Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Hansard source

The government is not supporting this amendment. The proposed amendment introduces a new section into part 4 of the SI(S) Act. This part is administered by APRA. Self-managed superannuation funds would have to be excluded, as they are not managed by APRA but by the ATO; otherwise, section 6 of the SI(S) Act would also have to be amended. Section 36A(1), as proposed by the amendment, refers to a ‘private sector fund’. I am advised that a private sector fund is defined in the SI(S) Act and, broadly speaking, covers all super funds that are not public sector super funds. A ‘private sector fund’ includes self-managed superannuation funds. This amendment would therefore also need to specifically exclude self-managed superannuation funds. There are approximately 400,000 such funds which do not report to APRA.

Section 36A(1) as proposed by the amendment requires private sector funds to report within 60 days of the commencement of schedule 4. As parts 1 to 3 of the bill generally commence on 1 July 2008, particularly in the light of the amendment that Senator Hanson-Young supports, 60 days would take us to 29 August 2008, which is clearly not possible.

Section 36A(1) refers to an entity constituted by a trust deed. It is certainly possible that some funds may not be constituted by a trust deed but by governing rules; therefore the sections would not apply to them.

Section 36A(1) refers to recognising members, whether opposite-sex or same-sex, as a couple. Funds do not generally recognise couples; they provide benefits to individual members or, in the event of a member’s death, to the member’s dependants or to the member’s legal personal representative. So our advice is that funds would have difficulty complying with the proposed amendment as currently drafted.

What funds may also do is limit the dependants to whom death benefits, and in particular reversionary benefits, are paid. Dependants are defined in the SI(S) Act and will now include same-sex spouses. Whilst most funds will probably recognise the definition of spouse in the SI(S) Act, they may still restrict the payment of a reversionary pension to an opposite-sex spouse.

Section 36A(2) as proposed by the Greens amendment requires APRA to place all reports on its website. As there are currently approximately 400,000—I understand 388-odd thousand—self-managed superannuation funds, this would cause significant logistical problems for APRA. Further, while section 36A imposes obligations on both funds and on APRA, there are no sanctions for not meeting these obligations.