increases.

I ask again: does the minister stand by his statement that workers will be better off because they will have more money in their pocket?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I absolutely stand by those statements. I refer to the statements of the Leader of the Opposition when he was the Minister for Financial Services and Superannuation, when he said, 'increases in components for a super come out of people's wages, not other business profits'. I would also refer the honourable senator to a very astute and insightful article by Peter Martin in the Fairfax papers, hardly an apologist for the coalition, who pointed out that if the Labor trajectory in increasing compulsory super had stayed in place, workers were in line for a 0.5 per cent pay cut on 1 July 2015 and a 2½ per cent pay cut by—

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I rise on a point of order on relevance, Mr President. The question is very specific. Peter Martin does not employ anyone—

Stephen Parry (President) Share this | Link to this | Hansard source

The minister answered the question in his opening remarks. The answer has been directly relevant, and he is following up with supplementary commentary, which is—

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

So you are not allowing me to finish my point of order?

Stephen Parry (President) Share this | Link to this | Hansard source

On the matter of direct relevance, a minister could not have been any more relevant.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I could not have been more relevant. Under the previous Labor government's approach, workers across Australia were in line for a 2½ per cent pay cut in order to pay for the increase in compulsory super. Under the coalition together with crossbench senators, like the Palmer United Party, the Family First Party—(Time expired)