3 years ago
Fraud associated with Early Release Superannuation Scheme
ANTHONY ALBANESE MP
ANTHONY ALBANESE, LEADER OF THE AUSTRALIAN LABOR PARTY: Thanks for joining me. I am here with Stephen Jones, Labor’s spokesperson on superannuation. And this follows the news that Michael Sukkar has suspended the access to early superannuation withdrawals today as a result of fraud that has been found as part of the roll-out of the government system. When the Government unwisely chose to allow early access to superannuation withdrawal, which will of course damage people's entitlements when it comes to their retirement, which will reduce the liquidity of superannuation funds, and distort the market investments that are made in the future by superannuation, Labor warned about the potential for fraud. Not only Labor, but the superannuation industry wrote to the Minister on 1 May. On the very day that this fraud was uncovered, the Minister wrote back and said, ‘nothing to see here’. It's very clear that this suspension is not only necessary, it could have been foreseen and indeed, was foreseen by the superannuation industry and by Labor when we raised these issues in the national Parliament. This is a Government whereby we will hold them to account on the rollout of the measures that have been implemented. And that is absolutely critical. Because this is money that belongs of course to individual superannuants that's fraudulently withdrawn and now the subject of an AFP investigation.
If I can just make some comments about the Reserve Bank and their monetary statement today before I ask Stephen Jones to make comments, this puts to bed the idea that Scott Morrison has said there will be a snapback, that we'll wake up one morning and the economy and everything will be back to the way that it was. What the Reserve Bank estimates is that unemployment will hit 10 per cent. That real household disposable income will fall by 8 per cent in June, but it will also fall by 8 per cent in December. What we're looking at here is long-term impact on living standards of Australians as a result of the coronavirus crisis. And the Government needs to acknowledge the idea of snapback is simply not going to work. They'll need to put in place measures that keep people in employment, that promote employment, and that promote economic activity if we're not going to have a prolonged down turn. The Government up to this point hasn't acknowledged that. The Reserve Bank statement today is very clear. It also predicts a decline for some period of time in terms of hours worked in hospitality. And predicts, indeed, that we can expect unemployment to stay quite high, up until into 2021. So, this requires a Government response. Not just saying it will all be okay but will require ongoing government action in the economy. I will ask Stephen to make some comments.
STEPHEN JONES, SHADOW ASSISTANT TREASURER: Thanks, Anthony. We've seen an extraordinary turnaround in 24 hours. Yesterday, government officials were grilled by the Senate select committee. And they said yes, there's 150 cases that have being investigated by the AFP but there was no need for any changes to the scheme. Less than 24 hours later, the scheme has been suspended. So, the question is this; what has the Minister learnt in the last 24 hours? Is it more than 150 cases? We suspect it is. What has the Minister learned which has made the Government change its mind to suspend its flagship scheme in a 24-hour period? We have been warning for some it time. We warned when the legislation was before the Parliament that this had the potential to create a honey pot for criminals and fraudsters. Sadly, that has turned out to be true. We need to have some confidence that the Government is going to learn from its mistakes, listen to industry, and put in place the changes that ensure that ordinary workers' superannuation isn't being ripped off them. When the AFP started their investigation, in fact, on the very same day that the AFP commenced its investigation into this fraud, the Minister wrote to the industry saying there were no problems with their processes. Clearly, the Minister is asleep at the wheel and needs to explain exactly what she is doing to ensure that ordinary workers' superannuation is safe.
ALBANESE: Okay, happy to take some questions.
JOURNALIST: You mentioned the need for a government response and ongoing action in the economy, are you saying there needs to be a fourth stimulus package? And will Labor be fighting the Government promising increased social spending into the next election?
ALBANESE: Well, we'll announce our policies before the next election. But I'll be giving a speech here in Canberra next week which will outline some of Labor's thinking, further thinking, when it comes to the post-corona recovery that will be required. What we say is that the Government's idea that there'll be a snap-back, their words, not mine, is quite clearly not going to be the case. And Australians need to be prepared that they won't wake up one morning and they'll be back to where it was.
JOURNALIST: Might the Government have to look at some form of extension of JobKeeper?
ALBANESE: Well, the Government might need to look at a range of measures and options. We will continue to put forward those ideas in Parliament next week. Quite clearly, in terms of sustaining employment, one of the areas that we have pointed to, for example, is housing construction. Housing construction is in decline in terms of the forward projections which are there. And indeed, due to decline substantially in three months' time, the pipeline of projects simply isn't there. So, Government needs to look at those issues. Unless they do, what we'll see is a whole lot of tradies out of work. And we'll see far less economic activity in the economy, in our cities and in our regions. And that will add, of course, a decline in housing supply. It will add pressure to housing affordability.
JOURNALIST: (Inaudible).
ALBANESE: Well, we were concerned about the early withdrawal scheme from the very beginning, because it certainly isn't in the interests of individual workers to take money out of their superannuation accounts, when it's at the bottom of the market. We argued very clearly that this would result in substantially reduced retirement incomes for working people. That is not good for them. And it's not good for the economy. It's not good for the superannuation sector as well. I might ask Stephen to make some comments on that as well.
JONES: The essential problem of the scam that the Government has set up, quite apart from the policy problems that Anthony has described, is the way they set up the processes. It's a highly automated process. There's very little human intervention. Therefore, it suffers the same sort of problems that Robodebt did. Where are the human beings overseeing the claims that are being made? Well, simply, that's not happening. And in fact, if you look at what went on with the 150 cases of fraud that we know about, it wasn't the tax office that detected the fraud. It wasn't even AUSTRAC and it wasn't the AFP. It was a worker inside a superannuation fund that looked at this and said this doesn't look right. And they alerted AUSTRAC and AUSTRAC did the right thing and commenced the investigation and sent a brief across to the AFP. Now, I might say, this is in the context of a whole heap of Coalition backbenchers criticising the superannuation industry for taking too long to process their claims. There's a good reason they're doing that. These checks need to be made. We've got a system which is inherently problematic. The process that the Government has set up is inherently problematic. They were warned. They ignored it. And now workers are paying the price.
JOURNALIST: Mr Albanese, why did you ask the Shadow Cabinet to consider junking Labor's social spending agenda?
ALBANESE: I didn't. I didn't. Read the document, it's been leaked. I didn't. Read the document. I didn't. Thanks.
ENDS
If I can just make some comments about the Reserve Bank and their monetary statement today before I ask Stephen Jones to make comments, this puts to bed the idea that Scott Morrison has said there will be a snapback, that we'll wake up one morning and the economy and everything will be back to the way that it was. What the Reserve Bank estimates is that unemployment will hit 10 per cent. That real household disposable income will fall by 8 per cent in June, but it will also fall by 8 per cent in December. What we're looking at here is long-term impact on living standards of Australians as a result of the coronavirus crisis. And the Government needs to acknowledge the idea of snapback is simply not going to work. They'll need to put in place measures that keep people in employment, that promote employment, and that promote economic activity if we're not going to have a prolonged down turn. The Government up to this point hasn't acknowledged that. The Reserve Bank statement today is very clear. It also predicts a decline for some period of time in terms of hours worked in hospitality. And predicts, indeed, that we can expect unemployment to stay quite high, up until into 2021. So, this requires a Government response. Not just saying it will all be okay but will require ongoing government action in the economy. I will ask Stephen to make some comments.
STEPHEN JONES, SHADOW ASSISTANT TREASURER: Thanks, Anthony. We've seen an extraordinary turnaround in 24 hours. Yesterday, government officials were grilled by the Senate select committee. And they said yes, there's 150 cases that have being investigated by the AFP but there was no need for any changes to the scheme. Less than 24 hours later, the scheme has been suspended. So, the question is this; what has the Minister learnt in the last 24 hours? Is it more than 150 cases? We suspect it is. What has the Minister learned which has made the Government change its mind to suspend its flagship scheme in a 24-hour period? We have been warning for some it time. We warned when the legislation was before the Parliament that this had the potential to create a honey pot for criminals and fraudsters. Sadly, that has turned out to be true. We need to have some confidence that the Government is going to learn from its mistakes, listen to industry, and put in place the changes that ensure that ordinary workers' superannuation isn't being ripped off them. When the AFP started their investigation, in fact, on the very same day that the AFP commenced its investigation into this fraud, the Minister wrote to the industry saying there were no problems with their processes. Clearly, the Minister is asleep at the wheel and needs to explain exactly what she is doing to ensure that ordinary workers' superannuation is safe.
ALBANESE: Okay, happy to take some questions.
JOURNALIST: You mentioned the need for a government response and ongoing action in the economy, are you saying there needs to be a fourth stimulus package? And will Labor be fighting the Government promising increased social spending into the next election?
ALBANESE: Well, we'll announce our policies before the next election. But I'll be giving a speech here in Canberra next week which will outline some of Labor's thinking, further thinking, when it comes to the post-corona recovery that will be required. What we say is that the Government's idea that there'll be a snap-back, their words, not mine, is quite clearly not going to be the case. And Australians need to be prepared that they won't wake up one morning and they'll be back to where it was.
JOURNALIST: Might the Government have to look at some form of extension of JobKeeper?
ALBANESE: Well, the Government might need to look at a range of measures and options. We will continue to put forward those ideas in Parliament next week. Quite clearly, in terms of sustaining employment, one of the areas that we have pointed to, for example, is housing construction. Housing construction is in decline in terms of the forward projections which are there. And indeed, due to decline substantially in three months' time, the pipeline of projects simply isn't there. So, Government needs to look at those issues. Unless they do, what we'll see is a whole lot of tradies out of work. And we'll see far less economic activity in the economy, in our cities and in our regions. And that will add, of course, a decline in housing supply. It will add pressure to housing affordability.
JOURNALIST: (Inaudible).
ALBANESE: Well, we were concerned about the early withdrawal scheme from the very beginning, because it certainly isn't in the interests of individual workers to take money out of their superannuation accounts, when it's at the bottom of the market. We argued very clearly that this would result in substantially reduced retirement incomes for working people. That is not good for them. And it's not good for the economy. It's not good for the superannuation sector as well. I might ask Stephen to make some comments on that as well.
JONES: The essential problem of the scam that the Government has set up, quite apart from the policy problems that Anthony has described, is the way they set up the processes. It's a highly automated process. There's very little human intervention. Therefore, it suffers the same sort of problems that Robodebt did. Where are the human beings overseeing the claims that are being made? Well, simply, that's not happening. And in fact, if you look at what went on with the 150 cases of fraud that we know about, it wasn't the tax office that detected the fraud. It wasn't even AUSTRAC and it wasn't the AFP. It was a worker inside a superannuation fund that looked at this and said this doesn't look right. And they alerted AUSTRAC and AUSTRAC did the right thing and commenced the investigation and sent a brief across to the AFP. Now, I might say, this is in the context of a whole heap of Coalition backbenchers criticising the superannuation industry for taking too long to process their claims. There's a good reason they're doing that. These checks need to be made. We've got a system which is inherently problematic. The process that the Government has set up is inherently problematic. They were warned. They ignored it. And now workers are paying the price.
JOURNALIST: Mr Albanese, why did you ask the Shadow Cabinet to consider junking Labor's social spending agenda?
ALBANESE: I didn't. I didn't. Read the document, it's been leaked. I didn't. Read the document. I didn't. Thanks.
ENDS