SKY NEWS NEWSDAY WITH TOM CONNELL
MONDAY, 30 JANUARY 2023
SUBJECTS: Industry Super Australia’s proposal to increase the frequency of superannuation payments; role of impact investing in super; Treasurer’s treatise in The Monthly.
TOM CONNELL (HOST): Lobby group Industry Super Australia is calling for a crackdown to ramp up the frequency of payments into superannuation. It claims putting such a mandate in the May budget would end the underpayment of workers estimated it to be as high as $5 billion a year. Joining me live is Andrew Leigh, Assistant Minister for Treasury. Thanks for your time. Is the estimate right and where is it coming from? What are the types of people that are missing out on super?
ANDREW LEIGH, ASSISTANT MINISTER FOR CHARITIES, COMPETITION AND TREASURY: Well, Tom, it’s people right across the spectrum. We know that in recent estimates, around a quarter of Australians don't get their super paid on time, and for those who are affected, that can be up to $1,700. So we'll certainly give this Industry Super proposal the due attention it deserves in the interest of Australian workers. And frankly, if you don't end up paying your super, that's not much different from wage theft. So we need to make sure that Australian workers are taken care of. We're also appropriately concerned about making sure the regulatory burden on business isn't increased.
CONNELL: Right. So from my discussions with people, if you made it every month, there'd be a cost, for whatever reason, for business. But is it the only way to make sure it happens? Because if I'm thinking about it from a worker, it's basically impossible to figure out if your super is up to date because you can get different amounts paid at different days. It's not even the same day of the month or the quarter. So a monthly payment and you can see what's going on. Is that the only real way to mean that people can actually monitor their super?
LEIGH: Well, it shouldn't be the job of workers and unions to be chasing down whether or not super has been paid. It ought to be as automatic as possible. And that's why Jim Chalmers and Stephen Jones are working with the Australian Taxation Office to see whether we're able to increasingly make it easy for employers to do the right thing. I don't think unpaid super is largely a function of employers deliberately wanting to dud workers. People are just making mistakes because they're busy. So we need to be using the resources of government to make the system as efficient as possible.
CONNELL: If it has to be monthly and at that point it's the same amount, though it's a lot harder to make that mistake. Are you inclined towards that change? Would that make sense?
LEIGH: Well, ensuring that super is paid with wages is ultimately what you want to do if you can make the technology back end as straightforward as possible. If that's not a regulatory burden on business, then that's good for workers and it ensures that those returns get to compound.
CONNELL: Right, so that would be good. You're just checking on the burden. That's where we're at right now?
LEIGH: That's right. We're engaging and consulting with Industry Super. It's a constructive industry body who has the same interests as this government, making sure that workers get the benefits that they're entitled to.
CONNELL: Speaking of big super as well, Jim Chalmers various forays, including a piece he wrote over the weekend, talking about wanting to encourage, in particular, big super funds into various forms of investment. Is this something, ultimately, we're talking about so called social purpose or social investment, where the returns might be slightly lower, but people are going to be asked to be part of investment for the greater good?
LEIGH: Research I've seen suggests that firms which have environmental, social and governance guidelines tend to produce higher returns, not lower. These tend to be firms that are better managed and recognise the long-term challenges. Climate change isn't an issue that just affects the environment, it affects the economy as well. A firm that's got its head in the sand about climate change is less likely to succeed than one that's looking to the opportunities for a renewable economy.
CONNELL: When you're talking about that big investment into social housing, it's not something we tend to associate with big returns because you're trying to make it affordable. Is there going to be an element or will there be investment vehicles where people are going in eyes wide open? They'd be told about returns, but they might be told it's for the greater good of the country, you might get a slightly reduced return?
LEIGH: Tom, certainly there will be investment vehicles that are like that, but in general I think we need to be very concerned about not making this into a false dichotomy between returns to shareholders and benefits for the community. There's a range of areas in which we can have both, and the challenges we've got in home ownership in Australia is one which offers economic opportunities. The green revolution is at the forefront of that, and investment in things like offshore wind farms, solar farms and batteries are going to produce strong returns for shareholders. We know in the infrastructure sector that building the infrastructure Australia needs has also turned out to be a great investment for our super funds.
CONNELL: Does it mean, though, that there might need to be a reimagining or structuring or whatever it might be of super? That the holy grail is not returns whereby if one's 6.2 and one is 5.9, 6.2 is always better?
LEIGH: The reimagining that the Treasurer is focused on is bringing people together to work out what are the barriers to superannuation investing in the long-term interest of Australia. We're not talking about any sorts of mandates here, we're talking about a positive conversation with the superannuation industry, unlocking barriers, for example, to build-to-rent schemes which have been one way of tackling housing in other countries but have tended to be underdone in Australia. What's held the super firms back from doing build-to-rent in Australia? If we get on top of that, we get more housing opportunities.
CONNELL: There's been a lot of comments broadly on Jim Chalmers approach after his essay over the weekend. The Hawke Keating reforms are always spoken about as inspiration for Labor in a very much sort of free market based economy. Is it fair to say Labor is going in a different direction now?
LEIGH: We’re addressing the challenges of the times, I think that's why Jim began that terrific essay with the Heraclitus quote reminding us that we are not simply hitting the photocopier on the Hawke Keating reforms, but we're building the next generation of reforms. And the reference to Mariana Mazzucato's work around innovation reminds us that government has a powerful role engaging with business in order to spur the next generation of innovation.
CONNELL: So a different direction then?
LEIGH: A new direction appropriate to the times, appropriate to the challenges. The Hawke and Keating governments did great things, but we face new and fresh challenges now and to simply go back and try and repeat what they did would be to try and float the dollar a second time.
CONNELL: We’ve had three decades basically, of uninterrupted economic growth, beating every other developed country. Doesn't that show the basis there was pretty good through that time?
LEIGH: We've also had a decade in which real wages have gone backwards and productivity has stagnated, in which Australia's school test scores have declined and in which carbon emissions have been higher than every other advanced country on a per person basis. So we have some significant challenges we need to tackle and Jim's essay lays out some of the economic groundwork for building that progressive productivity agenda.
CONNELL: Andrew, I appreciate your time. Thank you.
LEIGH: Thanks so much, Tom.