Paul Fletcher (Bradfield, Liberal Party) Share this | Hansard source

There is a curious logical contradiction in what the minister is saying to the House this morning. He has just told us that the government do not say big is better than small. Well, if you do not say that, do not put a provision to that effect into the legislation. It is very simple. Let us be clear. Trustees of superannuation funds have an extremely comprehensive and extensive range of duties. There can be no question that superannuation fund trustees today have extensive legal duties to act in the best interests of members of the fund. The proposition from the minister that what we need to do on this specific point is buttress the existing law by adding in a specific obligation to consider scale is one that we should therefore test very carefully. We should only expand upon the existing black letter law duties of trustees of superannuation funds if a very good case is made out for that change.

When you look at the merits of the argument, it is clear that scale has pros and cons. Yet we have an amendment put by the government, a provision in the bill, which assumes that scale is an absolute good. It asks the trustees of small funds to consider each year whether they are big enough and, if not, to consider whether they should merge. The policy case for that has not been made out. But it is clear that there is one segment of the industry whose interests are very well served by such an amendment, and that is the existing larger funds, particularly the larger industry funds. If you are in charge of, for example, the $43 billion Australian Super, this probably looks like a great idea. If you are the Industry Super Network, representing a range of industry funds including a number of the very large funds, this probably looks a good idea.

But I can tell you that' if an argument of this kind were being made in other industries, you can only imagine the howls of protest that would result. If it were put to the House that there should be a duty every year on the directors of Virgin to determine whether their company was as big as Qantas and, if it was not, to change its business structure accordingly, you can only imagine the howls of protest. If there were a duty imposed every year upon the directors of Bendigo Bank to ask whether their company was as big as Westpac and, if it was not, to pursue a change in business structure accordingly, you can only imagine the howls of protest. And looking at the industry from which I came before I came into the parliament, the telecommunications industry, if it were put into the legislation that there was a duty every year on the directors of AAPT, Primus, Internode and iiNet to ask themselves whether they are as big as Telstra and, if they were not, to pursue a change in their business structure, you can only imagine the howls of protest. You can only imagine the arguments which would be put saying this is a change to the law which suits the interest of the big end of town and the case has not been made out on policy grounds. But that is exactly the position we are in when it comes to this provision of this bill which the government is seeking to have this House pass. This is a bill which suits the interests of the big end of town in the superannuation industry, and that is not a good thing when the policy case for what is being proposed has not been made out. We have nowhere heard from the minister, from the government, a convincing policy case as to why scale is an absolute good. That is why on this side of the House we have moved an amendment which would remove these contentious provisions from the bill. We would remove the contentious proposed section 29VN because it is based on an underlying policy idea the case for which has not been made out. When the peak body representing superannuation trustees has expressly put the view that it is misconceived and it is based on an improper prioritisation of the objectives which ought to be motivating superannuation trustees, then we on this side of the House have very profound reservations and it is those reservations which underpin the amendment we have put.

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