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representatives vote 2022-10-27#3
Edited by
mackay staff
on
2022-11-03 14:33:41
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Title
Bills — Treasury Laws Amendment (2022 Measures No. 3) Bill 2022, Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2022, Income Tax Amendment (Labour Mobility Program) Bill 2022; Consideration in Detail- Treasury Laws Amendment (2022 Measures No. 3) Bill 2022 - Consideration in Detail - Faith based super funds
Description
<p class="speaker">Stuart Robert</p><p>by leave—I move amendments (1) and (3) to Treasury Laws Amendment (2022 Measures No. 3) Bill 2022 presented in my name:</p>-
- The majority voted in favour of *disagreeing* with [amendments](https://www.openaustralia.org.au/debates/?id=2022-10-27.26.1), which means they failed.
- ### What do these amendments do?
- Fadden MP [Stuart Robert](https://theyvoteforyou.org.au/people/representatives/fadden/stuart_robert) (Liberal), who introduced the amendments, [explained that](https://www.openaustralia.org.au/debate/?id=2022-10-27.26.2):
- > *Amendments (1) and (3) effectively excise schedule 5 from the Treasury Laws Amendment (2022 Measures No. 3) Bill 2022. That is the measure that allows faith based super funds to not have to meet the requirements of the benchmark that was put in place under the Your Future, Your Super legislative changes. We do that quite soberly. If we look through at the benchmark requirements that this parliament passed, it requires super funds to meet basic benchmarks of performance. If they do not, then of course they are named and they will need to inform their members that their fund is not performing to those benchmarks. If they fail a second time they are no longer able to receive contributions that are mandatory and therefore they can't be a MySuper regulated fund. This has already occurred once. Thirteen funds failed, and they all quite rightly sought to merge with other funds. Quite recently five other funds have also been named for underperformance.*
- >
- > *It's not as if these benchmarks are onerous.*
- Whitlam MP [Stephen Jones](https://theyvoteforyou.org.au/people/representatives/whitlam/stephen_jones) (Labor) disagreed, [saying that](https://www.openaustralia.org.au/debate/?id=2022-10-27.27.8):
- > *Let me explain what the government is proposing to do and why the member for Fadden has just misled the House. There are fewer than five faith based funds in the country, and they are set up with a specific investment mandate. They say, 'If you join our fund, you can be assured that your funds are going to be invested in accordance with your religious and your faith based precepts.' Just putting the word 'Catholic' in your name does not make you a faith-based investment fund. Just putting the word 'Presbyterian' in your name does not make you a faith based fund. Putting the word 'Anglican' in your name does not make you a faith based fund. What makes you a faith-based investment fund is if your investment mandate specifically says, 'We are going to invest members' money in accordance with our faith based principles.'*
- ### Amendment text
- > *(1) Clause 2, page 2 (table item 5), omit the table item.*
- >
- > *(3) Schedule 5, page 14 (line 1) to page 19 (line 14), omit the Schedule.*
<p class="italic">(1) Clause 2, page 2 (table item 5), omit the table item.</p><p class="italic">(3) Schedule 5, page 14 (line 1) to page 19 (line 14), omit the Schedule.</p><p>There are only two groups of amendments the opposition will move, this being the first set. Amendments (1) and (3) effectively excise schedule 5 from the Treasury Laws Amendment (2022 Measures No. 3) Bill 2022. That is the measure that allows faith based super funds to not have to meet the requirements of the benchmark that was put in place under the Your Future, Your Super legislative changes. We do that quite soberly. If we look through at the benchmark requirements that this parliament passed, it requires super funds to meet basic benchmarks of performance. If they do not, then of course they are named and they will need to inform their members that their fund is not performing to those benchmarks. If they fail a second time they are no longer able to receive contributions that are mandatory and therefore they can't be a MySuper regulated fund. This has already occurred once. Thirteen funds failed, and they all quite rightly sought to merge with other funds. Quite recently five other funds have also been named for underperformance.</p><p>It's not as if these benchmarks are onerous. In terms of Australian listed equities, the average large-scale fund will have about 15 per cent listed equities. The benchmark simply requires the super fund to meet, ostensibly, the Standard and Poor's 200 index. So if you took your money and put it into an index fund, which is a fund that just invests across the top 200 companies in Australia at the same percentages to which they are represented in the stock market and do nothing else—no active trading, nothing—that's the benchmark. It is the laziest benchmark of all if in terms of bond trading you can't meet a Bloomberg index. So they go. It's designed to ensure that your super funds aren't being ill managed or fees aren't high. The 13 funds that were named—shamed, if you like—and folded, some of them were appalling. The MUA fund was just outrageous in terms of what was going on. Quite rightly, members' money, Australians' money, is being protected by ensuring these benchmarks make these funds accountable, because super is the second-largest asset outside of Australians' homes. It's the asset that no-one pays attention to, yet it's the asset where rivers of gold flow to it under superannuation guarantee payments. Therefore setting a benchmark is appropriate. The government made an election commitment saying, 'If you're a faith-based super fund, you don't have to meet those benchmarks, because you're investing along your faith principles.' The bill says, 'If you don't meet the benchmark, we'll create another benchmark for you.'</p><p>So I sat down with APRA and said, 'If you were a faith based organisation, what percentage of the Australian stock market would you not invest in, because as a faith community you may not want to invest in munitions or alcohol or cigarettes?' The answer is two per cent. So there's two per cent of the market you ostensibly can't invest in, but suddenly that two per cent means you don't have to meet the benchmark. What the government is putting forward is saying to faith based communities: 'If you're in a faith based fund, you don't have to have as great a retirement as any other Australian, because we're going to give a leave pass to that faith based fund.' They're not going to have to meet a benchmark. 'We'll create something else for them.' APRA will create some other benchmark for them, based on what their investment strategy is.</p><p>What we're saying is that every Australian should be treated equally. Every single Australian should have the same right to a dignified retirement, and every super fund should be held to account in the same way. That is why we are moving to strike out schedule 5 to this bill—so that every Australian is treated the same way, every Australian Super fund is treated the same way, everyone can expect a dignified retirement in the same way and no-one gets a leave pass. Whether you're a person of faith, whether you believe in ESG or any other principle, the bottom line is that retirement is important, a dignified retirement is important and everyone should have the same ability to receive that.</p> <p class="speaker">Stephen Jones</p><p>Let me just explain to members of the House the proposition that is being put by the government, because it's important. It bears no resemblance to the characterisation that was just given to the House by the member for Fadden. What is most disappointing about what he said is that he knows full well that what he just told the House was not true. He knows full well that he just misled the House. So let me explain quite clearly what the government proposition—</p> <p class="speaker">Maria Vamvakinou</p><p>The member for Fadden on a point of order?</p> <p class="speaker">Stuart Robert</p><p>The minister doesn't get to make an unsubstantiated allegation of that seriousness.</p> <p class="speaker">Maria Vamvakinou</p><p>The member will state the point of order.</p> <p class="speaker">Stuart Robert</p><p>There are other forms of the House for the minister to do that.</p> <p class="speaker">Maria Vamvakinou</p><p>The minister has the call.</p> <p class="speaker">Stephen Jones</p><p>Let me explain what the government is proposing to do and why the member for Fadden has just misled the House. There are fewer than five faith based funds in the country, and they are set up with a specific investment mandate. They say, 'If you join our fund, you can be assured that your funds are going to be invested in accordance with your religious and your faith based precepts.' Just putting the word 'Catholic' in your name does not make you a faith-based investment fund. Just putting the word 'Presbyterian' in your name does not make you a faith based fund. Putting the word 'Anglican' in your name does not make you a faith based fund. What makes you a faith-based investment fund is if your investment mandate specifically says, 'We are going to invest members' money in accordance with our faith based principles.'</p><p>Let me give you an example. If you are a member of a faith that prohibits participation in gambling or if you are a member of a faith that prohibits participation in usury—lending for an interest rate—then it is almost impossible for you to invest your funds in accordance with the principles that were just outlined by the member for Fadden, because if you invest your fund either directly or in an exchange traded fund, which is leveraged off the ASX 200, you're investing in Woolworths, NAB, the Commonwealth Bank, Coles and AHL holdings. You're invested in all of these—</p> <p class="speaker">Stuart Robert</p><p>What's wrong with Woolies? What have you got against Woolies?</p> <p class="speaker">Stephen Jones</p><p>I love Woolies. The member for Fadden asked me what I've got against Woolies. Absolutely nothing. But I'm not—</p><p>Well, if he would be quiet for just a moment, he might understand why he has just misled the House. And thickness makes a lot of noise, in the case of the member for Fadden.</p><p>Let me explain it to you. If someone is a member of one of these religions that prohibits them participating in gambling, why should we be saying to them: 'We are going to deregister your fund unless it performs in accordance with an index which assumes you invest in a gambling business, or you invest in a banking business or invest in one of these businesses which is specifically operating against the religious precepts of that community'? Now, I don't happen to hold those views; I don't happen to find those activities offensive. But I do understand that there are many members who represent communities where they do hold those principles, and they want to ensure that their life savings, their superannuation savings, are invested in accordance with those principles. I've mentioned the example of gambling. I've mentioned the example of banking. There are others.</p><p>What the member for Fadden has done is specifically mislead the House. Let me explain to the House—and the member for Fadden, who clearly doesn't understand it—how the new test will work. A faith based fund will be measured in accordance with every other fund in the country, and they can't just stick their hand up halfway through the process and say, 'By the way, we're a faith based fund.' They have to have declared, in their investment mandate, way before the measurement period, that that is indeed what they are and they are investing their money in accordance with a religious principle. If they are run through the annual performance test and they fail it, APRA will then run a second test, which will ask a very simple question: but for this fund investing its money in accordance with those religious principles— <i>(Time expired)</i></p> <p class="speaker">Stuart Robert</p><p>I'm always amused by the Assistant Treasurer's marvellous turns of phrase. The House is very clear what the bill is seeking to do. The minister of course can't explain what secondary test APRA will do. If you fail the primary test, APRA will then devise some secondary test in line with whatever your investment mandate is. But let's understand exactly what products and sets faith based super may not want to invest in. Apparently, the Assistant Treasurer thinks that they won't want to invest in Woolies. I don't know what the government has got against Woolies—apart from a budget that passed two nights ago that does nothing for the cost of living that hurt their share price; apart from that, I don't know what you've got against Woolies.</p><p>But, in APRA's view, there's about two per cent of stocks on the ASX that wouldn't be invested in from faith based supers. Considering a super fund has about 15 per cent in domestic equities, that means: 85 per cent elsewhere. So, in terms of the total fund balance, there's about 0.5 per cent of products that that total fund couldn't invest in, and for 0.5, we should junk the benchmark designed to protect Australians—because of a measly 0.5. It doesn't stack up; it doesn't hold water. Every Australian should be assured that their fund is doing the very best they can. The benchmarks are the mere bottom of what you could possibly invest in. They set the lowest possible balance necessary. Every fund should be able to deal with it, and, if only 0.5 per cent of your total investment mandate is ineligible because of your faith base, there is absolutely no reason why you shouldn't be meeting the benchmark.</p> <p class="speaker">Stephen Jones</p><p>Let me explain how the benchmark, the secondary test, will work. If you fail the first benchmark, APRA will then conduct a very narrow, specific second test, which will ask the question: but for you investing your funds in accordance with a faith based principle, would you have failed the test? And, if the answer to that is, yes, you would've failed anyway, you're out—that is, if the faith based investment principles made no material difference to the performance outcomes of that fund, then you're still out; you have still imposed upon your fund all the rigours of the failure of that test that would apply to any other fund in the country.</p><p>If, on the other hand, the independent regulator determines, after assessing that fund, that, but for the investment in accordance with their faith based principles, the fund would have passed the test, you will not be closed down. Who are we, as a parliament, to say to those members who say, 'I want to invest in accordance with my Islamic faith,' or 'I want to invest in accordance with my Christian faith'—let's name them here, because, quite frankly, these are the two great faith groups; it will be the Islamic faith or it will be the Christian faith. Who are we to say, as a parliament, to those thousands of Australians: 'You are not entitled to have a fund available to you which will allow you to invest in accordance with your religious principles'? Understand: that is exactly what the member for Fadden is arguing.</p><p>Let's assume for a moment that the member for Fadden is right, and the test will have almost no bearing on those funds. Then you have to ask yourself: what is his problem in allowing members of a faith based community to invest their superannuation in a faith based fund? If his argument is correct, this will have no bearing on the ultimate performance outcome. What is your objection? It is nothing but politics. The thing that bells the cat on this is that the same member, when he was sitting on this side of the House, apparently thought it was more important to give a school the right to dismiss a child on the basis of their sex or gender or sexual preference, or a teacher or a principal on the basis of their sex or gender or sexual preference—they thought it was more important to enable a school to dismiss somebody on this basis—than to enable the teachers of that school or the members of that faith based community to invest their money in accordance with their faith. If we are truly to be a parliament which respects the principle of freedom of religion, surely it's got to extend beyond the schoolyard, surely it's got to extend into grown-up life as well. I put it to you that the argument by the member for Fadden is based on pure politics and is grounded in hypocrisy. All the members of this House should enable all the provisions of this bill to pass through unamended.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>-
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