14 October 1996 - 25 November 2001
Superannuation Industry (Supervision) Act 1993
Senator the Hon Rod Kemp
On 8 August 2001, the Senate rejected a Bill that would have offered Australian employees the right to choose the funds which would receive their superannuation contributions.
The Government's policy to provide employees with this choice was an election commitment, and the Senate has defied the Australian electorate and shown contempt for the rights of employees.
There had been lengthy and detailed negotiations with the Democrats and an agreement had been reached on how Choice of funds would be delivered.
However, the Democrats opposed the Bill on an unrelated matter. The Democrats claim that Superannuation Industry (Supervision) Act 1993 discriminates against same sex partners in relation to payments of superannuation death benefits.
The arguments of the Democrats are ill founded.
Under the Superannuation Industry (Supervision) Act 1993 as it currently stands, same sex partners can usually access the death benefits of their partner where they establish dependency.
Despite this, the Senate chose to reject the Bill, as explained in Senator Kemp's speech to the Senate below.
Senator KEMP (Victoria-Assistant Treasurer) (5.56 p.m.) – I rise to conclude the second reading debate on the Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998. I might say it is a disappointing conclusion to a very important public policy issue which has been brought before this chamber. The Labor Party attitude to choice has been well known. The Labor Party, for reasons which I think we all know, has set its mind against choice, and I think the arguments that Senator Sherry put forward show the utter thinness and poverty of the Labor Party position. The Labor Party position is essentially that workers should not have choice in relation to superannuation: the workers' funds should be directed into particular funds whether those funds are performing well or poorly.
Senator Sherry – They are performing.
Senator KEMP – Senator Sherry, the reality, as you know, is that there is a variety of performances.
Senator Sherry – They're very happy with them.
Senator KEMP – No-one complains about a well performing fund, but members whose superannuation is tied up in a poorly performing fund have a lot of reason to complain. In fact, unless this Senate can progress this debate-as the awareness of superannuation, the importance of superannuation, moves on-a lot of people will be asking why they are not allowed to direct contributions to funds of their particular choice. That would be a very valid question, and until this bill goes through the answer will be: because the Senate-and the Labor Party in particular-was opposed to giving them choice.
Senator O'Brien – No, giving the employer the choice.
Senator KEMP – Senator O'Brien shows his complete lack of appreciation of this issue. Senator O'Brien is the spokesperson, as Senator Sherry is, for particular interests, but the fact of the matter is the interests which are important in this debate are employee interests.
Honourable senators-Hear, hear!
Senator KEMP –Employee interests are the interests here, and the trade union ALP does not speak for employee interests, I might say. What the trade union ALP speaks for is, of course, union interests. The Labor Party's approach to this is extremely unfortunate, to be quite frank. We can apparently allow an individual to choose his employment, to determine where his investments are, whether to purchase a house or not, whether he gets married or not and indeed to determine whether he wishes to have children or not and take on huge commitments. But, according to the Labor Party, we cannot allow that employee to choose where his superannuation contribution should go. That is the patronising nonsense that the Labor Party puts forward.
This debate will continue for a long period of time, but I point out to the Labor Party that they will be constantly reminded when there are complaints from employees about poorly performing funds and how their contributions continue to be directed to those funds. Letters will be sent to Senator Sherry, who will be kind enough to take particular responsibility for what has happened in this case. Senator Sherry, I point out to you that, in your speech, you showed no understanding of what had been proposed. What you did today will come back to haunt you and the Labor Party.
Let me now turn to the Democrats' position. It is true that we have had a very long period of discussion with the Democrats. It is true that those discussions were difficult, but we stayed at the table and we kept working at it. I think we came to a very good result- an excellent result-a result which would be welcomed by the industry, employees and, I believe, the Australian community. It is a great shame that, because of an issue which is quite separate from choice of funds, the Democrats find themselves unable to proceed to implement an agreement which they were a party to, which they worked on as hard as we did and which developed, I believe, a very satisfactory model for choice in order to move this debate further forward. I think it is a great pity that this has happened, to be quite frank.
I receive a lot of letters in relation to superannuation, but I cannot recall a letter that I have received from a same sex couple telling me that an individual, because of the death of his or her partner, has not been able to access dependency arrangements under superannuation. I think Senator Greig should carefully reflect on that. I do not know whether Senator Greig has fully appreciated that. There are a lot of issues in superannuation, Senator Greig, but I have to point out to you that this is an issue of how an individual is affected. As I said, I cannot recall a letter-there may have been one, but I cannot recall a letter. I receive letters about a whole host of issues. Senator Greig, as a result of your own interest in this matter, I have briefed you on it to try to indicate to you how the current arrangements work. It seems to me that you have failed to appreciate how the current arrangements work and you have taken this particular step which has inclined your colleagues to act in this particular manner. It is not a light matter that has occurred.
This is a very important policy; I believe that this is a very important issue in superannuation. It provides the freedom and the choice that individuals are quite entitled to exercise in relation to where their superannuation contributions go. I believe that you do not understand how the superannuation system currently works, and I think that is a great pity. The fact of the matter is that you have persuaded your colleagues, despite all the efforts and all the work that went into this to produce what I believe is an excellent model which will benefit the workers of Australia-
Opposition senators interjecting-
Senator KEMP – Senator Conroy and Senator Sherry are having a little giggle over there. As the debate goes on in the years to come, Senators, and people complain that their contributions were stuck in particular funds-the contributions that they were saving for their retirement-when they did not have the freedom to direct those contributions into the areas that they wanted, we will say that, in this important debate, it was Senator Sherry and Senator Conroy who were laughing and giggling in the front row. It is pathetic. It shows, frankly, the paucity of the Labor Party position. It shows you the authoritarian nature of the Labor Party. The one thing that the Labor Party hates is choice. Whatever public policy you get into, the one thing that the Labor Party cannot take is choice. This is another example where the Labor Party has shown its true colours.
I think it is a great pity that the Democrats have not felt that they are able to proceed with an agreement which we negotiated in good faith. I think the model which we produced, after many tortuous hours, was a good model. It was good for employers, it was good for employees and it was good for the industry. It had a lot of advantages; it set up arrangements for proper consultation and monitoring; it made sure that there was an education program that would properly inform employees. It achieved all those things and it provided time for the scheme to be brought in so that employers, employees and the industry would have time to adjust. But that has not eventuated. I have to say that, to me, that is a great pity, because this was an opportunity for the Senate to grasp an important public policy which could have an important effect on superannuation for the good of this nation. It happened for reasons which I think have been explained and, as I said, it is a great pity.
I understand that Senator Allison and I negotiated in good faith. I did not doubt the commitment of Senator Allison. It is true that Senator Allison has been unequivocal about this issue. Nonetheless, I think we went to the table in good faith, we negotiated in good faith, we reached an agreement in good faith and, for reasons which have now transpired, this agreement now cannot be put into effect. To me, that is a great pity, to be quite frank. It is a great pity not because of the effort that people might feel is wasted, but it is a great pity for Australian employees.
I hope that in a comparatively short period of time we will be able to move forward on this issue. I think that the model that has been established is the way to move forward. Every party has to examine its own conscience on this and every senator has to examine his or her own conscience. A very bad decision has been made, in my view-not based on the facts, not based on how superannuation in the vast majority of schemes works, but based on an ideological view that was going to be proceeded with regardless of the facts of the matter. As I said, this model would have provided real choice for employees.
Senator Sherry got up and said what a dangerous thing this was. I was in Western Australia recently, where they have choice and it works extremely well. It is not an issue with employees-they like it-and it is not an issue with employers. It works.
Senator Sherry – Quote some evidence, Rod.
Senator KEMP – You have not been over there, Senator Sherry-you have been thinking too much about the surcharge. You have never been able to get your mind off the surcharge. Let me tell you: it works well. One of the options that is available in that scheme is unlimited choice-exactly one of the options which is available in the scheme which we have put before this chamber.
What has happened here today is a disappointment. Those senators in the Labor Party were always predictable on this. The Labor Party never came to the table with any sign that they were prepared to think constructively. The Labor Party's position is: `We tell you, the employee, where to put your money, and don't you dare protest.' That is exactly what the Labor Party's position is. That is the contempt with which the Labor Party continue to treat workers. That is your position and it is a disgraceful position, in my view. Frankly, Senator Sherry, the Labor Party, Mr Simon Crean and Mr Kelvin Thomson will find out that a lot of people in the coming months and years will be extremely unhappy as a result of this decision that the Labor Party have made.
I have been through the actions of the Democrats. Again, Senator Greig, I am very happy to take you through exactly what happens in this area, and that would explain to you why I do not receive letters on this issue about people who are adversely affected. What have you achieved? You have prevented large numbers of Australian workers having the right to determine where their contributions go-that is what you have achieved. Senator, if you look at how superannuation works for the vast majority of funds, I do not believe that the concerns that you have are at all justified.
The government will continue to want to progress choice in superannuation. We are always open to negotiation and discussion. We have given up on the Labor Party. The Labor Party has no policy.
Senator Conroy – You won't even talk to us.
Senator KEMP – What is the Labor Party's policy on superannuation? `Oh, we'll have a review after the election.' Five years of effort and they came up with this brilliant policy: `We'll have a review after the election.' What a truly pathetic effort; and Senator Sherry, because you spend so much of your time on superannuation, you must bear a heavy responsibility for that. I conclude the debate, but I make the point once again that this government will certainly continue to pursue the policy of choice in the interests of Australian workers.