On 3 June 2021, the AFR’s Michael Read posted an article, titled: Super reforms pass lower house after government dumps ‘veto power’. It reported that the Federal Government’s signature superannuation reform package, passed the lower house on Thursday evening (3.6.21), after a controversial power allowing the Treasurer to veto super fund investments was dumped due to objections by Nationals MP Barnaby Joyce and members of the cross-bench. See related TT article about the contents of the Bill.
See below for the article.
The bill passed the lower house on Thursday evening 66 votes to 62, with the government gaining the support of crossbench MPs Rebekha Sharkie and Bob Katter.
The vote capped off an intense two-week period of negotiations between the government and the crossbench, after The Australian Financial Review revealed that former Liberal Party MP Craig Kelly was unlikely to support the package, due to the inclusion of a directions power giving the Treasurer the ability to ban investments made by super funds that the government judged were against the national interest.
Mr Kelly’s opposition to the package, known as Your Future, Your Super, meant the Coalition needed to woo one of the lower house’s six other crossbenchers for the bill to head to the Senate.
The Australian Financial Review understands the government’s decision to drop the controversial directions power came after Mr Joyce revealed on Wednesday afternoon that he and other colleagues had “a real problem” with the provision.
Mr Joyce’s statement, which came as a surprise to the Labor Party, confirmed that the government did not have the numbers in the lower house to pass the bill if it retained the directions power.
A government source said that even without Mr Joyce and Craig Kelly forcing the backdown, it was likely the compromise would have had to be made anyway in the Senate.
Mr Joyce said the Labor Party would be pressured to use the veto power when it next formed government to cancel investments in coal, gas, fracking and the live cattle trade.
“We are very aware of the fact that when the time comes that we are not the government and someone else is, you can hardly argue against something the other side does when you brought in the laws for them to do it,” said Mr Joyce.
The legislation’s prospects improved after the backdown on the directions power, with independent MP Rebekha Sharkie declaring her “qualified support” for the bill on Thursday afternoon.
Senate support still to be wrangled
Other than the directions power, which has been dumped, the sweeping reforms also include annual performance tests for super funds and a requirement for funds to ensure all expenditure is motivated solely by the best financial interests of members.
The package, which is intended to reduce the incidence of multiple superannuation accounts, contains a “stapling” mechanism in which employees will automatically keep their existing super fund when switching jobs, rather than needing to opt in to keep their chosen fund.
The bill will now head to the Senate, where the government will need to earn the support of three crossbench senators for the package to become law in time for its July 1 start date.
The legislation’s passage through the Senate will be challenging, as support from the Senate crossbench has not been forthcoming.
Both independent Senator Rex Patrick and Centre Alliance’s Stirling Griff have said they would not support the bill as it stands. The Greens are understood to oppose the bill in its existing form.
Pauline Hanson and fellow One Nation Senator Malcolm Roberts have previously said they were in discussions with the government about the legislation.
“We’ll listen to what the minister [Jane Hume] has to say about any concerns we might have,” Senator Hanson said, “but she and the government should be in no doubt we’ll be acting in the best interests of every working Australian and their families – not in the interests of the government or their mates, the banks and of course the unions that are looking after their own interests through their super funds.”
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