Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

I thank Senator Polley, who has always taken a keen interest in issues that affect the retired community in my home state of Tasmania. The Rudd government is very keenly aware of the problems that have flowed as a consequence of the world financial and economic crisis for approximately 950,000 retirees. We have moved quickly to provide a range of relief, which I will touch on. Many superannuants have expressed concern about the depletion of their capital as a result of the volatile financial markets that have flowed from the global financial crisis. As I am sure most senators would be aware, Australian superannuation funds had a negative return of minus 19.6 in the last calendar year, and that translates into a sharp reduction in capital for Australia’s retirees in most circumstances. Retirees asked the government for help in the form of relief from what is known as the minimum draw down rules for account based pensions.

The Rudd government responded quickly and decisively. It announced on 18 February that minimum pension drawdown requirements would be halved for this financial year. I can advise today that the executive council last Friday approved the regulations to enact these changes to the 2008-09 financial year. This means that superannuation funds can act on members’ instructions to suspend payments for the rest of this financial year. The measure responds to very real community concern. I have personally had hundreds of letters, emails and representations.

The change means that self-funded retirees will avoid having to sell further investment assets and realise losses in a depressed market. The temporary relief will also address the concern that the minimum drawdown requirement was set based on asset values as at 1 July 2008. Clearly, at that time equity values were higher. For those people who have already taken half the current minimum payment for 2008-09, the annual nature of the minimum payment rules means that a further payment— (Time expired)