SAM MAIDEN:
As the debate over family trusts and Labor’s emerging policy agenda continues to rage, big changes to superannuation are being unveiled today. The Government insists it will make it easier for everyday Australians to have more control over their superannuation providers. No changes this time around to the tax treatment of super. Joining me now live from Melbourne is the Financial Services Minister, Kelly O’Dwyer. Good morning Kelly, how will changes affect every day PAYG tax earners?
KELLY O’DWYER:
Hi Sam, it’s great to be with you. Well the suite of changes that we’re announcing today will actually give everyday members, who are forced to put their funds aside in superannuation accounts through our compulsory superannuation system, much more confidence that their funds are being used in their best interests. We are strengthening the governance arrangements. We are giving sweeping new powers to APRA to be able to intervene if there are prudential problems with funds, and we are making sure that how members’ money is being used is far more transparent, so that it can only be used in their best interests, rather than the interests of the funds themselves.
SAM MAIDEN:
Have you been concerned, in the past, over the influence of unions in the superannuation space? Is this part of the reason of these reforms?
KELLY O’DWYER:
Well these reforms don’t target any particular segment of the superannuation industry. It applies across the board whether they are industry funds, whether they are corporate funds, or whether they are retail funds. We believe that when you’ve got a mandated system, a system that now manages two trillion dollars’ worth of Australian monies, that it needs to be managed properly. You can’t simply rely upon old foundation structures that were setup more than 25 years ago through our mandated systems in today’s ever-changing world. We need to make sure it’s world’s best practice. We need to make sure that if there are people are doing the wrong thing that there are criminal sanctions that apply to those people, that we have penalties in place that are appropriate for people who are doing the wrong thing. We need to make sure that people have got confidence that their monies that are being stored away for them, for their retirement income, are absolutely maximised. One element of that relates to insurance and making sure that people who’ve got multiple funds can more easily op-out of their insurance arrangements, which is what we’ll be doing with this package.
SAM MAIDEN:
So how strong will the new penalties be under these changes you are going to announce today?
KELLY O’DWYER:
Well with managed schemes there are both civil and criminal penalties that apply to directors and we are going to apply the same suite of penalties for those directors of super funds who do the wrong thing as well. We think that you need to have integrity in the superannuation system and in the governance arrangements that apply. We think that you need to have accountability for those people who are making decisions on behalf of their members. At the end of the day, we force Australians to put their wages aside, to defer their wages today, for their retirement income into the future. They need to be confident that that money is protected. They need to know that that money is going to work for them. They need to know that it’s not being eroded in fees and charges that work for the industry but that don’t work for them. And as I said, one of those issues where a lot member’s money is eroded is in relation to the default arrangements when it applies to insurance. Right now, it’s very difficult for people to opt-out of insurance and it can be a very big problem, particularly for young Australians, who might have more than one fund as a result of having part-time work and being forced into multiple fund arrangements because their EBA arrangements ensure that they are a member of more than one fund. They would find, unbeknownst to them, that they have multiple insurance premiums which are steadily eroding their superannuation retirement income into the future. And in some instances, it can erode it altogether, which, of course, means they get no benefit.
SAM MAIDEN:
Ok, let’s talk about family trusts. Are the rich using family trusts in Australia to opt-out of the tax system and paying their fair share?
KELLY O’DWYER:
Well no Sam, that’s not correct to say that. In fact it’s interesting that we’ve got the ALP, and Bill Shorten in particular, talking about trust arrangements when in only 2011 he said that trusts weren’t used for tax avoidance. But he has seemed to have changed his tune on that and now has charitable trusts, philanthropic trusts, trusts set up for small business, all in the crosshairs, all in his sights, forever increasing tax. We believe it’s important that the tax system has integrity and that’s right across the board. We don’t think that trusts should be used to be able to avoid or evade tax, which is why this government has actually set up a trusts taskforce, which means that we have put money into the budget to ensure that where people are doing the wrong thing, we go after them. We also have a Serious Financial Crimes Taskforce as well that works with the ATO and other agencies to go after people who are looking to avoid legitimate tax payments. So we don’t support people who are evading or avoiding their tax. We’ve got strong arrangements and integrity arrangements in place that go after them. But we say to people like Bill Shorten, what is it that you’ve got against charitable trusts? What is it that you’ve got against philanthropic trusts? What is it that you’ve got against disability trusts for people, for instance, who might’ve had a workplace accident who have got trust arrangements in place to ensure that they can be provided for in the future? Why are you going after them? Why are you going after small businesses? It just doesn’t seem right.
SAM MAIDEN:
OK. So you think that the Labor Party is going after family trusts and there’s no reform agenda to be had there at all? There’s nothing that needs to be tightened?
KELLY O’DWYER:
Well it’s completely unclear as to what it is that he’s proposing. It seems like it’s just yet another one of these ALP tax hikes. They figure that you can’t go high enough when it comes to tax. We think that Australians should only be paying the tax that they need to pay in order to provide the services and the infrastructure and the defence frameworks that we require as a nation. Frankly, we think that the Government should use the money that we get in taxpayer revenue as well as we possibly can and that the default reaction from Labor to simply hike taxes isn’t good enough.
SAM MAIDEN:
Can I ask you about these attacks on you in the week after you’ve just given birth to your second child. When you were on maternity leave there were calls from Liberals to have you replaced in your seat including calls that Peta Credlin should be the candidate there. Now, of course, she said she wasn’t interested in putting her hand up for a political career, was that tough for you personally or just politics?
KELLY O’DWYER:
She’s got a great gig on Sky, why should she be interested? Look, I mean frankly, it’s an issue in the past. I look forward and I work very hard every day for my constituency, I work hard in my job, I’ve been very fortunate that I’ve also just recently been able to have a baby. These things keep me very well occupied, I don’t focus on gossip.
SAM MAIDEN:
Peta Credlin, though, had some tough criticisms of you including on Sky News and about your performance as a Minister. What did you make of those criticisms?
KELLY O’DWYER:
Well look, everyone’s got a view, every commentator has got a view on everyone in the Government, the Opposition and the like, and when you’re a paid political commentator, I suppose that’s your job. But as I said, I focus every day on doing the job that I need to do. Today we’re releasing a superannuation package that has sweeping reforms to protect Australians and their retirement income. I think that’s a critically important task and it’s a task that keeps me occupied.
SAM MAIDEN:
And just finally, there’s been a lot of coverage of your role as a mum juggling work and family. You’ve said that you’ve been able to breastfeed during Cabinet meetings, you’ve been able to combine these things. Do you think that that is an opportunity that everyday women have in the workplace and do you think the Government needs to do more to allow that sort of flexibility for women other jobs?
KELLY O’DWYER:
Look I think it’s very challenging for any working mum, particularly one juggling breastfeeding and a full-time job and I think Sam, frankly, you’re probably a pretty good role model because you’ve got three kids and you’ve managed to keep your job full-time and managed raising a family as well, and I think you’re a fantastic role model in that regard. So it’s certainly not unique to women who are involved in politics, there are many women entrepreneurs who’ve set up small businesses who are managing family. It’s a challenge for everybody. Can we do more? Well I think by raising the issue, certainly we shine a light on this particular matter and I, for one, am very grateful for the support that I have been given by the Prime Minister and my colleagues Scott Morrison, Mathias Cormann, and others around the Cabinet table to be able to make the job work, but it doesn’t happen in isolation. You do need a flexible workplace, you do need to have really good staff that support you, and you do need a lot of family support. I’ve got a wonderful husband who’s been able to take time off work to care full-time for our two children over the next six months. I’ve got a wonderful mother and family, I’m not unique in managing these sorts of issues but it is a challenge for many of us who struggle to combine work and family.
SAM MAIDEN:
OK well great to have you on the program on Sky News today, we appreciate it Kelly, have a great day.
KELLY O’DWYER:
You too, thanks Sam.