I acknowledge the traditional owners of the land on which we meet, the Gadigal people of the Eora nation, and acknowledge elders past, present and emerging.

I believe the financial services sector has a vital role to play in lifting indigenous economic engagement and financial literacy.

I am sure you, like me, were horrified by some of the harrowing evidence before the Royal Commission that some unscrupulous operators were using indigeneity as an opportunity for mis-selling of products.

But I also know that there is good work which occurs in the financial sector and there are enormous positive opportunities to do so much more.

So I look forward to engaging with the FSC and your members on these opportunities should I become Treasurer in a few weeks’ time.

I’ve been addressing FSC conferences since 2007.
But this one comes at a particularly acute time in our politics.

There are 43 days until the most likely date of the Federal election.

There is no complacency in the Labor Party.  We must earn every vote, earn every seat. 

But we are ready.

Not only ready for an election. 

Much more importantly, ready for government.

Canberra is broken.  The revolving door Prime Ministership (and treasurership) must come to an end.

The lack of reform agenda, of a coherent economic policy narrative from the Government must come an end. 

We go to the people with the comprehensive, detailed and thorough policy offering of any Opposition in living memory.

An agenda that has only been possible to develop because we’ve had the unity and stability which has enabled us to concentrate on the important things for the country: the alternative vision, the plan for our country.

We go with a stable team, with six years of unity and stability under our belt.

Bill of course faces his third Prime Minister.
Tanya faces her third Deputy Prime Minister. With speculation that there may be yet another, last minute change.

Penny actually faces her fourth Liberal Senate Leader.
So dysfunctional is the situation that one of those leaders served for one day last year when effective government stopped during the removal of Malcolm Turnbull.

And when Josh Frydenberg and I debate each other during the election campaign, it will be the third Liberal Treasury spokesperson I face in those election debates.

And of course, it’s about policy as well as personnel.
The Liberals have offered us twelve energy policies in six years.

And they currently have no energy policy.

This dysfunction comes at a great cost to every business.

Even businesses who aren’t large energy users directly like yourselves suffer in an economy that has gone from having some of the lowest energy prices in the developed world to some of the highest.

Brought about because of the lack of policy coherence which sees no stable policy framework for investment.

The Liberals cannot go this election promising stable government.

If they do, it will rightly be seen as a bit of a silly joke.

In four days time the budget will be brought down. 

Unfortunately, after six years of Liberal Government the budget to be handed down next week is going to be a rather desperate throw of the dice attempt to change the political conversation, as opposed to a blueprint for reform, fiscal repair or growth.

A document focused on the Government’s immediate political survival that disregards fiscal discipline and fails to put in place a plan for the future.

This stands in stark contrast to the approach of Labor.

Labor hasn’t relied on a wish and a prayer that international circumstances and the more favourable terms of trade will remain; we’ve made the big calls which are necessary to put the budget back on to a stronger structural footing, and will deliver bigger budget surpluses than the government.

Recent national accounts highlight the issues we confront if we want to ensure our 27 years of recession free growth continues.

  • two consecutive negative quarters of GDP per capita economic growth;
  • the weakest consumption growth in several years;
  • stalling productivity; and
  • ongoing anaemic wages growth.

But we have a government too caught up in its own melodrama, lurching from internal crisis to crisis instead of developing and offering a coherent plan for the future.

Well, we do have a comprehensive economic plan, and today in this speech I will be announcing some further elements of it.

How our housing market works is important for our economy and society.

Home ownership is the foundation for most Australians wealth creation plans.

But first home buyers have found it very difficult to get into the market in recent years, especially in Sydney and Melbourne.

Labor has consistently led the debate when it comes to tax and housing affordability.

We announced our reforms to negative gearing over three years ago. We’ve withstood the shrill scare campaigns and the apocalyptic warnings. The political pundits postulated that negative gearing reform would be all too hard for any major political party, but we’ve tackled it and stuck with it
We’ve argued the case.

We listen to evidence from independent voices such as the Government’s own financial systems inquiry, the International Monetary Fund and the independent Grattan Institute.

Just last month the International Monetary Fund again endorsed reforms to negative gearing and the capital gains tax discount.

In contrast, we had the current Prime Minister argue for a brief period of time in 2016 that there were “excesses” in negative gearing. We are told he argued for reform in Cabinet, but got rolled. Instead, he signed up for the pathetic scare campaign which continues to this day.

Negative gearing start date

Today I can announce that Labor’s reforms to negative gearing and the capital gains tax discount will commence from 1 January 2020.

This of course means that any investment undertaken prior to 1 January 2020 will be fully protected by our grandfathering arrangements.

That is, all investments made before the 1 January 2020 will continue to enjoy the current negative gearing and capital gains tax concession arrangements.

This gives investors adequate time to plan and invest this year before the new rules come into force.

It also means that we will be able to take the necessary legislation through all the necessary legislative processes including ensuring draft exposure legislation is properly consulted on.

Now I can easily predict that by the end of today, the Treasurer will wave his hands in the air and try and call this some kind of a delay.

But of course he’d be completely wrong. We hadn’t previously announced a start date, you can’t delay a date you haven’t announced.

When we announced our changes to negative gearing in 2016, we allowed for a 12 month lead in time to when our changes were due to start.

A 1 January 2020 start date allows for around 7 months, a less but we think sufficient amount of time to get the legislation in place before the changes are due to come into effect.

This is what you’d expect from a sensible and responsible incoming government.

Build to Rent

Just a few years ago Australia’s housing boom was delivering record residential dwelling construction making it a strong contributor to the nation’s economic growth.
But it’s on its way to being a heavy detractor.

National Australia Bank forecasts that dwelling investment could fall sharply by 18% over the next two years.

These falls come off record high levels, but we need to ensure we have confident and vibrant housing construction sector because we need to keep building to ensure our future growing population is affordably housed.

Of course, our negative gearing changes will buttress some of this weakness by targeting tax concessions at new residential construction.

A policy some housing developers have said will see their business “rip”.

We also announced last year that an incoming Shorten led Labor Government will turbocharge housing construction in Australia, with a ten- year national plan to build 250,000 houses -  Australia’s biggest ever investment in affordable housing.

But we think we can do more.

Owning a home is part of the Australian dream, which is why we’ll reform negative gearing and put those prospective first home buyers that want a home back in the game.

But we understand that there will always be a cohort of people renting, either because they can’t afford to buy a home yet, or it is simply their preference.

There are currently around 2.7 million renters in Australia.

I bet many of these people have faced the situation in which they have tried to create a comfortable home, but unexpectedly have been forced to move on when a landlord, for whatever reason decides to change the arrangements.

We think there’s more to be done here, and is why today I can announce that an incoming Labor Government will reform the tax treatment for “Build to Rent” to ensure it’s a viable part of the housing market in Australia, just as it is in several comparable countries.

We will do this by ensuring Build to Rent housing can be included within a Managed Investment Trust when they meet requirements that are currently in place for commercial property assets, basically where they are a passive investment held primarily for the purpose of deriving rent.
This means that eligible Build to Rent investments will pay a 15% tax rate, not the 30% rate proposed by Scott Morrison, which would be double the rate for investments in shopping centres and office buildings.

It will make a build to rent viable in Australia and provide a tax rate in keeping with the treatment in other countries.
The central benefits of build to rent is it provides more stable long term tenancies and more housing in desired locations close to public transport and close to employment opportunities.

This is good for families who want to spend more time with each other, and less time travelling to and from work.
It’s an internationally-proven way to provide better housing choices for people who rent their home.

It has proven successful in many countries around the world, including the UK, USA, Germany and Japan.

This is of course relevant to funds held under management in Australia and to Australia’s 2.7 trillion superannuation sector.

At the moment superannuation funds look offshore for these types of assets.

Australian superannuation providers such as the Retail Employees Superannuation Trust (REST) have over 3000 Build to Rent apartments in the US, from Austin to Boston.

Now that’s great, but why not have them investing in Australian Build to Rent as well. Indeed, a properly functioning Build to Rent sector in Australia would be an opportunity for every organisation represented in this room, if you so choose, to invest in housing construction and long term rentals.

The conditions aren’t conducive here in Australia.
We won’t be a road block like Scott Morrison.

Scott Morrison personally mishandled and stunted the growth of Built-to-Rent in Australia – by unilaterally and without notice banning managed investment in build-to-rent on Friday 14 September 2017, and he still hasn’t moved to the concessional rate.

We can do better than that. And Labor will.

Labor has a comprehensive plan to boost housing in Australia, together with our reforms to target negative gearing at new housing stock, our plan to build 250,000 new affordable homes and our reforms to create a viable Build to Rent sector in Australia.


I’ll now turn to superannuation.

Its fair to say that everyone in this room believes in superannuation.

But no-one believes in it more than the people who created it: the Labor Party.

Superannuation has delivered many benefits for Australians.
It’s opened up the financial markets to the many, not just the few.

Its seen our funds management sector grow exponentially, with huge export potential.

It’s already taking pressure off the aged pension and will continue to do so even as the population ages.

The Liberals have argued in their time in office that the age pension in Australia is unsustainable, that Australians shouldn’t get it until they are 70, that the indexation rate should be cut and they took 100,000 people off the pension without warning.

But they are wrong to argue the pension is unsustainable. 

In fact, we probably have the most sustainable pension system in the world: because of superannuation.

Consider this: the age pension costs around 3% of GDP.
That’s low by international standards.

But as other countries grapple with burgeoning pension costs associated with an ageing population, we do not.

The last intergenerational report showed the cost of the pension growing from around 3% of GDP to just 3.5% by 2055 despite the rapidly ageing population.

A combination of compulsory superannuation and pension means testing makes this possible.

Our $2.7 trillion pool of superannuation assets means Australia now has the third largest private pensions industry in the world after the USA and the United Kingdom.

But it could have been ever better.

As you know, the original Keating time table saw superannuation getting to a 12% contribution rate about twenty years ago.

Because both the Howard Government and the Abbott-Turnbull-Morrison Government have cancelled scheduled legislated superannuation increases, we are still stuck at 9.5% all these years later.

As a result, the average person retiring today has $100,000 less in their superannuation balance than if the original Keating timetable had been kept to.

But it gets worse. 

And in recent days we’ve seen media briefings from the Government that they are considering yet further cancellations of scheduled increases in the superannuation guarantee.

Let me make it clear that the Labor Party does not regard a 9.5 per cent SG as providing adequacy – we will oppose any moves for further delays to the superannuation guarantee.

Now I’d like to turn to a two other areas of superannuation that despite all the attention on superannuation in the first few months of this year, have received basically no attention. Yet these two areas will be at the centrepiece of Labor’s policy priorities for improving superannuation:  making super work for women and dealing with superannuation theft. 

It is completely unacceptable for there to be such a big retirement income gap between Australia’s men and women in 2019. 

The gender pay gap compounds through a woman’s working life and is worsened by maternity leave and other career breaks for family purposes. 
Women retire with median superannuation balances that are just $36,000 compared to $110,000 for men. Two in five retired single women live poverty.

And we call superannuation universal.  But it isn’t.  Our lowest paid workers (who also are predominantly women) don’t get any superannuation. 

You have to earn more than $450 a month in a particular job to receive any superannuation at all. 

Some of our most vulnerable workers are working multiple casual or part time jobs earning less than the threshold and eventually retiring with nothing in superannuation. 

It’s why Labor has been on the front foot on these matters.

We’ll ensure women get paid the superannuation guarantee on Paid Parental Leave and Dad and Partner Pay payments and we’ll also gradually abolish the $450 a month threshold.

This isn’t a panacea, but it’s a significant step in the right direction.

These measures alone will see a mother that has two kids in her late 20s with an extra $24,000 in today’s dollars when she retires. 

In my electorate office, I see too many people who come to me for help when they realise their employer has not been paying their superannuation.  Often it’s too late to help them.  

Nearly $3 billion each year is lost from superannuation accounts from employers who decide the law doesn’t apply to them. This is nothing short of theft. 

It also puts those businesses doing the right thing and meeting their obligations at a competitive disadvantage.

This is why Labor will change the law to include a right to superannuation within the National Employment Standards, which will give all employees the power to pursue their unpaid superannuation through the Fair Work Commission or Federal Court.

Finally, to fund underperformance.

The Productivity Commission report “Superannuation: Assessing Efficiency and Competitiveness” and more recently the Royal Commission both identified some real problems with chronically underperforming funds.

Shifting the dial even by a few basis points can have huge ramifications for people when they retire due to compounding over a working life, which makes getting people into better performing funds paramount.

The PC highlighted the real implications for fund members, pointing out that a typical full time worker in an underperforming fund in the bottom quartile over their lifetime would end up with 54% or a massive $660,000 less in retirement compared to if they had experienced top quartile fund returns.

Right now there is a bill in the Parliament which would require super funds to report on their performance compared to similar products.

Labor amended this bill in the Senate to make the outcomes test tougher, make director penalties higher and make APRA’s powers stronger.

Millions of Australians are being ripped off by underperforming accounts and we want to force these funds to report on their performance and lift their game.

The Government – preferring politics over policy – opposed our amendments, and has failed to bring the bill back to the House of Representatives for a vote.

I want to make it clear: consistently underperforming funds, regardless of whether they are industry funds or retail funds will have no sympathy from a Shorten Labor Government.


Let me conclude by thanking the FSC for your invitation to be here today.

And for your ongoing interactions with me over this term, over the years.

As Assistant Treasurer, as Minister for Financial Services, as (all too briefly) Treasurer, I’ve interacted with the FSC on a very regular basis.

We don’t always agree.

But I think it’s fair to say we always understand each other and respect each other.

There will be much to do in financial services whoever wins the Federal election in a few weeks’ time.

From our point of view, we will continue to be informed by regular consultation across financial services, including with the FSC.

I could have covered many other areas today.  I could have spoken about our plans for a Council of Superannuation Custodians, I could have discussed my ongoing interest in polices to promote Australia as a financial services hub.

Perhaps we’ll discuss some of those in the Q and A session.  But I am sure we will discuss their implementation in our ongoing dialogue.

And I relish the opportunity for us to work together, in the national interest, should I get the opportunity as Treasurer in the middle of May and beyond.