It gives me great pleasure to stand here in defence of superannuation, a great Labor legacy and Labor initiative. I too wish to address both the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020 and the second reading amendment:
That … the House calls on the Government to ensure that all Australians can enjoy a dignified retirement, including by committing to:
(1) the scheduled and legislated increases to the superannuation guarantee; and
(2) adequate funding for the aged pension".
It beggars belief that those opposite, the paragons of the private market and private industry, are against superannuation. Superannuation gives workers a decent retirement, from the share market. You'd think the loudest champions should be on that side of the House. This is not some sort of socialist utopia. This is the private market providing a dignified retirement for millions of Australian workers. The proof is in the pudding. We've had 30 years of proof—seven per cent average returns. You go to a bank, or go anywhere in this country at the moment, and try and get a seven per cent return. But that's what superannuation has been yielding for workers, and those opposite are intent on tearing it down, driven by the nutter faction in the Liberals. We're told all the time that the Liberals don't have factions. Well, we saw the truth of that on 60 Minutes on the weekend. The nutter faction over there is driving this push to drive down and dismantle Australia's world-renowned superannuation system.
Those opposite were almost rabid in their enthusiasm for encouraging Australians to dip into their superannuation as a response to the economic crisis accelerated by COVID-19. The Prime Minister's response to soaring unemployment and economic uncertainty was to tell Australians who are doing it tough that they're on their own, that their only option is to raid their own retirement savings. Essentially the government have privatised the pandemic. They've outsourced the pandemic. This, after all, is a shared, global pandemic. It's a shared disaster. You would think that we were all in this together. But the government has told workers, particularly young workers and women workers: 'If you need support during this time of crisis, you can raid your own superannuation accounts. We'll let you do that.' And three million Australians have said, 'If that's the only choice available to us, that's what we'll do.' As a result, 600,000 Australians have completely emptied their superannuation accounts. They've gone from a $10,000 or $20,000 balance to zero dollars. They've got to start again.
We all know in this place that superannuation works by the magic of compound interest. The more you put in early in life, the more it accumulates, like a snowball gathering snow. It accumulates more and more and more over your working life. But, if you don't have it early, if you wait till your 30s and your 40s, you're not going to accumulate the compounded interest to have a decent retirement at the end of your working life. Those opposite have told Australians: 'You're on your own. Access your own retirement savings to get through this pandemic.' It is an absolute disgrace. They've privatised the pandemic. They've outsourced it. They've put the economic burden of this pandemic onto the shoulders of working Australians and their families.
In my electorate of Lyons, more than $1 million of retirement savings has been withdrawn from some 14,000 super accounts, with more than 1,500 emptied entirely. The vast majority accessing their super are under the age of 35. It's a cohort that has been significantly affected by the pandemic and the recession, and they're now going to be even further impacted in the future because they will miss out on the benefits of compound interest on their super savings.
Industry analysis has estimated that a 20-year-old who withdraws $20,000 under the government's scheme could lose more than $120,000 from their retirement balance, a 30-year-old who accesses $20,000 could lose about $100,000 in their retirement and a 40-year-old could lose more than $63,000. It's devastating for retirement incomes. What's more, it's the most expensive $20,000 that these workers will ever spend. If a young worker takes out a loan of $20,000 at four per cent for 30 years, she would pay back less than $15,000 in interest and it would cost her $22 a week in repayments. But, if she empties out her superannuation account by withdrawing $20,000, she is robbing herself of the ability of that $20,000 to attract compound interest over her working life, which, at the present rate of return, would see it go to $100,000. So, instead of paying four per cent interest to get that $20,000 and paying just $15,000 in interest repayments, she is effectively paying 16 per cent interest for 30 years; she is paying out $80,000 in order to access $20,000. That's the legacy of this government: robbing Australian workers and their families.
I understand that people have been doing it tough. Wage growth has stalled, jobs have been lost and families are struggling to make ends meet. So it's no wonder that so many felt that they had no option but to access their accounts when the government made them available. But there is inherent unfairness in a situation where a government encourages its own citizens to raid their own retirement savings in order to ease the financial pressures brought on by a global recession and, in the process, disadvantages those same citizens in the long term. They have effectively asked their own citizens to rob themselves of a decent retirement.
This will have an enormous cost to so many Australians. In particular, young people will bear the burden of it. They've had to fund their own pandemic response after being so seriously neglected by the government in other areas. This is a cohort of Australians who have suffered two financial crises already in their young lives—the 2008 GFC and now the pandemic. Due to good governance and good management Australia avoided a recession, unlike the rest of the world, during the GFC. Thank you, Wayne Swan. Young people are having to deal with high HECS and HELP debts; a horrific job market, which is only going to get worse; poor wages growth; expensive housing; and fractured health care. They are being governed by a government that simply does not care about their future beyond slogans and employing Scott Cam to do a few TV ads.
Superannuation is what guarantees older Australians a retirement of comfort and dignity. It is an innovative initiative that has benefited countless Australians for many decades, allowing them to enjoy their retirement after year upon year of hard work and economic contribution. It's incredibly disappointing, and shameful, that the Morrison government is chipping away at a program that has the runs on the board. After 30 years, the evidence is there that it works. For purely ideological reasons, members of this government are campaigning against universal superannuation for workers. It beggars belief. I remember a cartoon that was in the British press some years ago in which a Tory government minister is visiting a hospital. He says to a nurse, 'What do you do here?' The nurse says, 'We help sick people.' The minister says, 'Who makes the money?' The nurse says: 'Nobody makes money. We help sick people.' The minister says: 'I think we're speaking a different language. I don't quite understand. Who gets the dough?' The nurse says, 'No, we help sick people.' The minister says: 'Listen to me. Who makes the money?'
I can't help but think that's what's going on here, because, as the member for Bruce pointed out, industry superannuation funds are the ones that make the most money for their members.
If you belong to an industry super fund you will have a better retirement than if you belong to a retail super fund, which tend to take out more management fees. The retail super funds, the big banks—they make the money. And the government has no problem with them, even though retirees have a worse retirement belonging to those funds. The funds that this government has a problem with are the industry funds, which generate a better return for members but which, of course, don't make money for the friends of the government. I do go back to that cartoon, and I can't help but think it's the same thing that applies here. The friends of the government are not making the money from superannuation, from universal superannuation, and that's why they are so ideologically opposed to it.
It really does say something when a national government is ruled by its 'nutters faction'. In the chamber the other day, I followed the member for Goldstein during one of his more dramatic appearances railing against super—I think he called it 'money laundering'. That's how he referred to superannuation: 'money laundering'. Even though the returns to members are seven per cent, they retire with dignity and they retire in comfort, he refers to it as 'money laundering' because the unions are involved. That's where we're at. The government is just ideologically opposed to superannuation because unions are involved. Even though workers are getting good retirements out of superannuation, they're retiring with dignity and retiring in comfort, those opposite want to cut back on it because of their ideological opposition to union involvement. It really does beggar belief.
Australia's superannuation system was endorsed by the World Bank in the early 1990s. They recognised the benefit of our three-pillar system, where we benefit from a system of compulsory superannuation and the age pension, and both are enhanced by voluntary retirement savings. The endorsement we received was to say that our system was the world's best for retirement income—the world's best. That's what those opposite are so keen to dismantle. That declaration was made less than 30 years ago, and yet here we are in this chamber looking at a government that is trying to wind back and destroy this system—not weaken it, destroy it.
Women have long been left out of our superannuation system, and we need to strengthen their involvement, not weaken it. There is a substantial gender gap, with the balance of superannuation accounts being, on average, around $15,000 less than for men. There are a range of reasons for it. Another issue is the increasing rate of workforce casualisation, which will see hundreds of thousands of Australians miss out on superannuation payments as a result of the nature of their work. We should be addressing these issues as a matter of urgency. We should be creating a better, more even superannuation playing field, not making changes that disrupt, dismantle and eventually destroy the foundations of a superannuation system that has been inarguably good for the country.
I remind the House that, in 2015, Australia's superannuation pool was $2 trillion. By 2025, it will be $4 trillion. By 2035—$10 trillion. That's a massive savings pool, a massive investment pool for the nation, for long-term investments. Superannuation accounts are not just like banks accounts; they're not short-term bank accounts. It's a long-term investment strategy. It's a nation-building program. It's good for workers in their retirement, but it's fantastic for the country. If those opposite continue on their path to dismantle Australia's superannuation system, it will be bad for the country. It will be bad for the economics of the country and bad for the workers involved. I just don't see who wins.
Other speakers have mentioned that, when superannuation was first proposed, there were six to seven workers for every single retiree. Those workers were contributing to taxes and the pension. Now we're down to four workers for every retiree, and by 2030 that will drop to three to one. So we have an ageing population and we have fewer workers able to contribute to the tax pool which will fund pensions. We need a self-reliant retirement plan. I come back to the comment I started with: you would think those opposite would be all for the Australian superannuation system. It's about self-reliance, built on workers owning shares in private companies. You would think it would be nirvana for those opposite, yet here they are trying to dismantle it. It's a great shame. I stand here with great pride in supporting Australia's world-best universal superannuation system.