Bills: Treasury Laws Amendment (Putting Members' Interests First) Bill 2019 - Second Reading

18 September 2019

Senator Patrick: I rise briefly to contribute to the debate on the Treasury Laws Amendment (Putting Members' Interests First) Bill 2019, indicating that Centre Alliance will be supporting the bill along with the government amendments. Our consideration of this bill was informed in a couple of ways. One of them was the Productivity Commission's report into superannuation and associated insurances. I know that in the last parliament we fixed a number of the problems that were in play, but I remember—and I've just called it up on my iPad—that about a third of accounts, about 10 million, were unintended multiple accounts. This does include both insurance and super. These eroded members' balances by $2.6 billion a year in unnecessary fees and insurances—$2.6 billion a year that insurance companies were knowingly creaming off the pay packets of young Australians, the people who could least afford it. Senator Chandler is right in that there has been significant lobbying in this building. I've been subject to a significant amount of representation. Indeed, probably half an hour ago super industry representatives walked into my office, seeking to adjust, perhaps, what will take place in this chamber today.

The second factor that we considered was the needs of workers. There are a number of workers who clearly do need to have insurance and should be placed into an opt-out category. But there are many, many workers where one would argue—in fact, the Productivity Commissioner did argue—that these products weren't suitable or, indeed, were underperforming. Workers weren't being asked to pay for these products. In fact, they were just paying for them; they were never asked about them. We have worked with the government to try to find a balance to make sure that we protect workers, and that is what the amendment that the government has circulated does. We consulted with a wide range of people in respect of that particular amendment and worked very positively with the government in relation to it.

What that amendment does is create a pragmatic exemption for those employed in dangerous occupations, emergency service workers or those who have been deemed to have a higher level of risk. The effect of the amendment is that young people who are likely to have a superannuation balance under $6,000 and who are employed as part of the police services and forces, fire and ambulance services, coast guard or rescue services will not have their insurance cover changed. This is a safety mechanism for those young people employed in high-risk occupations that is proposed on the basis that young people don't normally give sufficient consideration to their future, and particularly their mortality. They all feel 10 feet tall and bulletproof and don't ever really consider what may happen if they were no longer around or weren't able to make a living. The bill as amended will protect the small group of people who face a higher level of risk, where accidents could result in workplace death or total and permanent disability.

We believe we've managed to find a sweet spot that balances the need to make sure that people are not automatically opted in to insurance that they don't really wish to have but are paying for. It is unusual for an industry simply to be given a free ride—the ability to simply charge people for their product without having to consult them. At no stage does this bill take away the ability of a worker to seek out and gain insurance. It carves out a particular group of people who are able to remain in the insurance without being opted out.

Senator Farrell interjecting

Senator Patrick: Just responding to the heckling: look, if you think it's okay for people who don't need insurance to somehow subsidise people who may need insurance—we understand right now that the high-risk categories of workers will have their insurance arrangements catered for with an opt-out option. The ones that have to opt in are those who are less likely to need insurance. You shouldn't make people who don't need insurance and are not in high-risk roles subsidise people who do. The market will continue to operate, and, if indeed there is a problem in the way it operates, I'm sure the government will be open to correcting that—although I don't anticipate that. I commend the bill as amended by the government to the Senate.