The Ghost of National Superannuation Emily Millane LLB, BA Arts (Hons) University of Melbourne Crawford School of Public Policy College of Asia and the Pacific Australian National University November 2019 Thesis submitted for the degree of Doctor of Philosophy of The Australian National University © Copyright by Emily Millane, 2019 All Rights Reserved 1 Statement of originality This study has not previously been submitted for a degree or diploma in any university. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made in the thesis. Emily Millane 2 ABSTRACT The thesis uses the case study of Australian superannuation to examine the conditions for systemic policy change. It tells the history of a modern reform. Long-running debates about superannuation policy have led to the system that Australians know today. A narrative of superannuation emerges, showing that it was a product of long- term institutional continuities, more than existing narratives would suggest. The theory of historical institutionalism is brought to bear to argue that the introduction of Australia’s national superannuation system was the evolution of a welfare system whose architecture was established around the time of Australian Federation. Occupational superannuation had existed in Australia since the 1840s, old age pension schemes were introduced in NSW, Victoria and Queensland in the 1890s, and the Commonwealth Old Age Pension was introduced in 1908.1 The thesis traces the history of debates about public pension financing and the eventual pivot towards Australia’s unique state-mandated, private superannuation system based on defined contributions. Throughout this history, the thesis considers the cross-cutting themes of gender coverage, influences on policy makers and risk. The thesis is arranged around the points in time when the introduction of a national superannuation system was considered and legislated by Australian governments. It moves through the 1890s during the old age pension debates; the 1920s and the Royal Commission on National Insurance and National Insurance legislation introduced by the Bruce government; the 1930s and the National Health and Pensions Insurance Act, passed but never implemented by the Lyons government; the 1970s and the Whitlam government’s proposal for national superannuation, and then, finally, the introduction of the modern system in 1992 under the Keating government’s “Superannuation Guarantee.” After years of opposition, following World War II the Australian Labor Party changed its policy to support contributory pensions. The policy rhetoric towards this change began after World War II. Occupational superannuation was radically reconceived and remodelled by labour reformers between the 1970s and the early 1990s, creating a new pathway of policy development and “layering” new elements so that the institution 1 Invalid and Old-Age Pensions Act 1908 (Cth). 3 would serve a broad working constituency. During the term of the Hawke and Keating governments, there was a “critical juncture” in superannuation policy but incremental change was occurring too. This points to the limits of institutional theory, in which different modes of change are said to occur at different points in time. The history of superannuation policy is drawn into the present by looking at the period between the introduction of the Superannuation Guarantee in 1992 and 2019. It focuses on the changes in respect of “choice of fund,” arguing that heavily politicised debates over choice over superannuation fund were the result of the decision to create a private system of superannuation. The Choice of Fund legislation in 2005 and the MySuper reforms in 2013 that deal with the choice of superannuation fund are examples of policy “layering” and “displacement,” reflecting the power struggle between the Labor Party and the conservative parties to control financial flows in the system. This struggle was one which labour actors set themselves up for by establishing superannuation within an industrial framework debate rather than as a government scheme. Why does systemic policy change happen when it happens? Why does reform go in one direction rather than another? Why do political parties introduce policies that their predecessors opposed in the past? These are the fundamental questions with which this thesis grapples. 4 Acknowledgments How lucky I have been. To have had three marvellous, engaged, supervisors who are now also friends. Professors Miranda Stewart, Frank Bongiorno and Peter Whiteford, you have been stellar. My thanks to the interviewees for this project, especially to Bill Hayden who generously gave his time to discuss superannuation policy history when he was not in good health. Thanks also to the people who helped to facilitate the interviews. The staff at the National Archives, the National Library, the University of Melbourne Archives, the Noel Butlin Archives at the Australian National University and the Parliamentary Library are all national treasures, who treasure our history. I have been fortunate to call the staff at the Parliamentary Library my colleagues and friends too. Thank you to the people have given their time to read drafts of the thesis at various stages. To Stuart Macintyre, Paul Karp, Shaun Crowe, Brian Howe, Francis Castles, Cath Bowtell and Dad. Karin Hosking provided professional copyediting assistance. There were many people who helped to shape my thinking about the project, and who helped with sources, including David Ingles, David Stanton, Julie Smith, Nicholas Brown, Adam Stebbing, Michael Rice, Stuart Macintyre and Peter Martin. I am so glad I got to study at the Australian National University, and to experience life in Canberra. Thanks to my colleagues Nathan Attrill, Megan Poore, Bjoern Dressel and Marija Taflaga for their wisdom and support. And to an ANU friend and housemate, Liam Gammon: thank you for the restorative cups of miso, the Anthony Bourdain re-runs and the existential chats. To my family and friends who have been there for all the big things and little things along the way. I simply would not have finished the thesis without you. I’m forever grateful to Mum and Dad, Frances and Alan, Siobhan Kelly, Primrose Riordan and Elouise Fowler. It takes a village to raise a thesis! 5 Contents Statement of originality ........................................................................................................... 2 Abstract ......................................................................................................................................... 3 Acknowledgments ...................................................................................................................... 5 List of Figures and Images ...................................................................................................... 9 List of Tables .............................................................................................................................. 10 List of Interviewees .................................................................................................................. 11 List of Abbreviations ............................................................................................................... 13 Chapter One: Introduction ................................................................................................... 16 Research Questions ................................................................................................................. 18 Concepts used in this thesis .................................................................................................. 19 Superannuation ........................................................................................................................... 20 Pensions ......................................................................................................................................... 22 Retirement .................................................................................................................................... 23 Public Policy .................................................................................................................................. 25 Methodology ..............................................................................................................................26 Sources ....................................................................................................................................... 30 Structure of the thesis ............................................................................................................ 32 Chapter Two: Literature Review and Theoretical Framework ................................. 34 Australian superannuation .................................................................................................. 34 The “Hawke-Keating era” and Labor tradition .............................................................. 39 Historical Institutionalism ................................................................................................... 43 Institutions and time ....................................................................................................................44 Critical junctures, path dependence and path reaction ............................................................ 45 Unsuccessful policy change .......................................................................................................