Gary Nairn (Eden-Monaro, Liberal Party, Special Minister of State) Share this | Link to this | Hansard source

I present the explanatory memorandum to this bill and I move:

That this bill be now read a second time.

The Bankruptcy Legislation Amendment (Superannuation Contributions) Bill 2006 will amend the Bankruptcy Act 1966 to provide that bankruptcy trustees can recover superannuation contributions made to defeat the claims of creditors.

These amendments respond to the High Court’s decision in Cook v Benson, the effect of which has been to make it very difficult for bankruptcy trustees to recover superannuation contributions made by a person in the lead-up to bankruptcy, even where those contributions were made specifically with the intention to defeat creditors. This represents a significant threat to the integrity of the bankruptcy system because it means that a person facing bankruptcy can transfer assets into superannuation to ensure they are not available to pay creditors. As jointly announced by the Minister for Revenue and Assistant Treasurer and the Attorney-General on 27 July 2006, the amendments will apply to superannuation contributions made on or after 28 July 2006.

The amendments provide an appropriate balance between the need to encourage people to save for retirement and the need to protect creditors from unscrupulous debtors who can currently attempt to avoid paying their debts by converting wealth into superannuation in the lead-up to bankruptcy. They will allow superannuation contributions to be recovered only where there has been deliberate action by the bankrupt to avoid paying creditors.

The amendments have been developed following extensive public consultation. The approach taken by these amendments avoids the complexity of earlier proposals and is consistent with the government’s plan to simplify and streamline superannuation. I would like to note the report of the Senate Standing Committee on Legal and Constitutional Affairs following its inquiry into this bill. The committee noted the extensive public consultation undertaken in developing these amendments and the broad support for these amendments and recommended that the bill be passed.

The amendments are based on section 121 of the act, which deals with transfers of property by a person who subsequently becomes bankrupt where the transfer was made with the intention to defeat creditors. The new provisions will ensure superannuation contributions made with the same intent are recoverable on the same basis as other transfers.

In line with section 121, the new rules will allow the trustee to assume that superannuation contributions were made with the intention to defeat creditors where the bankrupt was insolvent at the time of making the contributions. The court will also be empowered to consider the bankrupt’s history of making superannuation contributions in determining whether the requisite intention existed at the time.

Where contributions are void under the new provisions, the official receiver will have the power to issue notices to the trustee of the superannuation plan requiring payments to be made to the bankruptcy trustee. These powers are already exercised by the official receiver under section 139ZQ of the act in relation to other void transfers.

This bill includes other amendments to facilitate recovery of void superannuation contributions, including a power for the official receiver to issue a superannuation account-freezing notice to prevent any dissipation of funds. The bill also provides clear protection for superannuation fund trustees who comply with notices issued by the official receiver to recover contributions.

The bill also contains amendments designed to protect certain types of rural grants in the event of the recipient’s bankruptcy. The Bankruptcy Act already protects certain types of grants—for example, grants pursuant to the Dairy Exit Program and the Farm Help Re-establishment Grant Scheme. The amendments represent no change in policy and will simply allow new classes of grants to be exempted more quickly.

Finally, the bill also includes some minor and technical amendments to improve the operation of the Bankruptcy Act.

I commend the bill to the House.

Nicola Roxon (Gellibrand, Australian Labor Party, Shadow Minister for Health) Share this | Link to this | Hansard source

I rise to speak on the Bankruptcy Legislation Amendment (Superannuation Contributions) Bill 2006. As the minister has outlined, the principal effect of this bill is to allow the recovery of funds placed in superannuation by defaulting debtors if the placement of those funds was made with the intention of defeating creditors. In part, it deals with the problems identified by the High Court in 2003 in the case of Cook v Benson. The thrust of this bill is to bring superannuation contributions in line with other transfers of funds that have been effected to defeat creditors. The bill will work in two ways to stop this from happening. The first schedule contains provisions which will have the effect of making certain superannuation contributions invalid and provide for the conditions under which these contributions may be recovered. The second schedule makes other amendments, including in relation to payments made under rural support schemes and the role and functions of the inspector-general. The first schedule provides for two types of recoverable contributions: contributions made by a person who later becomes a bankrupt and contributions made by a third party on behalf of a person who later becomes a bankrupt.

The new provisions introduced by part 1 of the first schedule largely mirror an existing section within the act which applies to other transfers of funds. Briefly, they provide the basis on which the court determines whether or not the transfer of funds was made with the intent of defeating creditors. These include considerations such as whether or not it can be reasonably inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent. They also contain considerations which relate to whether or not the contribution was out of character. In line with existing subsections, the rights of innocent transferees are protected. There are also sections in the bill which relate to superannuation contributions made by a third party. The explanatory memorandum states that this is to take into account certain types of contributions, such as salary sacrifices.

Part 2 of the first schedule contains the amendments relating to the processes for the recovery of superannuation contributions. The official receiver will be granted the power to issue a notice to freeze a superannuation account under certain conditions in order to avoid the bankrupt person dealing with the fund in such a way as to prevent the superannuation being recovered. Section 128E will provide the receiver with a wide variety of powers to restrict the operation of a superannuation account.

There are provisions further on in the amendments which will allow a person whose superannuation account is frozen to apply to the official receiver to deal with the account in certain ways. Under specified conditions, the receiver may consent to such dealings. There are also provisions that allow for a court to set aside an account-freezing notice.

Another new section, 139ZU, provides for the circumstances in which a person has rolled over a contribution to another superannuation account.

Finally, schedule 2 makes some technical amendments to the act, and also provides for the protection of certain payments under rural support payment schemes. I commend the bill to the House.

Barry Wakelin (Grey, Liberal Party) Share this | Link to this | Hansard source

It is my pleasure to speak on the Bankruptcy Legislation Amendment (Superannuation Contributions) Bill 2006. I will be very brief too, so, for any subsequent speaker, I let it be known that I will only be four or five minutes. As we know, the objects of the bill are to provide for the recovery of superannuation contributions made with the intention to defeat creditors, to provide for certain rural grants to be exempt from the property available to pay the bankrupt’s creditors and to make minor technical amendments to clarify or improve the operation of the Bankruptcy Act 1966.

I will address the second of the objects first because it is the one that I know a little about. In my experience within the agricultural industry, there has always been this doubt. From time to time, creditors have sought to confiscate, if you like, some of these grants that are made by government. Just to remind the House, they are grants pursuant to the Dairy Exit Program and the Farm Help Re-establishment Grant Scheme. The grants can sometimes be a significant amount of money when somebody has lost everything, and the intention of the government is to offer grants of up to $50,000—perhaps a little more—to assist people who at some point in their lives had significant assets but, due to a series of circumstances, have ended up with nothing.

This is the government’s way of saying, ‘We have empathy and, at the very least, there should be a limited amount of cash there to help you re-establish.’ This bill endeavours to protect that. As the minister said in his second reading speech, currently the act must be amended every time a new class of grant becomes available which should be exempted from a bankrupt’s divisible property. To avoid this, the bill will include a power to prescribe these grants in the regulation. As we know, the regulations can be made at the time that a new class of grant is created without having to wait for the act to be amended and laid on the table.

The issue of the official receiver in relation to other void transfers is dealt with under an interesting section of the act, 139ZQ. To remind us, the minister said in his second reading speech that because there is a risk that a bankrupt may move money out of the superannuation plan before the trustee has finalised investigations and instigated recovery action, the trustee will also be able to request the official receiver to issue a superannuation account-freezing notice to prevent any dissipation of funds. There will be time limits on the effectiveness of these notices to ensure trustees do not unreasonably delay a recovery action. The bill also makes it clear that a trustee of a superannuation plan who complies in good faith with a notice given by the official receiver will not be exposed to any civil or criminal liability as a result of that compliance.

The announcement was made by the Attorney-General and the Minister for Revenue and Assistant Treasurer on 27 July 2006. The amendments will apply to any contribution made on or after 28 July 2006. The bill will have little or no financial impact, and I understand that there has been an inquiry into the bill by the Senate Standing Committee on Legal and Constitutional Affairs, which recommended that the bill be passed. For the purposes of the Bankruptcy Legislation Amendment (Superannuation Contributions) Bill 2006, I see no need to say anything further.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I advise the minister at the table that I too will be going short of my allotted time in this speech. I do not rise to oppose the Bankruptcy Legislation Amendment (Superannuation Contributions) Bill 2006 but I do wish to point out some shortcomings, at least from my perspective. The most significant amendment made by this bill will be to allow bankruptcy trustees to recover superannuation contributions made prior to bankruptcies which are intended to defeat creditors. The amendment addresses the problem highlighted in the High Court decision in Cook v Benson in 2003, which opened up the possibility that people could hide money from their creditors by putting it into superannuation before declaring themselves bankrupt. This is a welcome amendment. I am sure that creditors who in the past have had money slip through their fingers will be keen to see that the loophole highlighted by the Cook v Benson matter will be closed.

As indicated by previous speakers, the overall purpose of the amendments in this bill is as follows. The bill will allow a bankruptcy trustee to recover the value of contributions to an eligible superannuation plan made by the bankrupt to defeat creditors. It will allow the trustee to recover contributions made by a person other than the bankrupt for the benefit of the bankrupt where the main purpose, again, was to defeat creditors. It will ensure that consideration given by the superannuation trustee for the contribution will be ignored in determining whether the contribution is recoverable by the bankruptcy trustee. It will allow the court to consider the bankrupt’s historical contribution pattern and whether any contributions were out of character in determining whether they were made to defeat creditors. The bill will provide that a superannuation fund will not have to repay any fees and charges associated with the contributions or any taxes it has paid in relation to the contributions. Finally, it will give the official receiver the power to issue a notice to the superannuation fund or funds that are holding the contributions that will put a freeze on the funds in order to prevent a bankrupt from rolling them over into another fund, therefore seeking to cover moneys that would otherwise be recoverable in bankruptcy.

These are all very sound measures that will act in concert to close the loophole that allows money to be channelled into the superannuation fund of the bankrupt or someone acting in the interests of the bankrupt in order to defeat creditors. However, as I noted at the outset, I do not believe that these measures go far enough. While welcome for creditors, these amendments do absolutely nothing for working Australians who lose their superannuation entitlements when companies go bankrupt.

There are not too many worse things that can happen to any working Australian than for them to find themselves out of work as the organisation they worked for has gone into either liquidation or bankruptcy. It is devastating to anyone who has been in that situation. In many cases it is very much unexpected when they find themselves out of work as a result of poor company performance. However, finding yourself out of work can quickly become worse when a worker finds that an organisation that they have been working for has not put aside the employees’ entitlements to cover their liabilities. I have dealt with many working Australians in the past who have experienced this. There are many thousands of people who fall into this category. Even as a local parliamentarian I have worked with people who have lost thousands of dollars simply because someone in their company did not put aside money to cover leave, long service and other entitlements.

I note that members opposite would indicate that those entitlements could be accommodated by the General Employee Entitlements Redundancy Scheme, or GEERS. GEERS does not work well enough and it certainly does not work in the recovery of superannuation entitlements. I know GEERS does not work as well as working Australians want it to because I have been involved in an ongoing debate between an insolvency company and the Department of Employment and Workplace Relations about some technical specifications of a deed of arrangement which has cost one of my constituents a considerable amount of money. Despite the deed, which by all appearances will operate in a manner consistent with the requirements of the department, my constituent’s request for assistance through GEERS has been rejected because the deed does not fulfil the exact requirements of the GEERS operating arrangements. For this constituent, a person of advancing years who has worked for the organisation for a considerable period of time, the system has not worked to satisfy his expectations. It certainly has not worked to satisfy mine.

While members opposite can dismiss concerns about the operation of GEERS, they cannot come in here and deny that there is an insufficient amount of protection in place for the superannuation contributions of Australian workers. The superannuation savings of Australians now amount to more than $1 trillion. By any measure, that is an impressive amount of money that has accumulated following the decision of a previous Labor government to introduce a system of compulsory superannuation contributions. Some in this place will recall, no doubt, that the coalition did not support the introduction of the superannuation guarantee. They opposed it at every step. As the value of superannuation savings continues to grow, the government’s efforts to rewrite history to claim credit for the whole system seem to be growing with it. The government would have Australians believe that they were the architects of superannuation, despite the fact that they never really believed in it—at least, not right at the beginning.

The rapid growth of superannuation savings means that we have responsibility for a significant proportion of people’s retirement income. That is something that should be protected. Those savings mean an adequate retirement income for many Australians who would otherwise not have that income to rely on. It is a credit to a good policy, but it is certainly something that has to be protected.

To understand the value of this system you need look no further than the accumulation of these savings. As I mentioned, currently there is somewhere in excess of $1 trillion in superannuation savings. Over the course of the next decade, to 2017, it has been predicted that superannuation savings of working Australians will be in the vicinity of $3 trillion, due to a threefold growth. Such a huge sum of money is worthy of some real protection but, more importantly, given the age of the Australian population, it is now more important than ever that we take measures to protect superannuation moneys that hardworking Australians have accumulated and are entitled to enjoy in their retirement years.

The government has acted to cover the unfunded liabilities of Commonwealth public servants through the Future Fund—in fact, according to the Minister for Finance, Senator Minchin, so much money is flowing into the Future Fund that unfunded liabilities are likely to be met much earlier than expected. The government has taken what would be considered a responsible step in that respect, but there remains a gap in the protection of the superannuation contributions of other working Australians. It is for this reason that I describe this bill as a good start—as a matter of fact, a great start if you are a creditor—but one which does not go far enough if you are a working Australian looking for the preservation of your superannuation entitlements. Therefore it is disappointing that the government has once again failed to adopt the plan put forward by Labor to include superannuation under GEERS and protect superannuation entitlements.

Labor has put forward a proposal which would guarantee workers’ rights in respect of superannuation entitlements. Working Australians are very conscious of the growth of their personal superannuation as they move towards planning their retirement. Following Labor’s bold decision to introduce a system of retirement savings for all working Australians, there is widespread recognition of the importance of these savings, of making sure that employers pay them and that this pool of money is protected. The compounding effect of missing out on even a small sum of superannuation can have a huge impact on the lifestyle that people can afford in retirement.

Superannuation is a statutory entitlement of employees. While members opposite tried their hardest to oppose superannuation at the outset, it is now a reality. It is a statutory entitlement and it should be protected in the same way as annual and long service leave. Accordingly, it should be afforded the same level of protection by including superannuation entitlements under the GEERS scheme.

Through this bill, the government is seeking to close the loophole that allows money to be channelled into superannuation to defeat creditors, yet it continues to resist providing protection to working Australians who lose their superannuation entitlements due to companies going into bankruptcy. This amendment has been introduced—and I support it—with a view to making sure that payments to superannuation plans to defeat creditors will be recoverable in the same way that payments or transfers to other funds, again to defeat creditors, are similarly recoverable. This should apply to protect the statutory entitlement of superannuation contributions of Australian workers. They should not have to pay the price in retirement for the fact that their former employer was able to get away with not making the superannuation payments on their behalf. Going into bankruptcy is a way of escaping entitlements to employees.

I believe the amendments before us have not gone far enough insofar as I would be looking for something in the bill that could be utilised by employees to protect their nest egg in much the same way as this bill seeks to protect the finances of creditors—and rightfully so—from the application of bankruptcy laws. While I support the provisions of this bill I think if the government took a clear look at how important superannuation is to every member of—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Werriwa makes a very tenuous tie between superannuation and this bill.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

As I say, I support the provisions of the bill. I do not believe it has gone far enough and I do not believe it has in any way sought to address the issue of the protection of superannuation contributions and retirement incomes of working Australians.

Mark Baker (Braddon, Liberal Party) Share this | Link to this | Hansard source

The primary objective of the Bankruptcy Legislation Amendment (Superannuation Contributions) Bill 2006 will allow bankruptcy trustees to recover superannuation contributions made prior to bankruptcy with the intention to defeat creditors. These amendments will apply to superannuation contributions made on or after 28 July 2006. The bill also contains amendments to facilitate recovery of void superannuation contributions by building on existing administrative recovery powers exercised by the official receiver and, where appropriate, providing the court with powers to make orders for payment by superannuation fund trustees.

More importantly for the rural community—and I include my electorate of Braddon—this bill also contains amendments designed to improve the operation of the act, particularly in relation to the treatment of rural support grants where the recipient is bankrupt or becomes bankrupt.

I support the objectives of the bill, which include: (1) providing for the recovery of superannuation contributions made with the intention to defeat creditors; (2) providing for certain rural support grants to be exempt from the property available to pay the bankrupt’s creditors; and (3) to improve the understanding and operation of the act within the legal framework.

In my previous occupation within the financial planning sector, I always encouraged and supported people to save and plan for their retirement through superannuation. Superannuation is currently and will always remain one of the most tax effective means to save for retirement. The progressive changes the Howard government has introduced to make superannuation a more valuable retirement planning tool for our ageing population has also provided the ability to place a larger amount of contributions into their fund.

The superannuation changes that the Treasurer announced in the 2006 budget represent the most significant change to Australia’s superannuation system in decades. The changes, which were welcomed right across the financial sector, will remove the complex issues that are faced by retirees, will increase retirement incomes, provide greater flexibility as to how and when superannuation can be drawn down and improve incentives for those older Australians who, due to the tremendous economy that we now experience, wish to stay in the workforce.

The changes removed the complexity of the old pre- and post-taxed and untaxed components. These were an absolute nightmare for anyone within the financial sector to deal with, and the Treasurer and the Howard government needs to be congratulated on removing these complexities. As a result of the abolishment of reasonable benefits limits and age based limits, a simple universal contribution limit will apply. People will now not be forced to draw down on their retirement savings.

The abolishment of the reasonable benefits limit and its impact on bankruptcy still provides for potential bankruptees to act with intent to defraud creditors. However, the proposed legislation will certainly act as a deterrent to those contemplating defeating their creditors. The Howard government has allowed individuals to contribute up to $1 million into their superannuation until midnight on 30 June this year, which is an excellent incentive to encourage savings for our ageing population. The addition of the term ‘out of character’ also provides for a review of such contributions and their intent in the case of bankruptees.

The benefit of this bill to creditors against unscrupulous individuals who may be going bankrupt after transferring funds to his or her superannuation during the period 28 June 2006 to 30 June 2007 will be that the transfer can now be deemed ‘out of character’ and, as such, be repealed by the official receiver.

Additionally, creditors will have protection against current practices of potential bankruptees utilising family members and protection under family law courts regarding funds that are contributed on behalf of family members. The bill will allow for such contributions to be investigated and for their intent to be reviewed and, where it is considered out of character, such funds can now be drawn back into the creditors pool.

I commend this legislation not only for its protection of creditors and for supporting the fair treatment of all sides in a bankruptcy situation but also for its potential reforms and participative systems that will be introduced throughout the industry, from legal to superannuation and financial planning, to comply with this bill. This legislation will enable superannuation trustees to work more closely with the legal-accounting fraternity with regard to the movement of contributions and the operation of superannuation funds within Australia. This will no doubt have a greater working benefit for all involved with this issue from the bankruptcy area to the Family Court arena. The balanced approach of this bill should also be commended.

Whilst superannuation contributions of a potential bankruptee are being reviewed in a fair and just manner by this bill, rural grants and assistance programs designed to support the day-to-day living of this vulnerable area of our community are protected; therefore, protecting the families and dependants of individuals against destitution and an inability to provide the absolute basics for their dependants.

Overall, on reviewing the amendments proposed in this bill, it is clear that the bill provides a clear and just method for dealing with superannuation contributions of a potential bankruptee that are diverted from creditors with the intent to defeat creditors. It will allow the trustee to recover contributions made by a person, other than the bankruptee, and to be examined as part of the possible ‘out of character’ ruling against the bankrupt. It will ensure that consideration given by the superannuation trustee to the contribution will be ignored in determining whether the contribution is recoverable by the trustee. It will allow for a fair and just review of the bankrupt’s intent through a historic review of contributions and advice provided by his or her financial adviser. It will ensure the fund is not at risk of costs and charges lost due to any payments made on behalf of the fund. It will provide safeguards against the bankrupt moving his or her superannuation funds through continual transfer of the contributions from fund to fund. It will ensure that superannuation payments have the same rights in a bankruptcy case as any other payments, thus providing a fair playing field between a creditor and a bankrupt.

The bill will ensure a level of humanity, with the protection of some rural grants and support to the bankrupt against being part of the creditors pool.

Finally, the amendments and those technical changes identified in the bill will improve the operation of the act as a whole and the ability for all parties to participate together in a more effective manner. I commend this bill to the House.

Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Link to this | Hansard source

I wish to speak tonight about those amendments contained in the Bankruptcy Legislation Amendment (Superannuation Contributions) Bill 2006 which allow bankruptcy trustees to recover superannuation contributions made before bankruptcy with the intention to defeat creditors. That part of the legislation is required because a decision was made by the High Court in Cook v Benson in 2003 which opened up the possibility that people could hide money from their creditors by putting it into superannuation before declaring themselves bankrupt. The purpose of those amendments within this bill relating to that matter gives rise to a situation where payments to superannuation plans to defeat creditors will be recoverable in the same way as other payments or transfers to defeat creditors.

It is sometimes said, and even more often believed, that in a parliamentary system the opposition opposes for the sake of opposing. I take the opportunity tonight to prove that that is not always the case. We do not oppose this legislation. It is legislation which corrects a problem in relation to people being able to declare themselves bankrupt and still maintain a very substantial amount of their assets through the contrivance of putting it into superannuation. That is not something that Labor supports. Legislation that defeats that contrivance is something that Labor supports, and that is why we support the legislation here tonight.

I want to say a couple of words about superannuation and indicate, in so doing, that I will do what I can to facilitate the passage of this legislation tonight. Superannuation is a great initiative. It is an initiative that was undertaken by the previous Labor government, opposed on many occasions by the present government. I will not go through all that tonight other than to say that our superannuation assets in this country have reached $1 trillion, which is a terrific achievement in a relatively short period of time. It is an achievement that was initiated by Labor.

Labor supports strongly the superannuation savings system in this country. In order to facilitate the passage of this legislation tonight I think I will leave my remarks there so that we can get to a point where this bill passes the chamber tonight.

Michael Keenan (Stirling, Liberal Party) Share this | Link to this | Hansard source

I also rise to support the Bankruptcy Legislation Amendment (Superannuation Contributions) Bill 2006. I note the opposition’s support for it, which is reasonable considering this is a bill that really is common sense. It is a bill that arose in response to the High Court’s decision following the judgement in the Cook v Benson case, when it was discovered that the law had the adverse effect of making it extremely difficult for bankruptcy trustees to recover superannuation contributions made by someone in the lead-up to bankruptcy.

The purpose of this legislation is quite simple: it is to stop people from getting out of paying their bankruptcy debts by putting their money into superannuation prior to the order being served. I think most of the community would expect that someone who was seeking bankruptcy protection would still make every effort they could to pay their creditors. And I believe that the community takes a very dim view of people using the law to squirrel away assets that should rightly be put before the bankruptcy trustees to pay out creditors.

The bill will amend the Bankruptcy Act 1966 so that bankruptcy trustees can recover these deceptive superannuation contributions that have been made with the specific aim of dodging creditors. As I said before, the amendments come in response to the High Court’s decision following judgements made in the Cook v Benson case, which had the adverse effect of making it extremely difficult for bankruptcy trustees to recover superannuation contributions made by someone in the lead-up to bankruptcy. This was the case even where those contributions were very clearly made with the specific intention of defeating creditors.

Because this meant that a person facing bankruptcy could transfer assets into superannuation to avoid paying creditors, the integrity of the entire bankruptcy system had been called into question. I am sure everyone would agree that this is not an appropriate way of avoiding paying what can often be very large debts, when others who cooperate and behave with integrity and honesty are penalised. You could even argue that these acts of deception could be used as a way of generating wealth through the thinly veiled guise of putting something away for retirement and then applying for bankruptcy protection. The High Court’s decision also meant that superannuation assets are treated differently from other assets that would be available to the trustee.

The amendments will apply to superannuation contributions made on or after 28 July 2006. The amendments will strike a much needed and appropriate definition of what is meant by saving for the future and what is an unscrupulous way of attempting to get out of paying debts incurred in the lead-up to bankruptcy. It is important to note that these amendments will only allow superannuation contributions to be recovered where there has been deliberate action by the bankrupt to avoid paying creditors. The new provisions will ensure superannuation contributions made with that intent are recoverable just as it is with other transfers, including property. They will apply to superannuation contributions made by the bankrupt for his or her own benefit or for the benefit of a third party.

In addition, those provisions will apply to contributions made by a third party for the bankrupt’s benefit where the bankrupt was involved in an arrangement with that third party specifically to defeat their creditors. One example of this deception is when the bankrupt enters into a salary sacrifice arrangement with their employer to build up superannuation assets in the lead-up to bankruptcy instead of building up other assets that would have been available to pay creditors. The new rules will allow the trustee to assume that superannuation contributions are made with the intention to avoid creditors where the bankrupt was insolvent at the time of making the contributions. I think the intent of my remarks is very clear and I yield the floor to the minister.

Question agreed to.

Bill read a second time.