MPI: Superannuation

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (15:25): No pressure at all, I would say to the members opposite. This is the member for Rankin's first matter of public importance and it is my second, so I feel like I am starting ahead! I think people listening to this debate today and members here in this chamber would have been wanting to hear about a government undermining the superannuation system, but I think the sense they got from the member for Rankin was that, indeed, the government is looking at all areas of superannuation very carefully as part of the white paper tax review that we are seeing now. The Prime Minister and the Treasurer have been clear in recent days that we are looking at all these matters and that all things are being considered, understanding that the superannuation system is central to the welfare and living standards of retirees and that we need to ensure that all of the settings are right to work, save and invest for ordinary Australians.

We know that superannuation is one of the most important parts of our tax system. It is also being looked at in detail because any changes proposed for the superannuation system are changes that we would take to an election. For people out there listening to this debate, that is the great certainty that a government can provide to people out there who are looking to structure their tax and superannuation arrangements suitably to them. Any government ought to take any proposed changes in such a complex area of financial services like superannuation to an election—to put it to the people so that they can have a say over what happens.

The member for Rankin spoke a little about the superannuation tax concession system. It is important to note here that the lead minister that the member for Rankin reports to on these matters is, of course, the shadow Treasurer. There is nobody better than the shadow Treasurer to listen to on the superannuation tax concession system. He is the best authority.

Dr Leigh interjecting—

Mr HAWKE: The member for Fraser interjects and says he is very good, and I agree: he is very good on this issue, Member for Fraser. Like you—and it is good that you are at the table—the shadow Treasurer has written a book. He has written a very good book, a book that you should read. It is a bit like your book; it has some enlightening and enlivening sections which really get our juices flowing over here, Member for Fraser. We really enjoyed sections of your book. Let me quote the shadow Treasurer's book because it is very enlightening on the subject of tax concessions for superannuation. I quote directly from page 42 of the shadow Treasurer's book:

The tax concessions for superannuation are substantial. They are justified—

that is what he writes—

because they avoid future payments of the age pension and they help boost our pool of savings, with all the benefits for the economy that this brings.

Let me enlighten everyone here once again. This is the shadow Treasurer speaking here about the super tax concession system. He goes on:

But because the tax concessions are costly for the budget bottom line it is natural that the Treasury and Department of Finance are attracted to recommending that they be pared back when belts are being tightened.

This is another direct quote from the shadow Treasurer:

The problem with this is that it creates uncertainty for, and concern by people who are making voluntary contributions to superannuation.

The member for Rankin, if he got a copy of the shadow Treasurer's book, could read on page 42 that the shadow Treasurer is most concerned about creating uncertainty in the superannuation tax concession system—and well may he be that way, because Labor's plan will create great uncertainty in the superannuation tax concession system. Its intersection with the age pension and its intersection with the tax system is one of the key considerations of the government, and that is why the Turnbull government has not ruled out options but instead has said, as part of the tax white paper system, it will be looking at the intersection of these matters and any policy we have will be taken to the next election.

I want to turn now to some of the other points that the member for Rankin made. One of the only things that he had to say was to reaffirm Labor's strident opposition to the government's plan to improve the boards of industry super funds. This is not just about this sector, but he, of course, sees it as being just about this sector. I think that is a big mistake. We know this is about the entire superannuation sector, not just about any one part of it. We know that the need for change has been called for in the international community. Recent independent reviews, the Cooper review and the FSI all recommended that at least one-third of directors on these boards ought to be independent.

To most people involved in or who have experience in this sector, this seems to be a harmless but necessary change. One-third of directors on these massive funds should be independent. APRA has indicated that independent directors improve governance. We know that independent directors improve governance. We know that it is international best practice to have independent directors on the boards of these massive funds, and yet the member for Rankin rails against it. Why would he do this, when we know this is not about any one sector? The changes apply equally to all sectors—all corporate, industry, public sector and retail funds. It applies to everybody. We know that many funds are already doing this. The Prime Minister spoke about First State Super today. But perhaps the member for Rankin should listen to this—

Dr Chalmers: If they are already doing it, why do you need to mess with it?

The DEPUTY SPEAKER ( Mr Craig Kelly ): Order!

Mr HAWKE: If he had been listening, he would know that First State Super has already headed down this path.

Dr Chalmers interjecting—

Mr HAWKE: Because we know that some boards governing the superannuation of Australians will not go down this path. I am happy to answer your question, Member for Rankin. Why are we doing it? Because it is international best practice. Corporate governance is a good thing. Good corporate governance is necessary when you are talking about trillions of dollars of funds under management. It is not a laughing matter, Member for Rankin. You think it is hysterical, but international best practice in corporate governance is not a laughing matter when you are dealing with the future retirement savings of every single ordinary Australian.

Dr Chalmers interjecting—

The DEPUTY SPEAKER: Order! The member for Rankin has had his opportunity.

Mr HAWKE: We know we are talking about 30 million accounts, Member for Rankin. We know that, with the default super legislation that the Labor government passed, you are funnelling ordinary Australians' money into these funds.

Why are we concerned about the corporate governance of these funds? We are concerned about it because we want to make sure, ahead of time, that these funds are using international best practice for their corporate governance, with trillions of dollars under management. We make no apology for that, because it is better to get ahead of problems. It is not good for you—like you do so many times in this place—to come into this chamber and tell us after there has been a problem, after there has been a disaster, after there has been some trouble with some fund, and say, 'We should have done something about it.' What we do is set up good corporate governance standards, working with APRA, with all of the recommendations of the Cooper review, with the independent reviews into the Financial System Inquiry and, of course, with First State Super, UniSuper, VicSuper, Prime Super, Hostplus and Catholic Super—and I am sure there are still one or two Catholics left in the Labor Party.

But, if you do not want to listen to any of those people, to industry funds, to retail funds or to First State Super, have a listen to this, because this is someone you will pay attention to. I know every member of the Labor Party pays attention to former AWU boss Paul Howes. Shen I mention that name, the reverence that hits the faces of members of the Labor Party—

Mr Wilson interjecting—

Mr HAWKE: It does; it warms the heart. We know that walking down from the mountain was Paul Howes, former Australian Workers Union boss. Not only has he indicated his support for the government's changes; he has said—

Opposition members interjecting—

Mr HAWKE: This is Paul Howes; I know you need to be silent if Paul Howes is speaking. He said:

Equal representation has been a success but the evolution of the super industry is important and I cannot see anything negative in having more independents on boards.

Paul Howes, the former AWU leader, cannot see anything negative in having more independent directors and bringing us to international best practice. The Labor Party are the only ones that see anything negative in having independent directors on these boards, and you have to ask why. Why is the member for Rankin bringing in an MPI today to say that government is undermining super, when his main point is that the government is bringing Australia into line with international best practice arrangements for the corporate governance of superannuation? That is your main point; that is the only point that you raised. How can you say that the government is doing anything other than acting in the interests of every single worker by ensuring a reasonable proportion of independent directors on these boards? It does not pass the sniff test. It does not pass the Paul Howes test. It does not pass the First State Super test. It is the Labor Party that is completely out of step on superannuation.

This MPI once again highlights the great differences between the Turnbull government and the approach of the Bill Shorten-led opposition. We have a plan to ensure that superannuation is well governed and well managed and that the money that belongs to the workers—the hard-earned money of ordinary Australians—stays in their hands. It is the Labor Party that has a plan to increase the tax on superannuation, to say to people, after they have worked their whole life, that it will take more from ordinary workers after they have already paid their fair share of tax.