Senator McKIM (Tasmania—Australian Greens Whip) (12:50): Many of the provisions in this bill are uncontroversial and do enjoy the support of the Australian Greens. But I do want to make a few observations around the matters contained in schedule 5 of this legislation, which are reforms around faith-based superannuation funds. I want to specifically make some observations on the current superannuation performance testing regime, which is problematic because it does not encourage people or superannuation funds to take a truly long-term perspective when deciding where and how to invest retirement savings in Australia. In fact, by singularly focusing on financial returns, the current regime risks undermining people's quality of life in retirement. Financial markets, unfortunately, do not take into account that the state of the environment or social harmony are likely to have a large bearing on people's quality of life in retirement. It is truly a debased system if the thing you are invested in to maximise financial returns is going to make the world a less habitable and happy place by the time you're old enough to enjoy those returns. We have got $3.3 trillion in retirement savings in Australia and that money, to the greatest degree possible, should be invested in a way that protects the planet's life supporting climate system and our planet's life supporting ecosystem. It should be invested in such a way, to the greatest degree possible, that fosters a more caring world for the people who live here and a more inhabitable world for the people who live here. Those are the things that we should aspire to deliver, to the greatest degree possible, by using our $3.3 trillion retirement saving scheme. This will require making reforms to the superannuation performance testing regime to encourage people and superannuation funds to make a proactive choice to invest money to further environmental and social aims. Further, the performance testing regime should acknowledge that for some people the pursuit of environmental and social outcomes is actually more important than monetary returns, and it should accommodate, and must accommodate, their willingness to invest accordingly. Schedule 5 of this bill is narrowly scoped but it is in accordance with some of those things that I've just spoken about. The problem is it begins the task in a restricted and inequitable way that is likely to undermine the pursuit of these broader goals. The inquiry into this bill that was done by the Senate economics committee heard evidence that the nature of the carve out provided for in schedule 5 of this bill is in effect a form of religious discrimination. I refer senators to the submission of Associate Professor Scott Donald, from the University of New South Wales, who said this: … as a practical matter minority faiths are unlikely to be able to satisfy the requirements … depriving them of the opportunity afforded more affluent, mainstream religions to use the Supplementary Test. We also heard evidence from Dr Martin Fahy around the technical impediments to establishing an alternative performance test. But what the inquiry did hear is consistent evidence, which was summarised in the chair's report, that, instead of adopting a selective carve-out for faith based funds, the government should establish a holistic framework for the performance testing of all values based superannuation investments. There is a lot being said and done in the world of ESG at the moment—the world of environmental, social and governance issues—where we are seeing a lot of corporations and a lot of superannuation funds make a lot of claims about their ESG frameworks, and it has to be said that not all those claims stack up in reality. One of the biggest ESG problems in the country, by the way, is the massive flaws in the current carbon offsets scheme, which the government has acknowledged by commissioning a review of that scheme. What the Greens want to see is the issue of how the performance test should apply and what its provisions should be for values based superannuation funds—including faith based funds but not limited to faith based funds—determined comprehensively through the current Your Future, Your Super review. I do understand that the minister is going to make a couple of comments on that when she sums up the second reading debate. We know, because I asked them, that Treasury officials have said that performance testing of broader ESG funds and products is within the scope of the Your Future, Your Super review. That was made clear during the Economics Legislation Committee's inquiry into this legislation. It is of critical importance that the establishment of alternative performance tests for values based investment is done properly and done properly from the start. The integrity and sustainability of the system must be ensured, as well as the opportunity for the entire population to participate. The sum of $3.3 trillion, to state the blindingly obvious, is an extremely large pool of money. To the greatest degree possible, this massive pool of money should be directed towards investment into things that actually move our economy to a more sustainable economy and a more low-emissions economy. Those are the things that we need to do if we are to address the twin crises of the breakdown of our climate and the collapse of our planetary ecosystems. Colleagues, we are living through those things today, and those things are killing Australians at the moment. When we see floods and fires like we have seen, with the country inundated and burning in recent years, we cannot pretend that climate change is not driving those events to be more frequent and more severe, because it is. We are going to have massive challenges coming down the line, and one of the many things that we need to do to make sure we address those challenges is start directing a greater proportion of that $3.3 trillion in retirement savings in this country out of infrastructure and investments that are either unproductive or counterproductive in terms of addressing the climate crisis or the biodiversity crisis and directing more of those investments into areas that are productive in terms of addressing the breakdown of our climate and the collapse of the planetary ecosystem. We believe that schedule 5 should not proceed in this legislation, because the issue of how performance tests relate to faith based funds is a small part of a far broader issue that the government has to grapple with, which is how performance tests are couched and how they apply to the entirety of values based funds, including most importantly ESG funds. That needs to be considered as part of the Your Future Your Super Review. We genuinely hope that the government will take those matters on board as part of the review and bring out of that review provisions around amending the performance test, its framing and its application for values based funds that will actually deliver on ensuring that, to the greatest degree possible, we see investment out of that $3.3 trillion into things in our economy that are productive in terms of addressing the breakdown of our climate and the collapse of our ecology.