12 January 2016
Transcript - #2016002, 2016

In the role of: Minister for Small Business and Assistant Treasurer [21 September 2015 - 18 July 2016]

Interview with Chris Smith, 2GB, Breakfast Show

SUBJECTS: Small business; penalty rates; tax reform.

SMITH:

Kelly O'Dwyer, a very good morning to you.

MINISTER O'DWYER:

Good morning Chris.

SMITH:

And a happy new year I should say.

MINISTER O'DWYER:

Happy New Year to you as well and to all of your listeners.

SMITH:

Thank you very much for your time. For us contributors to super, we hate changes to superannuation - there have just been too many. But we also want choice right?

MINISTER O'DWYER:

We absolutely want choice. We want to make it easy for all Australians with their superannuation. We want all Australians to be able to maximise their retirement income and we don't want them to be forced to have two or more super funds, or forced into two or more sets of fees and insurance which is what happens now with those people who are forced into a particular fund, or multiple funds, as a result of their enterprise bargaining agreements. I had a recent letter from a young man who was working part time as a university tutor and also working part time in one of the big supermarkets. He was forced to have two superannuation funds because of the enterprise bargaining agreements. One was an industry fund, one was actually a retail fund which means he's paying two sets of fees and two sets of insurance premiums. We don't think that's very fair, we don't think it's sensible and it's certainly not in his best interests for his retirement income.

SMITH:

So is it true that two of the country's biggest employers, Coles and Woolies, have union backed enterprise agreements which link people to certain funds?

MINISTER O'DWYER:

I understand that, that's correct. A lot of big employers have enterprise bargaining agreements which means that they trade away the rights of their employees when it comes to choosing their own superannuation fund.

SMITH:

The key point here is, there is a large gap between the best and worst performing super funds, and it's not fair. It could be costing people tens of thousands of dollars in retirement funds. So why, therefore, have many of these enterprise agreements only led people to one or two super funds? Is there something suspicious going on in the background?

MINISTER O'DWYER:

It's one of those rights that is bargained away - an independent choice for an independent individual member of that particular fund. That worker doesn't have a right to choose the fund because the employer has chosen to trade it away potentially in an agreement with the union movement.

SMITH:

Let me ask it directly then, let me ask this: have there been shonky deals in the background going on between some of these suppliers of super funds and unions?

MINISTER O'DWYER:

I certainly think there are some questionable agreements that have gone on and I think we've seen from the Royal Commission very recently some pretty egregious examples of some of the things that have been going on in the superannuation industry. You only need to take the example of what happened with the Transport Workers Union when its Assistant State Secretary in Tasmania was paid by TWU Super, for two and a half days work as Superannuation Liaison Officer, he was paid $93,000.

SMITH:

There's your first example of a deal.

MINISTER O'DWYER:

A pretty good gig if you can get it.

SMITH:

Yep

MINISTER O'DWYER:

And under questioning in the Royal Commission it was acknowledged that perhaps that wasn't really in the best interests of those people who had contributed to that Superannuation Fund. I think what we want to see here is that all Australians can maximise their retirement incomes, to get rid of these vested interests, to make sure that those people who want to choose their funds, have the ability to do it. We are simply saying that people should have the ability to choose this fund if they want to, if they don't they can go into a default fund but if they want to choose it they should have that right.

SMITH:

Ok, you're trying to fight a union nexus here. You may be successful. But can I point out another point with all of this, 50% of the boards of industry super funds are appointed by unions. In the last financial year Industry Super Funds paid $88 million to their board members. They're on a good wicket and they don't want to move away.

MINISTER O'DWYER:

Well, I would just say this Chris, this actually doesn't just apply to the Industry Super Funds, the changes that we want to make in relation to best governance arrangements, the world's best governance arrangements, it applies to industry super funds, corporate funds, retail funds. We want to clean up the whole industry to ensure that we have the best and highest possible standards applying from the Government's perspective and that's not being some ideological agenda that the Government's been pursuing. Recommendations were made by Jeremy Cooper, who had an inquiry during the previous Labor Government, that said it needs to change, this isn't a cottage industry any more, we are talking about $2 trillion in peoples' retirement savings.

SMITH:

Ok, but they didn't change then, why do you think it will change now?

MINISTER O'DWYER:

Well, since then we have had the Murray Inquiry, which again said there needed to be significant changes to governance. I'm calling on the Labor Party, to put vested interests aside, to make sure that they put individual members' interests first, the retirement savings of all Australians interests first.

SMITH:

Is Bill Shorten listening?

MINISTER O'DWYER:

Well, that's a question you are going to have to put to Bill Shorten. I think we've seen with the Trade Union Royal Commission that they've been very reluctant to support the Government's very sensible reforms. They should support those reforms, they should support superannuation reforms as well. That will mean every individual Australian can determine their own future by choosing their own fund.

SMITH:

Here we are talking about loading up on our Super and not, you know, paying two sets of fees or three sets of fees etc. But while we are talking, the share market is plunging. I just wonder how much super is left after all of that. I guess I'm after a comment from you on the share market and the status of it at the moment. I tell you what, we have seen some losses $100 billion.

MINISTER O'DWYER:

Well look, this is not the first time that we have seen the share market fall and it won't be the last time probably and we will see the share market rise again I'm sure. The key responsibility though as a Government is to make sure we put in place sensible policies that can build the right foundations for our nation. And that is exactly what we're doing.

SMITH:

Ok. I appreciate your time. Good luck with all of this. There's an indication with some of the commentary today that you may be winning the fight. I wish you all the best.

MINISTER O'DWYER:

Thanks so much Chris.