Superannuation storm as new Lib senator Andrew Bragg defies PM

Andrew Bragg has joined a growing group of Coalition MPs to break ranks on super policy.

Senator Andrew Bragg delivering his maiden speech in the Senate today. Picture: Kym Smith

NSW Liberal senator Andrew Bragg has delivered a scathing assessment of superannuation, joining other Coalition MPs in defiance of Scott Morrison’s request for Coalition MPs to refrain from contradicting the government on policy.

In a speech that will infuriate his former colleagues in the financial services community, Senator Bragg used his maiden speech to the Senate to warn that the performance of the 27-year-old compulsory saving system was so bad it should be voluntary for workers earning less than $50,000 a year. “Superannuation is a classic case of vested interests triumphing over the national interest,” he said. “Super has made the unions, banks and insurers richer than ever.”

Elected at the May 18 election, Senator Bragg has joined a growing group of Coalition MPs who have spoken out against the legislated increase in the compulsory saving rate from 9.5 per cent to 12 per cent by 2025, ahead of a government inquiry into the effectiveness of the $2.8 trillion system.

“The fees are too high, there is not enough competition. There is insufficient transparency,” Senator Bragg said, drawing on Grattan Institute research that found households spent $23 billion a year on energy costs but $30bn on superannuation fees.

Senator Bragg also backed constitutional recognition for indigenous Australians in the Constitution, declaring that the issue would “not go away”.

“If recognition fails, more radical concepts could be proposed such as reserved seats, as already exist in New Zealand and the US state of Maine for first peoples,” he said.

The Prime Minister on Tuesday urged backbenchers to stop freelancing on policy after a series of debates about emerging political issues, including increasing Newstart, removing a ban on nuclear energy, overhauling pension means-testing and providing an indigenous “voice” to parliament.

Barnaby Joyce, who had already broken ranks with Mr Morrison over Newstart, said he would continue to speak out on issues important to his electorate, even if they were contrary to government policy. “I understand exactly where he (Mr Morrison) is coming from. I understand his sentiments. Naturally enough, though, of all people, I must also respect the electorate that sent me here and the job they want me to do,” the former deputy prime minister said.

Mr Joyce said he had “been around longer than the Prime Minister” and seen leaders try to stifle debate within the partyroom once they get the top job through sometimes “nefarious” actions.

“No senior politician across the globe has ever got to their position by sitting under a banyan tree waiting for the world to determine they are enlightened — they got there by the art and craft of politics. But every leader when they get there, understandably, wants as much power as they can have by other people having as little as possible. And that is just politics.

“As a person who has actually been around longer than the Prime Minister in parliament, I have seen this every time,” he said.

Liberal MP Craig Kelly — who has also slammed the increase in the superannuation rate — said he would continue to publicise his views on political issues, despite the edict from Mr Morrison: “It is one thing to openly go and criticise an existing policy. It is another thing to speak about policies that are continually developing.”

Senator Bragg, who said his political philosophy was “Menzian liberalism”, revealed that making super voluntary for lower-income workers could save the government up to $1.8bn a year based on new modelling he had commissioned by Rice Warner.

“Taxpayers could simply tick a box to get a refund when filing an annual tax return,” he said.

Senator Bragg, who had worked for the Financial Services Council before entering parliament, said a forthcoming inquiry into the ­effectiveness of superannuation needed to show that it saved the government money and improved retirement outcomes significantly.