Explanatory Memorandum
(Circulated by authority of the Minister for Housing and Assistant Treasurer the Hon Michael Sukkar MP)Chapter 3 - Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Treasury Laws Amendment (Putting Members' Interests First) Bill 2019
3.1 This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
3.2 This Bill contains amendments to the SIS Act and SUMLM Act, to protect individuals' retirement savings from erosion, ultimately increasing Australians' superannuation balances.
3.3 Superannuation is a major part of Australia's retirement income system. Together with the Age Pension and savings outside superannuation, it supports Australians in their retirement years.
3.4 Superannuation is now the second-largest savings vehicle for Australian households (accounting for 17 per cent of household assets). Its importance is projected to grow rapidly in the coming decades.
3.5 Given the importance of superannuation to Australians, the Government is seeking to ensure that people's hard-earned savings are not unnecessarily eroded by fees or inappropriate insurance arrangements.
3.6 The Bill will protect members' superannuation savings from erosion by ensuring that arrangements for insurance in superannuation are appropriate so that members are not paying for insurance coverage that they do not know about or premiums that inappropriately erode their retirement savings.
3.7 This Bill prevents trustees from providing opt out insurance to new members aged under 25 years or members with balances below $6,000, unless a member has elected otherwise.
3.8 This will better target default insurance cover and prevent inappropriate erosion of retirement savings caused by insurance premiums.
3.9 Members will still be able to obtain insurance cover within their superannuation if they choose to do so.
Human rights implications
3.10 This Bill does not engage any of the applicable rights or freedoms.
Conclusion
3.11 This Bill is compatible with human rights as it does not raise any human rights issues.