Chris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

The main purpose of the Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2007 is to make consequential amendments to 30 current acts arising from the establishment of the Public Sector Superannuation Accumulation Plan on 1 July 2005, the establishment of a single entity to administer the Commonwealth superannuation schemes for Commonwealth government civilian employees, the introduction of a new regime for managing legislative instruments under the Legislative Instruments Act 2003 and changes to the earning bases for the superannuation guarantee regime from 2008.

As background, the Public Sector Superannuation Accumulation Plan was established on 1 July 2005. The establishment of this plan was a direct result of the closure to new members of the defined benefits Public Sector Superannuation Scheme. As the honourable member for Cunningham and I know, defined benefits schemes have been closed to several categories of Commonwealth employees. This plan is the main Commonwealth superannuation scheme for those entering the Commonwealth Public Service from 1 July 2005. The establishment of the PSSAP meant there were three Commonwealth civilian superannuation schemes: the CSS, the PSS and the PSSAP. The management of these three schemes is now undertaken by the newly formed Australian Reward Investment Alliance. This body replaced the former CSS and PSS boards.

In relation to the LIA, from 1 January 2005 a regime was established to reform and manage procedures for the making, scrutiny and publication of Commonwealth legislative instruments by establishing a federal register of legislative instruments; encouraging rule-makers to undertake appropriate consultation; encouraging high standards in drafting legislative instruments to promote their legal effectiveness, clarity and intelligibility to users; providing public access to legislative instruments; establishing improved mechanisms for parliamentary scrutiny of legislative instruments; and establishing a sunset mechanism to ensure periodic review of legislative instruments and, if they no longer have a continuing purpose, to repeal them.

This bill changes the earnings base for the superannuation guarantee from 1 July 2008. It removes a pre-21 August 1991 lower base for SG calculations, principally in the mining industry. From 1 July 2008, superannuation guarantee requirements are to be changed to simplify the earnings base of an employee for superannuation guarantee purposes. The Superannuation Laws Amendment (2004 Measures No. 2) Act 2004 simplifies the earnings base of an employee for SG purposes. The SG amendments already enacted but to be applied from 1 July 2008 will have the effect that all employers will calculate their SG liability against an employee’s ordinary times earnings. Various provisions will be removed from 1 July 2008 so that simpler ordinary times earnings will be the basis of calculation in all cases.

Among the provisions that will be repealed are those which allow the use of a pre-21 August 1991 earnings base and earnings bases specified in industrial awards, superannuation schemes, occupational superannuation arrangements or law of the Commonwealth, state or territory. From 1 July 2008, employers will still be able to use notional earnings bases specified in legislation or industrial agreements on the basis of their superannuation guarantee contributions where these are above an employee’s ordinary times earnings, but the superannuation guarantee will be assessed only against ordinary times earnings. This is largely a technical bill, which the opposition supports.

See this speech in context