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senate vote 2020-08-25#2
Edited by
mackay staff
on
2020-10-02 12:40:34
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Title
Bills — Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019; in Committee- Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 - in Committee - Superannuation guarantee eligibility threshold
Description
<p class="speaker">Jane Hume</p><p>I table a supplementary explanatory memorandum relating to the government amendments to this bill, and I seek leave to move amendments (1) and (2) on sheet UD113 together.</p><p>Leave granted.</p>- The majority voted against [amendments](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/display.w3p;query=Id%3A%22legislation%2Famend%2Fr6447_amend_8a73013a-6547-4691-8d4b-71f3424b0d50%22;rec=0) introduced by Queensland Senator [Larissa Waters](https://theyvoteforyou.org.au/people/senate/queensland/larissa_waters) (Greens), which means they failed.
- ### Amendment texts
- > *(1) Schedule 1, page 3 (after line 27), after item 4, insert:*
- >
- >> *4A Subsection 27(1)*
- >>
- >> *Omit “(1)”.*
- >>
- >> *4B Subsection 27(2)*
- >>
- >> *Repeal the subsection.*
- >
- > *(2) Schedule 1, page 4 (after line 16), at the end of the Schedule, add:*
- >
- >> *8 Application provision*
- >>
- >> *Despite the repeal made by item 4B, subsection 27(2) of the Superannuation Guarantee (Administration) Act 1992 , as in force immediately before the commencement of this Act, continues to apply at and after that time in relation to an employer for an employee if the employer is entitled to a jobkeeper payment (within the meaning of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 ) for the employee during the calendar month.*
- ### What is the main idea of the bill?
- According to the [bills digest](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1920a/20bd104):
- > *The purpose of the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 (the Bill) is to amend the Superannuation Guarantee (Administration) Act 1992 (SGAA) to ensure employees under new workplace determinations or enterprise agreements have an opportunity to choose the superannuation fund for their compulsory employer contributions.*
<p>I move government amendments (1) and (2) on sheet UD113 together:</p><p class="italic">(1) Schedule 1, item 5, page 4 (line 2), omit "1 July 2020", substitute "1 January 2021".</p><p class="italic">(2) Schedule 1, item 6, page 4 (line 4), omit "1 July 2020", substitute "1 January 2021".</p><p>Question agreed to.</p> <p class="speaker">Larissa Waters</p><p>by leave—I move Australian Greens amendments (1) and (2) on sheet 8971 together:</p><p class="italic">(1) Schedule 1, page 3 (after line 27), after item 4, insert:</p><p class="italic">4A Subsection 27(1)</p><p class="italic">Omit "(1)".</p><p class="italic">4B Subsection 27(2)</p><p class="italic">Repeal the subsection.</p><p class="italic">(2) Schedule 1, page 4 (after line 16), at the end of the Schedule, add:</p><p class="italic">8 Application provision</p><p class="italic">Despite the repeal made by item 4B, subsection 27(2) of the <i>Superannuation Guarantee (Administration) Act 1992</i>, as in force immediately before the commencement of this Act, continues to apply at and after that time in relation to an employer for an employee if the employer is entitled to a jobkeeper payment (within the meaning of the <i>Coronavirus Economic Response Package (Payments and Benefits) Rules 2020</i>) for the employee during the calendar month.</p><p>As I was saying before, the purpose of these amendments is to remove the $450 threshold below which workers don't get paid superannuation. People might recall that back in, I think, 1992 this threshold was inserted. Essentially, if you are a worker who is earning less than that each month you don't get paid superannuation by your employer. The reason that we have long thought that this was inequitable and needs to be removed, which is what the amendment would do, is that it has a disproportionate effect on a number of workers, and in particular it has a disproportionate effect on women workers. We already know, sadly, from many Senate inquiries and many studies, that on average women retire with approximately half the superannuation of their male counterparts. One of the contributing factors to this enormous discrepancy in superannuation balance is this $450 threshold rule. There was a purpose to it originally and it was to align it with what was the then tax-free threshold but that's since increased, as is appropriate. We've also got the low income super tax offset, or LISTO, which also obviates the need for this threshold to continue.</p><p>In short, this threshold disproportionately affects women, disproportionately affects casual workers and disproportionately affects workers that have multiple jobs, because the threshold applies per employer. For example, if you are a young person who in this economy is lucky to have a job, or several, and you're earning less than $450 a month from each of those employers, none of them have to pay you superannuation. This is part of the reason why this is an inequitable rule—</p> <p class="speaker">Slade Brockman</p><p>Senator Waters, we might have to just ask you to pause again. Your connection to us is breaking up. I'm not sure if there is anything we can do about that. Minister, you have the call to respond to so much of Senator Waters' points as you wish to. We will try to and re-establish that connection in the meantime.</p> <p class="speaker">Jane Hume</p><p>The government will be opposing this amendment that removes the $450 rule. Senator Waters is right; the $450 rule has been included in the superannuation system since compulsory superannuation began in 1992. I agree that looking at the $450 threshold rule does merit some consideration; however, now is not the time.</p><p>When it was first established it was established for two reasons: one was because there was a feeling that those who earned below the tax free threshold should not necessarily have to participate in this compulsory superannuation scheme and the other was that it was an administrative burden for businesses. Those issues have changed, but there are still many issues to consider around moving that threshold. There are implications for small businesses. Without the implementation of a policy to ensure that members are only defaulted once into superannuation products, removing the threshold may in fact result in more duplicate and low-balance accounts. The government has agreed to implement the recommendations of the financial services royal commission in that a person should only have one default superannuation account.</p><p>The TEMPORARY CHAIR: Thank you, Minister. I will just try and go back to Senator Waters, if she can hear us.</p> <p class="speaker">Larissa Waters</p><p>I can now, Chair. I'm not sure at what point I cut out and what pearls of wisdom to give you all again!</p> <p class="speaker">Slade Brockman</p><p>The minister did respond. I'm not sure if you heard the minister's response?</p> <p class="speaker">Larissa Waters</p><p>No, I'm afraid I wasn't able to hear that. I've only just been able to dial back in. I suspect the minister and I don't agree on this issue. I'm just taking a wild guess!</p><p>The TEMPORARY CHAIR: I suspect you're possibly right, Senator Waters. Did you wish—</p><p>Could I just get a stick from the chair as to roughly at what point I cut out? There were a couple of facts and figures that I was hoping to get on the record. This is not a test!</p><p>The TEMPORARY CHAIR: Honestly, I couldn't say precisely. It faded out gradually. I would take the opportunity to get those things you want to get on the record on the record, Senator Waters.</p><p>Thank you, Chair. With your indulgence I will do that now. As I was saying, having the $450 threshold below which employers don't have to contribute to superannuation for their workers disproportionately—</p><p>The TEMPORARY CHAIR: I think we might go to Senator McAllister. I think we will just see if we can get those technical issues ironed out before we go back to Senator Waters. Senator McAllister, you have the call.</p> <p class="speaker">Jenny McAllister</p><p>Labor of course is extremely concerned about the retirement income gender gap. It was Labor senators who championed the inquiry which resulted in the report <i>'A husband is not a retirement plan': achieving economic security for women in retirement</i>. I think it proved to be a very important inquiry. It was conducted by senators from all parts of the chamber and resulted in a unanimous report with many recommendations to improve retirement outcomes for women.</p><p>I listened carefully to Senator Hume's response. I note Senator Hume does not intend to support this Greens motion, and Labor does not intend to support it either. We will consider a wide range of policy options before the next election to tackle the challenges faced by women in retirement to improve their economic security, but this is not the bill where we will make that decision. We will make that decision as part of our considerations in the lead-up to an election. However, I did listen carefully to Senator Hume's response, and I make this observation: the government can point to very few things that it has practically done to support women's outcomes in retirement.</p><p>The government likes to come into this chamber and say that this is a priority, to provide comforting words to women that the government is concerned about their economic security in retirement, but it is difficult to identify a single measure in the last seven years that has actually gone to the issues that were canvassed in the report and that are routinely raised by women when you speak to them. The only measure that the government ever points to that in any way goes to these issues is the capacity for people to contribute above the cap in terms of voluntary superannuation contributions.</p><p>The truth is that most women are not in a position to make contributions above the cap. Most women do not have tens of thousands of dollars lying around, and most women are not, therefore, advantaged by a system that allows large volumes of cash to be popped into a super account as a one-off. That doesn't help, but it's the only measure that Liberal senators ever point to when these concerns are raised in this place. I say to the government: it is not good enough. You have been here for a long time. You are in your eighth year of government. Government provides marvellous opportunities to actually make real change in the lives of Australian people, and in this instance you have had the opportunity to make real change in the lives of Australian women, and it is immensely disappointing there has been no progress in the seven years you've been in power.</p> <p class="speaker">Nick McKim</p><p>Obviously, we're unable to hear from Senator Waters due to some unknown technical issue. My suggestion is that it is unfortunate that that's the case but I don't believe that the Senate can sit around and wait indefinitely until the technical issue is sorted; so, if I need to, I will now put Senator Waters's amendments or suggest that you put Senator Waters's amendments to the chamber.</p><p>The TEMPORARY CHAIR: I will if there are no further contributions. Senator Patrick?</p> <p class="speaker">Rex Patrick</p><p>Sorry for the late arrival. Minister, you say that the government is considering this. What's the time frame? What's the time frame in which you are going to come to this chamber with legislation that deals with this threshold?</p> <p class="speaker">Jane Hume</p><p>Thank you for that question. I can't give you a time frame. What I can say is that this issue was specifically recognised as part of the terms of reference in the retirement income review. That review has reported to the Treasurer, and that report is with the Treasurer right now.</p> <p class="speaker">Rex Patrick</p><p>I go back to Senator McAllister's point. This has been a long time in place. It's been talked about for a long time. Indeed, we've been dealing with this piece of legislation for some period of time. Are you not in a position to make a firm commitment to the Senate as to a time frame for introducing amendments that deal with this issue?</p> <p class="speaker">Jane Hume</p><p>Senator Patrick, I can't give you a time frame on dealing with that specific issue, but, as you know, this government has initiated and, indeed, implemented a series of reforms to superannuation over its last seven years in government and it will continue to do so until the system is efficient and high functioning, as it should be, to serve all Australians.</p> <p class="speaker">Slade Brockman</p><p>The question is that amendments (1) and (2) on sheet 8971 be agreed to.</p>
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