PARLIAMENT HOUSE, CANBERRA
MONDAY, 1 JUNE 2020
SUBJECTS: Gambling, fraud and robo-released funds in early access super scheme; housing stimulus; Stuart Robert and robodebt; unpaid superannuation.
STEPHEN JONES, SHADOW ASSISTANT TREASURER: Good morning, everyone. Another day, another stuff up. First, it was the 60 billion dollar JobKeeper bungle, then the 721 million dollar robodebt debacle, and today we learn that one in ten dollars that has been provided through the government's early access to super scheme has been spent on online gambling. Labor was reluctant to agree to this scheme in the first place because we were concerned that it was going to be open to abuse, it was going to create a honey pot for fraudsters and scammers and we were very concerned about the implementation of the scheme. Well instead of learning from the problems with the robodebt scheme, they’ve just repeated them. They have set up a process with no manual oversight, a completely automated process. We are very comfortable with people in hardship accessing their superannuation to pay the bills and keep the lights on. But a scheme that is providing a stimulus to overseas gambling operators is not in the national interest and surely not in the interest of individual Australians. So we are calling on the Government to implement the scheme that Parliament actually legislated. We want to ensure that people have access to their superannuation for genuine hardship, but we don't want to see this money wasted. Everybody loses if this scheme doesn't work properly. The individuals lose, they don't have money for retirement savings. Taxpayers lose because it means we're paying more for pensions. Let's not forget when this, when superannuation was first established it was done for a reason. A lot of people are saying; this is their money why shouldn't they be able to spend it? We've got no problem with people accessing the scheme on the basis of hardship and I'm really pleased that there are small businesses that are able to keep the lights on because they're being able to access their super, people are able to pay their bills and ensure that they can get through this terrible crisis through early access to super. But this is not a honey pot and this is not like any other money. When we created Australia’s superannuation scheme, we did it because we realised in a very short period of time there was going to be more retirees than taxpayer's available to fund the pension. If this scheme is abused, if this scheme doesn't work properly, everybody is going to lose. Individuals lose from their retirement savings, the taxpayer loses because we’re going to be paying more tax than we need to and the superannuation funds lose because they're no longer going to be able to invest for the long-term in the interest of their fund members and in the interest of the economy as a whole. So the Government has got to be able to implement the scheme that was legislated. We discovered last week that nobody's actually overseeing the scheme. APRA said that it's not their job and clearly the tax office aren't doing it either. So we've got a robodebt repeat. We've got the Government that failed to learn the mistakes of robodebt and they've repeated those mistakes with the superannuation early release scheme. Happy to take any questions.
JOURNALIST: How do you regulate this? How do you define hardship [inaudible] and how do you then regulate how people spend the money?
JONES: We don’t have to reinvent the wheel. When we passed the law through Parliament there was a definition of hardship. The problem is the tax office isn’t implementing it and APRA is not regulating it and the Government's not telling them to. So we've got a problem here where the Government said one thing to Parliament and they've gone and implemented something else and everybody is losing. Individual taxpayers are losing, superannuants are losing. It means we are all going to pay more in the long term. I want to stress we want to ensure that people who are in genuine hardship have the ability to access their superannuation. That's what the scheme was set up for. But we don't want to see it open to abuse,but because of the Government's incompetence, that's exactly what's happening. More than one in ten dollars, that has been accessed from the early release scheme, is going to some overseas online gambling operator. How is that in the national interest? How is that stimulating Australia's economy? A scheme that was supposed to be set up to deal with hardship is going to end up creating hardship. That's crazy.
JOURNALIST: What do you say to Josh Frydenberg and Scott Morrison who, this morning, have just said; it's people's money, they can spend whatever they like on whatever they like?
JONES: We're going to go back to what the original purpose of superannuation was. We set it up because we knew that the ratio of retirees to taxpayers was declining and if we didn't act, if we didn't encourage people to save for their retirement, we'd all be worse off as a country down the track. We’d either have to increase taxes or decrease the pension. Because we wanted to encourage people to save for their retirement, we increased wages and diverted money towards superannuation and we made it a tax concession. It’s treated differently in terms of income, it’s tax concessional, in turn it’s treated differently in terms of investment earnings. It gets concessional earning, tax concession on earnings, of the fund and is treated differently when you take the money out of the fund as well. So the Government simply cannot argue that this is like any other money because at no point in superannuation’s history has it been treated as any other money. And here's the real danger, if we just treat this as rainy day money, if we treat this as a slush fund to be dipped into every time something goes wrong, then we are all going to end up paying more. We will end up paying more in tax to compensate for the pensions, people will have less money in retirement income and the superannuation funds won't be able to invest for the long term because they won't have money for the long term and they'll be operating like bank accounts instead of investing in infrastructure and long-term investments, which have enabled them to do such a great job over the long term, getting a return of on average eight to ten percent per annum. They’ll no longer be able to do that if the government's plan is allowed to be realised.
JOURNALIST: May I ask about this idea of helping people to renovate their houses. Is that a sensible stop gap if people can’t actually afford [inaudible]
JONES: Look, it's six weeks since Labor the first called on the Government to implement a plan to help the housing and construction sector. We knew six weeks ago that they are about to hit a cliff. In fact tradies are already being laid off. So we encourage the Government to get on with this to make it work. My colleague Jason Clare will standing up in Sydney very soon and he'll have more to say about this. We've got something else we need to consider as well, over fifty five percent of the people who have lost their jobs in the coronavirus crisis are women. We want the Government to have a plan for housing and tradies, but we also want the Government to be looking at what they can do to provide jobs for women who have lost their jobs during the crisis.
JOURNALIST: The Prime Minister today said he has full confidence in Stuart Robert and said; the Government has great regrets about any injury or pain that has been caused here. Is that good enough?
JONES: I saw more people in the stadium on the weekend than I see people who have confidence in Stuart Robert. Frankly, this guy has got a trail of destruction behind him. What the Prime Minister owes to Stuart Robert? I don't know, but this guy has overseen a monumental bungle. He should have made this decision over six months ago when the court told the Government that the scheme was illegal. Instead, he has persisted with the robodebt scheme. Persisted with the stress and anxiety on all those people who were told by the Government that they owed hundreds of dollars. He should have fessed up and paid the money back way back then. Why the Prime Minister hasn't sacked Stuart Robert, I do not know. The Prime Minister should just move and sack him.
JOURNALIST: Just going back to super, about today the Treasurer said about 15 billion has been pulled out, Treasury estimates 27 billion, eventually we will see the second round of 10 thousand dollar withdrawals in the new financial year. What should the Government be doing to tighten this scheme up? What you see as not fit for purpose rules.
JONES: We want to ensure that everyone who is in hardship has access to their superannuation. That's what Parliament legislated. The problem is the Tax Office, APRA and the Government haven't implemented what the Parliament legislated. So what they need to do is go back to their processes, instead of implementing robotdebt mark two, they need to ensure that the process that the Tax Office uses ensures that the money is going to people in hardship and it isn't being used to fund overseas gambling operators and seeing money squandered. Very simple, the Tax Office has got all the data.
JOURNALIST: Do you want them to be able prove [inaudible] that they’re in genuine hardship?
JONES: If the Government wants the early access scheme to be a free-for-all, they should come back to Parliament and say that's exactly what they want to do. They should come back to Parliament and legislate a change. I'm pretty sure they won't get support. I'm pretty sure they won't get support for that. They should implement what was legislated. What was legislated, had a genuine hardship test that the Tax Office hasn’t implemented. APRA isn't regulating that and we can only assume that the reason they're doing that is the Government has told them not to.
JOURNALIST: Are you hearing from people who are trying to access their super from this scheme and are finding that their employers haven’t been paying super into their accounts?
JONES: We know that there are billions of dollars every year that aren't being paid in superannuation. And we know that the first time a lot of employees discover this is when they've attempted to access the early access scheme. We know there are lots of problems with this and we'd like to see the Government focusing on those as well.
JOURNALIST: Should the Government just stop the scheme and give it an early end.
JONES: Labor reluctantly agreed to the early access scheme for people who are in genuine hardship and where hardship exists early access to superannuation has always existed and it should continue to exist. But again, we do not want to destroy the system, we don't want to kill the goose that lays the golden egg. If we did this every year when a genuine crisis arises, we would not have the billions of dollars available to provide genuine support for Australians who are in genuine hardship. So I asked the Government to rethink, this is not rainy day money. This is not a slush fund to compensate for a Government that is unwilling to do the job that government should do in the middle of a crisis. This is money that was set aside to ensure that, as a country over the long term, we are not paying more in taxes, that we can afford to pay our pensions and Australians have a dignified retirement.
Thanks very much.