I'm very pleased to have this opportunity to speak on a bill legislating the objective of superannuation. It's a bill that builds on a proud Labor legacy of Australia's superannuation system. A system renowned across the world, a transformative system, which has changed the lives of millions of Australians as they enter retirement.
Superannuation is the definition of Australian values in action. It is a statement that when you work hard throughout your life, when you contribute to your nation, your financial security should be assured in your retirement. And, alongside your own savings, and our age pension system, this is exactly what superannuation guarantees for Australians. Through compounding interest, Australians entering the workforce today will have the comfort that, when they eventually retire, their lifetime of hard work will be rewarded.
Hawke and Keating established superannuation because they knew that Australians at that time did not have that comfort. Super is a scheme which takes significant pressure off the pension system, allowing government funds to go to those who need it most. Because the Hawke and Keating governments also knew that Australians were living longer after retirement and that the cost to the public purse of supporting the ageing population would only increase, and that more people would need support in retirement, superannuation was fundamentally long-term responsible decision-making. And what a success it has been. Our super system today is worth over $3 trillion. That's $3 trillion of economic security for Australian workers, $3 trillion of smart, proven future-planning brought to you by the Australian Labor Party. This is a system that has been so successful that Australia now has the third-largest pool of retirement savings in the world. As a share of GDP, our private retirement savings outrank those of the US, the UK and Canada. It is a policy success that cannot be rivalled.
The bill legislates for the first time the objective of Australia's superannuation system. So what is that objective? This bill sets out the objective of superannuation: 'to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.’ This is very important. This objective, in the words of the Treasurer, serves as a reminder that achieving better living standards for Australians in retirement is at the heart of the superannuation system, and that future policy changes should be compatible with the legislated objective.
So why is this bill necessary? In 2014 the Financial System Inquiry recommended that the parliament legislate an objective for superannuation. The inquiry suggested that this would deliver better outcomes and a more seamless experience for superannuation members throughout their lives. In their final report, they said:
The superannuation system does not have a consistent set of policies that work towards common objectives.
… … …
The lack of an agreed policy framework and objectives reduces the efficiency of the system.
They continued:
The absence of agreed objectives contributes to short-term ad hoc policy making. It adds complexity, imposes unnecessary costs on superannuation funds and their members, and undermines long-term confidence in the system.
This was the exact experience during the long decade of coalition rule. We know that those opposite have an ideological obsession with destroying Australia's superannuation system. They hate that something that Labor implemented and that Labor improves when we're in government has been so successful. They hate that the union movement are associated with the best-performing funds, the industry super funds, so they seek to undermine the system at every opportunity in every way, regardless of the fact that Australian workers love our super system and deeply appreciate the financial security it delivers for them in retirement.
During the Abbott-Turnbull-Morrison government, we saw multiple attempts at this undermining, whether it was the misleadingly named 'your future, your super' bill, which would have stapled up to three million Australians to underperforming funds for life, or the COVID-era decision to force around three million Australians doing it tough to draw down $37.8 billion worth of their own super so the government could get away with lacklustre support. On this measure particularly, safeguards were totally lacking, and as a result we saw far too many stories of Australians on low incomes withdrawing their super funds and using that money for short-term needs that undermined their financial security in retirement.
That is what those opposite miss about superannuation, and the member for Petrie has just given a speech on this. I agree with him wholeheartedly on one point, and that is that superannuation is your money. It belongs to Australians. Of course it does. What it's not there for is for governments to use it whenever they feel like using it to address a problem, making the poorest Australians—those on low incomes, those who need it most in their retirement—to undermine it early on in their savings journey. During COVID, when young people withdrew from their super, it would have been worth so much more to them in their retirement than it was at that time because of the compounding interest. This is the whole point of superannuation, and the whole point is that those with the least stability to make that decision at the time—because they need that money now—are those who most need it in retirement. These are the policies that undermine that future for them.
There was also the plan to force first home buyers to raid their retirement savings to scrape a deposit together for a home. This is a perennial favourite of the coalition, and it keeps on coming up. This is exactly what I'm talking about. Of course, there was possibly the most egregious attempt: the idea that was floated to force women fleeing domestic violence to draw down their super to escape from their abusers. It was perhaps one of the most tone-deaf policies of the Morrison government, and it was abandoned following one of the most incredible speeches I've witnessed in my time here from my dear friend the late Peta Murphy, the former member for Dunkley. She killed off that disastrous policy in just 90 seconds, because, in Peta's own words, 'When Australians are forced to raid from their future to survive their present, the government is failing them.' I couldn't articulate it as clearly as Peta did there, but that's exactly the problem and why they just don't get it.
The key theme in all of these half-baked failed policies is that the coalition sees super savings as a way to avoid government expenditure. They see it as a way to make their books look better, with zero regard for the future of Australian workers. Many of these attempts to undermine superannuation have disproportionately impacted Australian women, and we already know that women are retiring with $136,000 less in their super accounts than men on average.
The Albanese Labor government has decided that enough is enough, and we are working hard to ensure that this superannuation gap is closed, including with our announcement the week before last that we will be paying superannuation on the Paid Parental Leave scheme. This is an incredibly welcome change and something that women have campaigned for for many years and again builds on another proud Labor legacy, which is our Paid Parental Leave scheme, introduced under the Gillard government and social security minister Jenny Macklin.
We are working to close the superannuation gap by introducing this bill to safeguard Australian women's and indeed all Australians' superannuation. What does this bill require going forward? The bill requires that members of parliament who introduce a bill which proposes changes to the superannuation system shall provide a statement of compatibility which explains how the bill is compatible with the objective that we're legislating today. The bill also requires that makers of regulations related to superannuation publish a statement of compatibility which explains how the regulations are compatible with the legislated objective of superannuation. This strikes the right balance of accountability to ensure that changes to the super system are consistent with the objectives while providing flexibility for ministers to prepare fit-for-purpose statements depending on the nature and complexity of future measures relating to superannuation. It complements other measures that the Albanese Labor government is implementing to improve the financial wellbeing of Australian workers. One of these measures that I am most proud of, as I mentioned, is the recent announcement to pay superannuation on paid parental leave.
But we have done a lot in our relatively short time in government to ensure that wages are on the increase. Unlike those opposite, it is not a deliberate policy of ours to keep wages low. Also, our recent announcement of tax cuts means that Australians will be not only earning more but keeping more of what they earn.
As I touched on earlier, we know that in Australia women on average retire with a super balance of up to 40 per cent less than men. A large part of why this is an issue is because women are primarily still the ones taking a majority of time off to care for families, leading them to miss valuable super accumulation earlier in their careers. Labor wants the disparity to end. Of course those opposite don't understand this objective of super that we're talking about, so it doesn't surprise me that the natural reaction to our paid parental leave policy was initially not to be supportive. Labor is the party of super, and we always will be. We will always act to protect it. We will always block attempts to undermine it. This bill future-proofs the superannuation system so that it continues to benefit all Australians. I commend the bill to the House.
