Superannuation Measures Bill 20/6/18

June 20, 2018

DR CHALMERS (Rankin) (09:58): Thanks very much, Mr Speaker, for the opportunity to speak on the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018.

This bill, at its core, is about unpaid super. Unpaid superannuation is wage theft. Businesses not paying their workers the superannuation that they are entitled to by law is an enormous problem in this country. We have had billions of dollars of super not being paid to millions of Australian workers over the last quarter of a century or so, and that's a really big problem. The super guarantee is called the super guarantee for a reason: it's not optional, it's compulsory superannuation. We need to make sure we're doing all we can to ensure super is paid, that people aren't dodging their obligations to their workers, and that workers can save for their retirement and retire with dignity.

What this bill does—or, at least, one part of this bill—is reaffirm what we have come to know about this government. This government is notorious for creating one set of rules for the top end of town and another set of rules for everybody else. What this bill does with its so-called amnesty provision is it protects dodgy bosses who fail to pay superannuation to their employees. It does this by proposing to give a 12-month amnesty to employers who haven't paid compulsory super payments to their staff since 1992. That's more than 25 years of bad behaviour by employers, and those opposite want to sweep that under the rug. They want to pretend it never happened. They want to forgive the wage theft that has gone on in this country when it comes to superannuation. That's more than 25 years, more than a quarter of a century, of bad behaviour that the government proposes to just wipe away.

What makes it especially hard to cop, what makes this proposed legislation even worse, is that under this bill the superannuation guarantee charge will also be tax deductible for employers who've done the wrong thing. In a nutshell, dodgy bosses will get a tax break for doing the wrong thing. Doesn't that say it all about those opposite and their approach in trying to ensure that there's one set of rules for big business and another set of rules for everybody else? If an employee stole from an employer for 25 years, they'd go to jail. Under this Prime Minister, employers who steal entitlements from their workers get a tax deduction. It's quite extraordinary when you think about it along those lines. It's outrageous. It's infuriating. It's shocking in some ways, but, in others, sadly, it's not surprising.

When you take a look at the track record of those opposite, they always side with the top end of town at the expense of those who work and struggle. We're seeing that, as we speak, in the other place, on another bill about tax cuts. They will always side with the top end of town against people who work and struggle. That's why they want to give that $80 billion tax cut to multinationals and the big banks. That's why they want to chop penalty rates in our community. That's why there have been big rises in private health insurance on their watch and rises in the cost of energy and cost of living. They will always prioritise the people with the most over the people with the least.

Australians know that, every step of the way, those opposite have tried to undermine and water down superannuation in this country. They say they support superannuation, but time and time and time again they do what they can to undermine super. On an almost weekly or monthly basis there's some new harebrained idea from the Minister for Revenue and Financial Services and others on that side of the House that seeks to undermine and diminish superannuation, which is one of the greatest public policy achievements in the history of this nation. Other countries look at our superannuation system with envy and seek to replicate what we have achieved here since the early 1990s, while, at the same time, those opposite come up with all sorts of harebrained ideas—dangerous ideas like the amnesty in this legislation—which seek to undermine what we've achieved for Australian workers when it comes to superannuation.

The bill contains four main elements. I want to focus largely on the fourth, as the first three are largely uncontentious. They have some merit in them. They are: allowing employees who have multiple employers to apply to the tax commissioner for an exemption certificate from the SG from one or more of their employers so as to avoid breaching the concessional contributions cap; ensuring that the non-arm's-length income rules for super entities apply in situations where a super entity incurs non-arm's-length expenses in gaining or producing income; and amending the total superannuation balance rules to prevent SMSF members being able to use limited recourse borrowing arrangements to circumvent the $1.6 million transfer balance cap and the unused concessional carry-forward rules. Those three parts of the bill are not, in our view, without merit. They have some merit. Our issue is not with those parts of the bill. Our issue is with the amnesty arrangements—the one-off 12-month amnesty for employers who have done the wrong thing—and that's why the member for McMahon moved the amendment to remove that part of the bill so that the rest of it may pass.

One of the reasons we know that this is a sneaky, dodgy attack is because it was done without warning, without consultation. This amnesty just popped up one day. It was a complete surprise to the industry, to the rest of the parliament. It wasn't recommended by the Senate committee's inquiry into superannuation guarantee non-payment. They looked at this in some detail. A lot of good senators, who held up our SG system to the light and looked at unpaid super, did not recommend this measure. It wasn't recommended by the government's own Super Guarantee Cross-Agency Working Group. It wasn't in the budget. Presumably it was a decision taken but not yet announced. There have been no recent parliamentary reports that have recommended this course of action.

When you think about unpaid super, there has been some welcome attention on that in the last little while. When I was in that portfolio in the last parliament, we were always looking for ways to shine a light on unpaid super. It's been pleasing that in this parliament—whether it be with the work of industry super, the work of the tax office, the work of parliamentary committees—this has become an issue that people have become more aware of, and that's a terrific thing. But in all of that work, all of those parliamentary inquiries and the ATO's work and the sector's work, this recommendation has never bobbed up. Nobody has ever said to the revenue minister, 'Hey, why don't you do a 12-month amnesty for employers who haven't been paying super to their workers since 1992?' And the reason it hasn't been recommended is because it's crazy. It is crazy. It's a double standard: it wouldn't be applied to workers in this country, so it shouldn't be applied to employers in this country either. We shouldn't be giving this free pass to dodgy employers who've done the wrong thing.

Usually, when employers don't meet their super guarantee obligations, they can be liable for penalties and charges. This includes the super guarantee charge, which is not tax deductible, and also can include additional penalties of up to 200 per cent of the amount of the SG charge. What this proposed amnesty says is that the SG charge will also be tax deductible for employers, so you get a tax break for doing the wrong thing. It really is quite remarkable, and that's why we're seeking to amend the bill to remove this amnesty from it.

I mentioned that unpaid super is a big and growing problem in this country. Industry super estimates that 2.4 million workers are losing $5.6 billion in payments each year—$5.6 billion robbed from the retirement balances of 2.4 million workers. That is an enormous challenge. No self-respecting parliament can allow that situation to continue, and we certainly shouldn't be giving tax breaks and pats on the back and encouragement to employers who do the wrong thing. A recent ATO audit found that, between 2009 and 2015, employers ripped off workers by almost $17 billion by short-changing them on super—many of them are low-paid workers and many of them are women—and that then turbocharges some of the other inequities in the superannuation system. We already have an adequacy challenge for low-paid workers and for women. Women, who have interrupted work patterns for obvious reasons, already retire with around half as much in their superannuation balances than men. That's ridiculous, and we can't have that continue. And we certainly can't turbocharge that problem by giving a free pass to bosses who don't pay super. It disproportionately impacts on women and it disproportionately impacts on low-paid workers, and we can't encourage that further, which is what the government is proposing to do with this superannuation amnesty. Every Australian worker deserves and is entitled to the superannuation guarantee to be consistent with the laws.

As I said before, an Australian worker hoping for a fair go from this government will be waiting a long time, will be waiting in vain. If the workers of Australia want a fair go, they're going to need a Labor government. They'll have the opportunity for that at the next election, whether it's in two months or 10 months or whenever. Australian workers can hold up our plans for them against the government's plan for them. We will be reminding the Australian people that this is the government that wants to give a tax cut to employers who've done the wrong thing in the superannuation system—and that's before we even get to the $80 billion tax cut for multinationals and the big banks, which will spray around offshore and have no noticeable benefit here in Australia. The Australian people know that this government fought tooth and nail for two years against a banking royal commission. They know that they took their penalty rates away, up to $77 a week. They know that there are all kinds of different ways that this government has been antiworker in this country.

Superannuation is a really proud public policy achievement of this country. It's something we're proud of on this side of the House, having been the architects of superannuation, but, more importantly and more broadly, it's something the whole country should be proud of. To have compulsory superannuation is a public policy triumph for Australia. It has its imperfections, and I mentioned some of them a moment ago. Adequacy for low-paid workers and the gender imbalance are serious challenges that we need to address.

Those opposite say they support superannuation. But their hearts are not in it. We know that their hearts are not in it, because they opposed universal compulsory super in the first place. They consistently voted against increasing the super guarantee above three per cent—they froze it multiple times in their budgets, delaying that super guarantee increase to 12 per cent. They tried to abolish the low-income super contribution scheme. People forget this, but they also tried to weaken the penalties paid by employers who don't pay the right amount of super. We beat them back in the parliament, especially in the other place, and we're proud that we did so. That really shows what they're on about when it comes to superannuation. That's before we even get to the attacks on industry super and all of these other sorts of things that the government have proposed and the other things that have been whispered to journalists around this building that they wanted to make happen, like taking the compulsory out of compulsory super; they wanted to make it voluntary—opt in, opt out. All of these sorts of things give us a sense that they don't believe in super; they never really did and they never really will.

On this side of the House, we're proud to defend and advance the superannuation system. We've been doing it now for a quarter of a century and we'll continue to do it—because we're proud to have put in place a super system which makes it more likely that Australian working people can retire with dignity, that they can save for their own retirement and that that money can be wisely invested so that, after a lifetime of work, they can have the dignity, living standards and security that Australians need and deserve.

As part of our commitment to super, we cannot support giving employers who've ripped off their workers a penalty holiday and a tax deduction, like those opposite are proposing to do in this bill. The member for McMahon moved his amendments because we want to see this amnesty taken out of the bill. The other three bits are not, in our view, offensive; there's some merit to them and we would support those. But we can never support something which turbocharges a problem that we already have in this country, which is the wage theft associated with unpaid superannuation. We cannot continue to have billions of dollars not paid to millions of Australian workers, when that is the superannuation that they need and deserve to save for a dignified retirement.