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    BANK TAX BUNGLES NARROWS BLAME FOR $30 BILLION ‘LEAK’

    Last week’s revelations of a $2 billon black hole in the Government’s bank tax have been compounded with Senate Estimates uncovering details around the leaking off official information concerning the bank tax on Budget day while the market was still trading.

    The Treasurer needs to come clean and tell the Australian people that he or his office weren’t involved in this leak that saw billions of dollars in bank share value lost in the afternoon trading.

    Treasury Secretary revealed in questions from Labor Senators that ASIC and the AFP were investigating the leak.

    Mr Fraser confirmed that critical information relating to the time he was due to call bank CEOs was published as part of the bank tax leak was closely held by “four or five” Treasury officials, staff in the Treasurer’s office and “the Treasurer would have been aware too”.

    The Australian Financial Review reported online at lunchtime ahead of the Budget lock-up on Tuesday 9 May that:

    The sources said Treasury Secretary John Fraser will call the big four bank chief executives on Tuesday night at 6.30pm before Mr Morrison delivers the bad news.”

    Mr Fraser confirmed Treasury staff were cooperating with ASIC in its investigation.

    The Treasury Secretary added that:

    “On the basis of what we have been told by our staff, on the basis of informed discussions with my senior executives as to who knew when what, I would be devastated. I remain, I would be devastated, if I had thought that one of my staff had been responsible for this. I have seen nothing in the time I have been Secretary to make me think that it came from Treasury, but can I give you a guarantee? No. I don’t think anybody can.”

    The Treasurer needs to be similarly as transparent as the Treasury Secretary and outline what steps he has taken to ensure himself that the leak did not originate from his office.

    MONDAY, 29 MAY 2017

    This is a joint media release with Labor's Shadow Treasurer Chris Bowen MP.

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    WHO SUPPORTS LABOR’S PLAN FOR A DIRECTOR IDENTIFICATION NUMBER, TO CRACK DOWN ON PHOENIX COMPANIES?

    Organisations that support Labor’s proposed Director Identification Number, to help catch dodgy directors of fraudulent phoenix companies:

    • Australian Institute of Company Directors
    • Australian Small Business and Family Enterprise Ombudsman
    • Productivity Commission
    • Australian Chamber of Commerce and Industry
    • Master Builders Australia
    • Australian Council of Trade Unions
    • Australian Restructuring Insolvency and Turnaround Association
    • Phoenix Project, comprising experts from Melbourne University Law School and Monash University Business School

    Groups that have not yet indicated their support for a Director Identification Number:

    • The Turnbull Government

    THURSDAY, 25 MAY 2017

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    SMALL BUSINESSES IN TASMANIA LET DOWN BY TURNBULL’S SECOND-RATE NBN

    Labor Senators will take NBN Co and the Turnbull Government to task in Senate Estimates this week over unexplained and unfair service outages on the second-rate NBN Network across Australia, following reports that outages are putting local small businesses at a competitive disadvantage.

    “It’s unacceptable that hard working small business owners across Tasmania are facing unnecessary barriers to doing business and particularly with little or no explanation from the NBN Co or the Turnbull Government,” Shadow Minister for Small Business, Katy Gallagher, said.

    “I consistently hear from small business owners that their NBN connection is unreliable and sub-par and this latest story is further evidence that Malcolm Turnbull’s second-rate NBN is just another barrier to small businesses succeeding.

    “Labor accepts that from time to time there will be issues with the network, however, unexplained outages for days on end can be crippling for a business’ viability and we will be seeking answers on this issue on behalf of businesses and residents.

    “We have heard right across the country of the frustration being experienced by businesses and residents on Malcolm Turnbull’s second-rate NBN,” Shadow Minister for Communications, Michelle Rowland said.  

    On my recent Shadow Ministerial visit to Tasmania I heard first-hand about the difficulties small businesses and residents are facing with the current NBN. Small businesses like Green Acres Hydroponics in Mornington, which I visited, are frustrated by poor service and outages under this Government’s second-rate NBN.”

    “The contrast couldn’t be clearer, under Labor’s NBN Launceston business Launtel is announcing Australia’s first Gigabit NBN Connections, while the Liberal’s second rate NBN leaves Tasmanians with no connection at all,” Ross Hart said.

    We look forward to an explanation from NBN Co and the Minister as to why their second-rate NBN network is hampering the ability of small businesses to succeed in Tasmania.

    WEDNESDAY, 24 MAY 2017

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    $204 MILLION AND COUNTING: FEE FOR NO SERVICE SCANDAL GETS WORSE

    A compensation update from ASIC over the banks fee-for-no-service scandal has revealed that a further 100,000 customer accounts have been implicated in the scandal and the bill to repay ripped off customers now exceeds $200 million.

    The scandal, where customers were charged a fee to receive ongoing advice but didn't receive any has now affected over 300,000 customers from AMP, ANZ, NAB, CBA and Westpac.

    Since the original fee-for-no-service report was released (REP499) a further 100,000 accounts have been identified where fees were charged for services that customers never received.

    This update increases the estimated compensation bill by a further 15% to a staggering total of $204 million without including interest charges.

    The fact that a further 100,000 customers have been identified since the first report was released just over six months ago makes you wonder where it is all going to end.  

    How many more banking customers need to be overcharged fees by their bank before Malcolm Turnbull will act and call a royal commission?

    How many millions of dollars will have to be paid back to customers in compensation before Malcolm Turnbull will act and call a royal commission?

    Just in this one scandal alone 300,000 customers accounts have been ripped off and need to be repaid more than $200 million by their own bank.

    It’s time for Malcolm Turnbull to act in the interests of Australian banking customers and establish a royal commission.  

    Only a royal commission will provide the scrutiny that's required to get to the bottom of what has gone wrong in Australia's banking and financial services system and Labor will continue to call for one.

    SATURDAY, 20 MAY 2017

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    SPEECH TO THE FUTURE OF SUPERANNUATION CONFERENCE

    Let me begin by acknowledging the traditional custodians of the land upon which we meet, the Gadigal people of the Eora Nation, and extending my respects to elders past and present.

     

    I would like to also extend my thanks to Mike Taylor and his colleagues at Super Review for the invitation to speak to with you all today.

     

    As the Shadow Minister for Small Business and Financial Services I have been asked to speak today about the Federal Opposition’s approach to superannuation in particular.

     

    With the Federal Budget released just over a week ago, I also thought that I would make a few remarks about some of the policies it contained and our views on that.

     

    But before I do, I will just start with Labor’s vision for superannuation and why we think it is so important.   

     

    Labor’s vision for superannuation 

     

    Labor has a proud history on superannuation. 

     

    Labor established the age pension and we built universal, compulsory superannuation.

     

    Now, the Labor party itself can't take all the credit for creating the world class superannuation system we have in place now, we must acknowledge the  role played by the labor movement over many years in recognising the need for a mechanism which ensured improved income for workers in their retirement years, and also acknowledged the inequitable access to superannuation schemes, particularly for low income workers and women workers at the time, and their role in advocating for a system where working people have the same access to super savings as high income earners and public schemes that were in operation at the time. 

     

    It was off the back of negotiations between the industrial and political wings of the labour movement that in1992 that Labor in Government introduced Australia’s compulsory super system with the requirement that employers make superannuation contributions on behalf of their employees.  And aren't we all glad today that they did.

     

    Since that time, estimated superannuation assets have increased from around $148 billion in March 1992 to over $2 trillion today and the rate of employer contributions has also steadily increased from 3 percent to the current level of 9.5 percent. 

     

    Further increases to the contribution rate as we all know were scheduled to raise it to 12 percent by 2019, but these gradual increases fell victim to the infamous Hockey/Abbott budget of 2014, and the contribution rate is now not planned to reach 12 per cent until 2025-26. Labor strongly believes in protecting and growing superannuation. We also believe in increasing the superannuation guarantee increase to 12 per cent, when fiscal circumstances allow to provide millions of Australians with higher retirement incomes.

     

    We also believe in pursuing proactive and progressive policies that improve fairness and strengthen retirement incomes, for all working people and particularly for women and low and middle income earners. 

     

    In terms of fairness, Labor has led the debate about tightening superannuation tax concessions when we announced our policy back in April 2015.  At the time the Government came out attacking those policies, but by last year’s budget they, for the large part, accepted the general direction of Labor’s proposed reforms and legislated substantial changes to super tax concessions which Labor largely supported.

     

    Whilst our proposed reforms went further than what the Parliament legislated, we believe the changes are fair and fiscally responsible. Following on from these changes we would, however, like to see a period of stability where super does not become victim to a yearly assault by the budget razor gang and we have announced our position in terms of a five year report from an independent council of superannuation custodians to assist with that.

     

    In terms of other reforms before the parliament, legislating an objective for super remains on the table. Currently, Labor does believe in legislating an objective for superannuation, as a way to protect the integrity of the system, as recommended by the Murray Financial Systems Inquiry.  But we strongly believe that we need to get the objective right - we will not agree to a Bill which doesn't protect or strengthen super - or we believe we are better off without the legislation.

     

    Superannuation in the 2017-18 Federal budget

     

    If I turn to how the Federal budget released last week and see how that rests against our vision of a stronger super system for all Australians.

     

    First home super saver scheme

     

    An issue which we have heard quite a lot about over the past few months is whether the Government should allow first home buyers to access superannuation for a housing deposit.

     

    We all witnessed the various internal disputes from within the Cabinet play out in the papers on what seemed like a daily basis for a while there. Labor has been very clear from the outset that we do not support accessing super for housing. 

     

    Superannuation is for retirement incomes.

     

    The stated purpose of the Government’s first home super saver scheme is to encourage home ownership. 

     

    Now, Labor is all for supporting home ownership – housing affordability is a huge issue in this country – whether it’s those trying to break into the housing market or people struggling with high rents or others who are homeless – but we don’t believe this policy will not do anything to resolve these critical issues. 

     

    We believe there are several problems with the Government’s policy.

     

    Firstly, that it undermines superannuation. We believe, as I said, superannuation is to build up savings for retirement.  It is not a savings tool for housing or for that matter any other significant financial liability that a person may have during their lifetime.

     

    The introduction of this policy could be just the beginning of allowing other withdrawals from super – which we believe would be a disastrous approach which would severely undermine our superannuation system. 

     

    Secondly, it is inconsistent with the Government’s proposed objective for superannuation.

     

    The Superannuation (Objective) Bill 2016 is currently before the Senate and it proposes that: 

     

    “The primary objective of the superannuation system is to provide income in retirement to substitute or supplement the age pension.”

     

    The legislation also provides for subsidiary objectives of the superannuation system to be prescribed by regulations.  The Government has said that these regulations are to:

    ·         facilitate consumption smoothing over the course of an individual's life;

    ·         manage risks in retirement;

    ·         be invested in the interests of superannuation fund members;

    ·         alleviate fiscal pressures on government from the retirement income system; and 

    ·         be simple, efficient and provide safeguards.

     

    Quite rightly we would argue that they didn’t include saving for a home or using the superannuation system as an alternative to genuine policies to address housing affordability in this Bill. 

     

    Thirdly, the Government’s policy could have unintended impacts on other members of a superannuation fund. 

     

    The Government’s policy is that the amount of earnings that will be released to the first home buyer will be calculated using a deemed rate of return based on the 90 day Bank Bill rate plus three percentage points. It is not clear what would happen in the event that the prescribed earnings rate for housing deposits differs from the earnings of the super fund.  For example, if the housing deposit earnings rate is higher than what the super fund earns, will other members cross subsidise those who withdraw their super for housing?   Or will the super fund need to draw from the member’s compulsory super savings?  

     

    Fourth, the policy could be very difficult to implement. 

     

    The Government’s budget fact sheet says that the ATO will have primary responsibility for administering the scheme. It will be responsible for determining the eligibility of the person seeking a release and for calculating the release amounts.  Its decision is to be based on information provided by the applicant and superannuation funds.

    The ATO is also to be responsible for compliance – to ensure that people who withdraw their deposit actually go on to purchase their first home.

     

    Frankly, we are yet to see the details about how the ATO will go about these various responsibilities. 

     

    We know from a recent Senate Inquiry into the non-payment of the superannuation guarantee that there are significant gaps in data and reporting of superannuation to the ATO that have constrained its ability to identify when employers do not meet their superannuation guarantee obligations. 

     

    These data gaps may make it difficult for the ATO to implement the first home super saver policy effectively and with job losses and other pressures on the ATO, which are well known and documented, its difficult to see how they would prioritise or manage this scheme.

     

    Fifth, the first home super saver scheme may not make a significant impact on the ability of first home owners to purchase a home. 

     

    Plenty has been written by commentators on this since the Budget was handed down last week. The Government’s budget fact sheet gives an example of Michelle and Nick saving for their home deposit.  Under this example, they both earn $60,000 per year and salary sacrifice $10,000 into super.  Under the new policy, after three years, they will save $12,480 more than if they had the funds in a standard savings account. 

     

    But if the house prices in Australia grow even at their average historical rates since December 2011, then it could be that the median price of a residential dwelling in Australia would grow by over $100,000 in the three years that a first home buyer was saving. So under the scheme, a first home owner couple would receive an additional, just shy of$12,500 but meanwhile while house prices could have increased by over $100,000 over the same time.

     

    Clearly this policy isn’t going to be a game changer for first home buyers. 

     

    And, this brings me to my sixth point – that this policy does nothing to address housing affordability. 

     

    It will do nothing to put first home buyers back on to a level playing field with investors or take the heat out of the housing market.We’ve certainly been taking the lead on developing policies that will genuinely work to address housing affordability. 

     

    Labor’s housing affordability plan is to respond across the housing spectrum with tax reform, national leadership through COAG, new financing vehicles, homelessness support, better outcomes from national agreements and for the expenditure contained within them, and support for a  better supply of housing.

     

    Contributing the proceeds of downsizing to superannuation

     

    Another policy announced in last week’s budget is to allow people aged 65 or over to make a non-concessional concessional contribution to their superannuation of up to $300,000 from the proceeds of selling their home from 1 July 2018.     

     

    Labor has previously supported a policy objective of creating an incentive for older Australians to down-size their home.

     

    In government we had program called Housing Help for Seniors pilot program in 2013-14 which was to provide an income and assets test exemption for pensions over the age pension age who downsized their home.  The pilot program was to run for three years and be reviewed, however it also fell victim to  the Abbott Government back in2014 and was scrapped before it had a chance to even commence.

     

    The Government’s policy though, is to provide superannuation tax concessions for over 65s who downsize their home.

     

    The difficulty is that it is likely to only be taken up by higher wealth individuals.  This is because the proceeds of the sale of the home will still count towards the calculation of the pension asset test.  So anyone who is currently receiving the age pension, or is marginally above the cut off, would think twice about downsizing purely for the financial benefits.  

     

    Labor however is still consulting stakeholders and considering whether there are sufficient benefits to the housing market to justify granting further superannuation tax concessions to higher income earners. 

     

    Policies to address unpaid super missing from the 2017-18 budget

     

    In terms of what wasn’t in the budget, it was certainly disappointing to see that there was nothing to address the issue of unpaid superannuation.

     

    A report by Industry Super Australia released in late last year, and updated earlier this year, projected that 2.76 million Australians are being underpaid on their super, with an aggregate amount of $5.6 billion.  This equates to an average amount of just over $2,000 per person. If this situation is allowed to continue ISA projects that the cumulative impact on retirement savings would be $102 billion over the period 2013-14 to 2023-24. 

     

    This would not only put significant further demand on the age pension, but it would also deny employees the superannuation payments they are legally entitled to.

    Australians deserve to get the super that they have earned.  That is why Labor moved to establish a Senate Inquiry into the non-payment of the superannuation guarantee which has recently reported

     

    The Inquiry heard many cases where employers were failing to meet their superannuation guarantee obligations and made recommendations on how to strengthen compliance to ensure that all workers receive the superannuation that they are entitled to.

     

    In January this year, the Government announced that it had established a new multi-agency working group to investigate and develop practical recommendations to deal with superannuation guarantee non-compliance.  It also said that the working group had been going since December last year.But despite the working group being due to provide a final report to the Minister back in March, we are yet to see action from the Government in this area. 

     

    In fact, I would argue we are yet to see a broad vision for superannuation from this Government, perhaps beyond its pursuit of a clear ideological agenda against certain elements of the sector. 

     

    There are many long term policy challenges for Australian super and for retirement incomes more generally. These include ensuring that lower income workers, particularly women have access to a decent retirement. It includes ensuring that the changes we are seeing over time in the labour market do not leave people who do contract, casual and part-time work get left behind. It also includes positioning ourselves to meet the future challenge of supporting more Australians to live longer lives of value and dignity.  Superannuation, and its interactions with the age pension, health and aged care sector, will be a critical component of this future.

     

    As a $2 trillion sector, with growth coming forward and such a significant impact on people’s lives, governments and policy makers should be turning their minds now to meeting the challenges of the future.

     

    In terms of what Labor will do we will always support evidence based policies that seek to strengthen superannuation – particularly for low income workers and women – but we will not support policies which aim to weaken and target the labour movement’s role within the superannuation system. We know there is substantial work underway – with the Productivity Commission review and other super industry working groups along with changes flagged by the Government. Labor will be active participants in these debates and our focus will always be on what is in the interests of working people across Australia.

     

    This principle has guided us from the very beginning and it will continue to serve us well in 2017 and beyond.

     

    Major banks levy

     

    Finally If I could just make a few comments on the Government’s new bank levy which also featured prominently in last week’s budget and every day since.  I see from the program that this policy that may be discussed in the conference later in the day.

     

    Given the tight fiscal circumstances, Labor has said that we will not stand in the way of the new major banks levy. However, we do believe the Government needs to ensure that the burden of levy isn’t simply passed on to banking customers.  The Government promised very clearly on Budget day that this levy had been designed in a particular way that protected consumers and Labor believes they need to stick to their word.

     

    Like everyone it seems, including the banks themselves, we would like to see more details from the Government on exactly how intend to do this.

    We note the concerns that have been raised about the rushed process, lack of information, modelling or regulatory impact statement. We believe it is important and in the public interest, that all of this information is released ahead of the legislation coming before the parliament.

     

    I have to say with my other hat on as Manager of Opposition Business in the Senate, It is pretty common these days for rushed legislation to come before the Parliament without proper process resulting in the need for substantial amendments bills to come later. Last year’s superannuation bills were a classic example of this. Whilst we will not seek to delay the bank levy bills we do believe a Senate inquiry is warranted and we will begin scrutiny of this measure in next week’s estimates hearings.

     

    Conclusion

     

    I know in the time available I’ve only been able to address a few of the many issues facing the superannuation and the financial sector more broadly.

     

    There is a lot more we could discuss today but I can assure you that Labor’s response to the Government’s proposals in the budget will be guided by our values, by doing the right thing in the interests of working people and by what's in the long term interest of the country.

     

    Thank you very much for the opportunity to talk to you at the conference today.

     

    ENDS

     

     

     

    Let me begin by acknowledging the traditional custodians of the land upon which we meet, the Gadigal people of the Eora Nation, and extending my respects to elders past and present.

     

    I would like to also extend my thanks to Mike Taylor and his colleagues at Super Review for the invitation to speak to with you all today.

     

    As the Shadow Minister for Small Business and Financial Services I have been asked to speak today about the Federal Opposition’s approach to superannuation in particular.

     

    With the Federal Budget released just over a week ago, I also thought that I would make a few remarks about some of the policies it contained and our views on that.

     

    But before I do, I will just start with Labor’s vision for superannuation and why we think it is so important.   

     

    Labor’s vision for superannuation 

     

    Labor has a proud history on superannuation. 

     

    Labor established the age pension and we built universal, compulsory superannuation.

     

    Now, the Labor party itself can't take all the credit for creating the world class superannuation system we have in place now, we must acknowledge the  role played by the labor movement over many years in recognising the need for a mechanism which ensured improved income for workers in their retirement years, and also acknowledged the inequitable access to superannuation schemes, particularly for low income workers and women workers at the time, and their role in advocating for a system where working people have the same access to super savings as high income earners and public schemes that were in operation at the time. 

     

    It was off the back of negotiations between the industrial and political wings of the labour movement that in1992 that Labor in Government introduced Australia’s compulsory super system with the requirement that employers make superannuation contributions on behalf of their employees.  And aren't we all glad today that they did.

     

    Since that time, estimated superannuation assets have increased from around $148 billion in March 1992 to over $2 trillion today and the rate of employer contributions has also steadily increased from 3 percent to the current level of 9.5 percent. 

     

    Further increases to the contribution rate as we all know were scheduled to raise it to 12 percent by 2019, but these gradual increases fell victim to the infamous Hockey/Abbott budget of 2014, and the contribution rate is now not planned to reach 12 per cent until 2025-26. Labor strongly believes in protecting and growing superannuation. We also believe in increasing the superannuation guarantee increase to 12 per cent, when fiscal circumstances allow to provide millions of Australians with higher retirement incomes.

     

    We also believe in pursuing proactive and progressive policies that improve fairness and strengthen retirement incomes, for all working people and particularly for women and low and middle income earners. 

     

    In terms of fairness, Labor has led the debate about tightening superannuation tax concessions when we announced our policy back in April 2015.  At the time the Government came out attacking those policies, but by last year’s budget they, for the large part, accepted the general direction of Labor’s proposed reforms and legislated substantial changes to super tax concessions which Labor largely supported.

     

    Whilst our proposed reforms went further than what the Parliament legislated, we believe the changes are fair and fiscally responsible. Following on from these changes we would, however, like to see a period of stability where super does not become victim to a yearly assault by the budget razor gang and we have announced our position in terms of a five year report from an independent council of superannuation custodians to assist with that.

     

    In terms of other reforms before the parliament, legislating an objective for super remains on the table. Currently, Labor does believe in legislating an objective for superannuation, as a way to protect the integrity of the system, as recommended by the Murray Financial Systems Inquiry.  But we strongly believe that we need to get the objective right - we will not agree to a Bill which doesn't protect or strengthen super - or we believe we are better off without the legislation.

     

    Superannuation in the 2017-18 Federal budget

     

    If I turn to how the Federal budget released last week and see how that rests against our vision of a stronger super system for all Australians.

     

    First home super saver scheme

     

    An issue which we have heard quite a lot about over the past few months is whether the Government should allow first home buyers to access superannuation for a housing deposit.

     

    We all witnessed the various internal disputes from within the Cabinet play out in the papers on what seemed like a daily basis for a while there. Labor has been very clear from the outset that we do not support accessing super for housing. 

     

    Superannuation is for retirement incomes.

     

    The stated purpose of the Government’s first home super saver scheme is to encourage home ownership. 

     

    Now, Labor is all for supporting home ownership – housing affordability is a huge issue in this country – whether it’s those trying to break into the housing market or people struggling with high rents or others who are homeless – but we don’t believe this policy will not do anything to resolve these critical issues. 

     

    We believe there are several problems with the Government’s policy.

     

    Firstly, that it undermines superannuation. We believe, as I said, superannuation is to build up savings for retirement.  It is not a savings tool for housing or for that matter any other significant financial liability that a person may have during their lifetime.

     

    The introduction of this policy could be just the beginning of allowing other withdrawals from super – which we believe would be a disastrous approach which would severely undermine our superannuation system. 

     

    Secondly, it is inconsistent with the Government’s proposed objective for superannuation.

     

    The Superannuation (Objective) Bill 2016 is currently before the Senate and it proposes that: 

     

    “The primary objective of the superannuation system is to provide income in retirement to substitute or supplement the age pension.”

     

    The legislation also provides for subsidiary objectives of the superannuation system to be prescribed by regulations.  The Government has said that these regulations are to:

    ·         facilitate consumption smoothing over the course of an individual's life;

    ·         manage risks in retirement;

    ·         be invested in the interests of superannuation fund members;

    ·         alleviate fiscal pressures on government from the retirement income system; and 

    ·         be simple, efficient and provide safeguards.

     

    Quite rightly we would argue that they didn’t include saving for a home or using the superannuation system as an alternative to genuine policies to address housing affordability in this Bill. 

     

    Thirdly, the Government’s policy could have unintended impacts on other members of a superannuation fund. 

     

    The Government’s policy is that the amount of earnings that will be released to the first home buyer will be calculated using a deemed rate of return based on the 90 day Bank Bill rate plus three percentage points. It is not clear what would happen in the event that the prescribed earnings rate for housing deposits differs from the earnings of the super fund.  For example, if the housing deposit earnings rate is higher than what the super fund earns, will other members cross subsidise those who withdraw their super for housing?   Or will the super fund need to draw from the member’s compulsory super savings?  

     

    Fourth, the policy could be very difficult to implement. 

     

    The Government’s budget fact sheet says that the ATO will have primary responsibility for administering the scheme. It will be responsible for determining the eligibility of the person seeking a release and for calculating the release amounts.  Its decision is to be based on information provided by the applicant and superannuation funds.

    The ATO is also to be responsible for compliance – to ensure that people who withdraw their deposit actually go on to purchase their first home.

     

    Frankly, we are yet to see the details about how the ATO will go about these various responsibilities. 

     

    We know from a recent Senate Inquiry into the non-payment of the superannuation guarantee that there are significant gaps in data and reporting of superannuation to the ATO that have constrained its ability to identify when employers do not meet their superannuation guarantee obligations. 

     

    These data gaps may make it difficult for the ATO to implement the first home super saver policy effectively and with job losses and other pressures on the ATO, which are well known and documented, its difficult to see how they would prioritise or manage this scheme.

     

    Fifth, the first home super saver scheme may not make a significant impact on the ability of first home owners to purchase a home. 

     

    Plenty has been written by commentators on this since the Budget was handed down last week. The Government’s budget fact sheet gives an example of Michelle and Nick saving for their home deposit.  Under this example, they both earn $60,000 per year and salary sacrifice $10,000 into super.  Under the new policy, after three years, they will save $12,480 more than if they had the funds in a standard savings account. 

     

    But if the house prices in Australia grow even at their average historical rates since December 2011, then it could be that the median price of a residential dwelling in Australia would grow by over $100,000 in the three years that a first home buyer was saving. So under the scheme, a first home owner couple would receive an additional, just shy of$12,500 but meanwhile while house prices could have increased by over $100,000 over the same time.

     

    Clearly this policy isn’t going to be a game changer for first home buyers. 

     

    And, this brings me to my sixth point – that this policy does nothing to address housing affordability. 

     

    It will do nothing to put first home buyers back on to a level playing field with investors or take the heat out of the housing market.We’ve certainly been taking the lead on developing policies that will genuinely work to address housing affordability. 

     

    Labor’s housing affordability plan is to respond across the housing spectrum with tax reform, national leadership through COAG, new financing vehicles, homelessness support, better outcomes from national agreements and for the expenditure contained within them, and support for a  better supply of housing.

     

    Contributing the proceeds of downsizing to superannuation

     

    Another policy announced in last week’s budget is to allow people aged 65 or over to make a non-concessional concessional contribution to their superannuation of up to $300,000 from the proceeds of selling their home from 1 July 2018.     

     

    Labor has previously supported a policy objective of creating an incentive for older Australians to down-size their home.

     

    In government we had program called Housing Help for Seniors pilot program in 2013-14 which was to provide an income and assets test exemption for pensions over the age pension age who downsized their home.  The pilot program was to run for three years and be reviewed, however it also fell victim to  the Abbott Government back in2014 and was scrapped before it had a chance to even commence.

     

    The Government’s policy though, is to provide superannuation tax concessions for over 65s who downsize their home.

     

    The difficulty is that it is likely to only be taken up by higher wealth individuals.  This is because the proceeds of the sale of the home will still count towards the calculation of the pension asset test.  So anyone who is currently receiving the age pension, or is marginally above the cut off, would think twice about downsizing purely for the financial benefits.  

     

    Labor however is still consulting stakeholders and considering whether there are sufficient benefits to the housing market to justify granting further superannuation tax concessions to higher income earners. 

     

    Policies to address unpaid super missing from the 2017-18 budget

     

    In terms of what wasn’t in the budget, it was certainly disappointing to see that there was nothing to address the issue of unpaid superannuation.

     

    A report by Industry Super Australia released in late last year, and updated earlier this year, projected that 2.76 million Australians are being underpaid on their super, with an aggregate amount of $5.6 billion.  This equates to an average amount of just over $2,000 per person. If this situation is allowed to continue ISA projects that the cumulative impact on retirement savings would be $102 billion over the period 2013-14 to 2023-24. 

     

    This would not only put significant further demand on the age pension, but it would also deny employees the superannuation payments they are legally entitled to.

    Australians deserve to get the super that they have earned.  That is why Labor moved to establish a Senate Inquiry into the non-payment of the superannuation guarantee which has recently reported

     

    The Inquiry heard many cases where employers were failing to meet their superannuation guarantee obligations and made recommendations on how to strengthen compliance to ensure that all workers receive the superannuation that they are entitled to.

     

    In January this year, the Government announced that it had established a new multi-agency working group to investigate and develop practical recommendations to deal with superannuation guarantee non-compliance.  It also said that the working group had been going since December last year.But despite the working group being due to provide a final report to the Minister back in March, we are yet to see action from the Government in this area. 

     

    In fact, I would argue we are yet to see a broad vision for superannuation from this Government, perhaps beyond its pursuit of a clear ideological agenda against certain elements of the sector. 

     

    There are many long term policy challenges for Australian super and for retirement incomes more generally. These include ensuring that lower income workers, particularly women have access to a decent retirement. It includes ensuring that the changes we are seeing over time in the labour market do not leave people who do contract, casual and part-time work get left behind. It also includes positioning ourselves to meet the future challenge of supporting more Australians to live longer lives of value and dignity.  Superannuation, and its interactions with the age pension, health and aged care sector, will be a critical component of this future.

     

    As a $2 trillion sector, with growth coming forward and such a significant impact on people’s lives, governments and policy makers should be turning their minds now to meeting the challenges of the future.

     

    In terms of what Labor will do we will always support evidence based policies that seek to strengthen superannuation – particularly for low income workers and women – but we will not support policies which aim to weaken and target the labour movement’s role within the superannuation system. We know there is substantial work underway – with the Productivity Commission review and other super industry working groups along with changes flagged by the Government. Labor will be active participants in these debates and our focus will always be on what is in the interests of working people across Australia.

     

    This principle has guided us from the very beginning and it will continue to serve us well in 2017 and beyond.

     

    Major banks levy

     

    Finally If I could just make a few comments on the Government’s new bank levy which also featured prominently in last week’s budget and every day since.  I see from the program that this policy that may be discussed in the conference later in the day.

     

    Given the tight fiscal circumstances, Labor has said that we will not stand in the way of the new major banks levy. However, we do believe the Government needs to ensure that the burden of levy isn’t simply passed on to banking customers.  The Government promised very clearly on Budget day that this levy had been designed in a particular way that protected consumers and Labor believes they need to stick to their word.

     

    Like everyone it seems, including the banks themselves, we would like to see more details from the Government on exactly how intend to do this.

    We note the concerns that have been raised about the rushed process, lack of information, modelling or regulatory impact statement. We believe it is important and in the public interest, that all of this information is released ahead of the legislation coming before the parliament.

     

    I have to say with my other hat on as Manager of Opposition Business in the Senate, It is pretty common these days for rushed legislation to come before the Parliament without proper process resulting in the need for substantial amendments bills to come later. Last year’s superannuation bills were a classic example of this. Whilst we will not seek to delay the bank levy bills we do believe a Senate inquiry is warranted and we will begin scrutiny of this measure in next week’s estimates hearings.

     

    Conclusion

     

    I know in the time available I’ve only been able to address a few of the many issues facing the superannuation and the financial sector more broadly.

     

    There is a lot more we could discuss today but I can assure you that Labor’s response to the Government’s proposals in the budget will be guided by our values, by doing the right thing in the interests of working people and by what's in the long term interest of the country.

     

    Thank you very much for the opportunity to talk to you at the conference today.

     

    ENDS

     

     

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  • Featured post

    BANK LEVY NO ‘ON WATER’ MATTER

    Federal Labor is calling on the Treasurer to publicly release later today the Government’s draft legislation and explanatory memoranda for its major bank levy.

    Scott Morrison needs to understand that dealing with the financial system and major new tax measures requires transparency, not a cloak of secrecy that typified Mr Morrison’s time in the Immigration portfolio.

    Australian publicly-listed banks have continuous disclosure obligations as well as obligations to update Boards, staff, customers and shareholders of the potential impact of the bank levy design.

    Mr Morrison should have waited until the end of market trading yesterday and publicly released the exposure draft legislation on the major bank levy.

    The Treasurer is desperate to try and turn a measure that enjoys public support and support from other political parties into a stinker through appalling stakeholder management and secrecy.

    There’s already an investigation underway over how the main details of the Government’s $6 billion bank tax were leaked to the Australian Financial Review hours before the Budget was delivered.

    And this morning, Assistant Treasury Minister Michael ‘any good ideas along the way’ Sukkar couldn’t rule out more changes to the levy like incorporating foreign banks into the remit of the levy.

    Yesterday afternoon we formally requested that the Opposition be provided with a copy of the draft legislation.

    Federal Labor has shown good faith in providing in-principle support on the Government’s bank levy proposal from Budget night.

    Presumably the Government will require the Parliament to consider this quickly in the lead-up to the 1 July start-date for the bank levy, so the Government should take the Australian people, financial system, and supportive political parties into their confidence today.

    THURSDAY, 18 MAY 2017

    This is a joint media release with Labor's Shadow Treasurer Chris Bowen MP.

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  • Featured post

    ABOUT TIME FOR GOVERNMENT'S FEG ROUND TABLE

    The Government has announced it's going to look at doing something about companies avoiding their responsibilities to pay workers what they're owed rather than the taxpayer footing the bill.

    Good. It's about time.

    Labor has long been pointing out the harm that illegal phoenixing activity causes employees, businesses and the economy.

    Harmful phoenix activity – deliberate related-party asset transfers and insolvency – is a tactic used by some directors to explicitly avoid paying employees their entitlements, avoid paying taxes, and avoid paying creditors – particularly subcontractors and other small businesses.

    In 2015, the Productivity Commission reported 2,000 to 6,000 phoenix companies operating in Australia, costing up to $3.2 billion per year.

    In contrast to the inaction of the Turnbull Government, Labor has long been committed to protecting workers‘ wages from harmful phoenix activity. 

    Labor will happily participate in the Government's consultations but instead of talking the Government should be acting.

    WEDNESDAY, 17 MAY 2017 

    This is a joint release with Brendan O'Connor MP & Andrew Leigh MP.

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  • Featured post

    BUDGET FAILS TO ADDRESS ISSUES FACING AUSTRALIAN SMALL BUSINESSES

    This budget has failed to address significant issues facing small businesses including rising energy costs, delays in payment times and the rollout of the NBN.

    This is a budget which confirms that Malcolm Turnbull is a Prime Minister for the big end of town over those working hard to grow their business and create jobs.

    Small business owners have consistently raised rising energy costs, inadequate broadband infrastructure and late or delayed payments as key priorities for them that they want addressed by Government.

    While Labor welcomes the decision to extend the small business instant asset write off, we are disappointed that the Government has not acted to stimulate jobs growth or address the all-important issue of cash flow for businesses.

    Waiting for payment for supplies or services delivered is debilitating for small businesses right across Australia. Regrettably, this Budget has made absolutely no effort to address the ‘payment terms’ problem exposed in the Australian Small Business and Family Enterprise Ombudsman recent report into the practice.

    In order to compete in a global economy small businesses need access to high speed internet to grow their business and sell their products but this budget provided no solutions to Malcolm Turnbull’s own substandard National Broadband Network.

    This inaction simply makes it inevitable that Australian small businesses will continue to struggle with one of the slowest and most expensive internet service in the developed world.

    This budget also leaves small businesses to fend for themselves on increasing energy prices.

    The total vacuum of leadership from Malcolm Turnbull on energy policy is having a real impact on small businesses and means even higher energy prices and uncertainty for small business operators, inhibiting their ability to grow and employ.

    Wholesale power prices have doubled under this government and will continue to rise unless Malcolm Turnbull develops a real national energy policy.

    This Budget was an opportunity for Malcolm Turnbull to prioritise small business over his best friends at the big end of town but yet again he has failed.

     

    TUESDAY, 9 MAY 2017

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  • Featured post

    SLO-MO, HANDS OFF AUSTRALIANS’ SUPER

    This budget confirms what we knew to be true – that Liberals can’t be trusted to protect superannuation.

    The First Home Super Saver Scheme will do nothing to address housing affordability but will work to undermine Australia’s world class superannuation system and Labor will not support it.

    Rather than encouraging a raid on superannuation savings the Government should be supporting first home buyers by introducing policies that will actually work – reforming negative gearing and capital gains tax concessions.

    Malcolm Turnbull and Scott Morrison are also planning to water down consumer protections in super through this budget.

    The proposed new Australian Financial Complaints Authority will actually deliver lower protections for people who have a dispute with their superannuation fund than under the current arrangements. This is something we will be looking at very closely

    It’s disappointing that this budget didn’t do anything to stand up for the thousands of people who are not getting paid their super by their employers, which is costing around one in three Australians up to $1500 a year.

    With more than $2 trillion in superannuation assets under management its vital that we get the policy settings right. This budget doesn't do that. 

    The Liberals cannot be trusted on superannuation. Labor created super and we will always work to protect it.

    WEDNESDAY, 10 MAY 2017

    This is a joint media release with Labor's Shadow Treasurer Chris Bowen MP.

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  • Featured post

    BUDGET MEASURES NO SUBSTITUTE FOR A BANKING ROYAL COMMISSION

    Despite overwhelming evidence of the need for a Banking Royal Commission Malcolm Turnbull and Scott Morrison have continued to protect the banks from the proper scrutiny a Royal Commission would provide.

    If the Government thinks that by announcing a package of half measures in an attempt to address widespread community concern over banking conduct will reduce the calls for a Royal Commission, they are wrong.

    In terms of some of the specific measures the Government will need to explain how they will ensure the Major Banks Levy is not simply passed on to banking customers to pick up the tab.

    Given the tight fiscal circumstances, Labor will support the Major Banks Levy.

    In terms of the proposed new complaints authority for banking customers, simply rebadging existing complaints bodies will do nothing to stop the wrongdoing that has led to thousands of Australians being ripped off by their banks or financial advisers.

    Labor will consider all the banking measures in this budget but nothing will change our view that there is no substitute for a Banking Royal Commission. 

    Only a Royal Commission will get to the bottom of the cultural and systemic issues in the sector that have led to thousands of Australians being ripped off and having their lives ruined. 

    WEDNESDAY, 10 MAY 2017

    This is a joint media release with Labor's Shadow Treasurer Chris Bowen MP.

     

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