BILLS; Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018; Second Reading

June 20, 2018

Mr HAYES (FowlerChief Opposition Whip) (10:13): This is becoming more and more of a pattern of this government: make the bill wide enough and slot things into it which will be unconscionable in the full knowledge that it becomes unacceptable. There are many decent things in this bill, things that should be supported by both sides of the House, but then this government puts into the bill a superannuation guarantee amnesty, a holiday for people who break the law in relation to compulsory superannuation. They want to slide this through and thought that everyone here would simply say, 'Well, the overall benefits—yeah, we'll just go along with that.'

I was part of the trade union movement that fought long to get compulsory superannuation in this country. As Bill Kelty used to say, it was probably the single biggest thing that the trade union movement has been able to establish in the last 50-odd years or perhaps even longer. Having proper funds established for people's retirement so they can retire with dignity is something that is right, and it is just, and it was certainly worthwhile for us to fight for as a principle all those years ago.

I will just remind the House that when the first notion of compulsory superannuation came in, it was only supported by one side of this House. It was supported by the Labor government. Each of those on the other side voted against compulsory superannuation. They voted against it on the basis that people had superannuation in those days. People who were professionals and could construct their own superannuation and retirement funds, such as doctors and lawyers and others, were already covered by their own superannuation requirements; and it was indeed fortunate for many Commonwealth and state public servants that they also had super. But for those of us who grew up in working-class backgrounds, superannuation was something we didn't know about. When you got to retirement age, you went onto the age pension. That was a suitable retirement that those opposite thought was there for the masses—you could go onto the pension. We thought: life has to be better than that. People putting in year after year, working and making a contribution, not just in their workplace but effectively to this country, deserve better than simply being told they can all just go onto the age pension and that's their lot in life post employment.

Superannuation is a touchstone issue for us, something that we believe so passionately in. Paul Keating was right: this needs to be at a level that will give people a decent lifestyle in retirement. Yes, it is a form of saving. But when the first round of superannuation came in at three per cent, can I remind everybody here, that was a direct trade-off from wages. It was called a 'productivity increase', which the then Industrial Relations Commission determined. That was traded off, for all Australian workers, for the benefit of superannuation. That's where the three per cent came from. That's how it all started. Those who don't think workers are entitled to it says more about them than it does about Australian workers.

Today we are here to talk to a piece of legislation in which the government want to insert a provision that allows people to hide from their obligations to pay employees their compulsory superannuation. Imagine if they gave the same notion of being able to hide from paying employees their proper wages. We would call that wage theft. Given that superannuation is an integral part of an employment package these days, whether it be wages, superannuation or other conditions, this piece of legislation that those opposite are bringing into the parliament today is basically saying: 'We'll give you a holiday. If you haven't made the appropriate contribution to your workers over the past 25 years, we'll just wipe the slate clean, provided you make the difference up, provided you pay it. But we'll also give you a tax deduction for paying it—not a penalty, not a charge, not a jail term, which you probably would encounter if you didn't pay your employees properly for 25 years, but a tax deduction.' So for all those in the gallery, if this piece of legislation gets through, you will have the honour of paying a tax deduction for employers who have broken their obligation to pay workers their appropriate contribution for superannuation going back 25 years. It just beggars belief that the government would want to put this amnesty, or this holiday from payments, into a piece of legislation that incorporates elements of reasonable merit—merit to the extent that it would be supported on both sides of this House.

We want people to obey laws. We have penalties. Sure, people in ordinary life know that the police will detain you when you're breaking the law, because there is a penalty. There are obligations on people. We set strong obligations on people to do the right thing and strong deterrents to stop people doing the wrong thing. People will incur penalties. If you don't pay your tax on time, the Australian Taxation Office will fine you. Banks have been fining people day in, day out. That's one of the reasons we wanted a royal commission. Banks were willy-nilly fining people for all sorts of things. But the whole idea of getting people to comply with a scheme of arrangements is to do the right thing; therefore, we do have penalties attached to them, if you willingly choose not to do the right thing.

This bill is just a display of this government's readiness to support dodgy employers who willingly and very concertedly have decided to cut people's conditions short by not meeting their obligations in terms of their superannuation contributions. These are dodgy employers. Let's face it, any reputable employer out there is doing the right thing. There are penalties already imposed on employers who do not do the right thing. For instance, they can be required to not only pay their superannuation to the employee but pay at a double rate; that's a penalty imposed by the Australian Taxation Office. But this now undermines all that penalty regime.

We on this side understand the superannuation guarantee system. We understand it thoroughly because we are the party that brought the superannuation guarantee to this nation. Voluntary superannuation contributions and a means-tested, government-funded age pension join together to form an integral part of dignified retirement in this country. As I said, we understand superannuation; we brought it here. They oppose superannuation at the outset.

Dealing with the non-payment of superannuation has got to be a priority for everybody. It has always been a priority for Labor. We want to ensure that our superannuation system is fair, sustainable, robust. Above all, it should serve the main and intended outcome that we want for Australian workers, and that is being able to retire with dignity. That's why penalties were imposed on employers who do the wrong thing. Under current law, an employer who does not meet their superannuation guarantee contributions can be held liable for penalties and charges. These include superannuation charges that are not tax deductible and additional penalties that are up to 200 per cent—double—the unpaid amount. That should be an incentive for an employer to do the right thing. If you don't, you are going to be penalised. The bill before us today seeks to change that by introducing a 12-month amnesty.

If this legislation gets through, employers will have a full 12 months to go to the authorities and declare: 'Look, I have done the wrong thing for the last 25 years. Very, very sorry. I'll pay what I owe my employees. I won't double it or pay them a special commission. I'll just pay what I owe them. When I do, I understand that that's going to be tax deductible.' If they put that argument to the government after this legislation gets through, if it does, those opposite will be nodding their heads and saying, 'Yeah, that's what we meant by it.' That's why I say to the people in the gallery: through this piece of legislation, which effectively rewards dodgy employers who do the wrong thing, you will have the honour of making up that difference.

Just think about it. If an employer didn't make the right payment to its employees over 25 years, how much is that going to cost an employee in their retirement? Imagine: you're turning 65, you think you're about to retire—although they want you to work until you're 70, but we'll leave that aside—and you find out that you don't have sufficient funds in your account. You get your accountant, if you can afford one at that stage—well, they can—to go back and have a look at this and you work out, 'Oh, look, they've short-changed me!' You're not going to get much support out of that mob over there, because they've just rewarded the very person who has short-changed you over that whole period.

And imagine—and I know no-one up here would—if, over the last 25 years, you'd been stealing from your employer. They didn't find out, and it went on for 25 years. Then all of a sudden they had a new accountant brought into the organisation and found out that you had been systematically knocking off money from the company over 25 years. The police would be called. You'd probably be charged immediately and you would be taken to court. And, over an issue like that, it's highly likely you'd be doing jail time.

Have a look at those two different scenarios. The government is going to give special treatment to a dodgy employer who's prepared to take money from an employee, or not make the appropriate contribution, which is basically the same thing as wage theft. But, if you're an employee caught knocking off material or money from an employer, you will be subject to the full weight of the law. If you think that's hypocritical, so do we, and that's why this piece of legislation cannot be supported and why I support the amendments put forward by the member for McMahon.

We need to have a system in this country where everyone understands their obligation, and, to do that, maybe sometimes we've got to make things clearer to people. But we should not be giving a holiday to people who wilfully do the wrong thing, in this case by exploiting their employees. It is such a ridiculous situation that the government would choose to bring this part of the proposal through with a bill that, as I say, has many aspects of merit. This defaces what that would stand for, and it also shows where this government sits in relation to employers and employees in this country. (Time expired)