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

The independent commission determines the status of a default fund or funds. Some current state and federal awards have one fund. Some have a number of funds. Some accept a corporate fund. In the case of CareSuper, which you have alluded to, my understanding is that CareSuper are not supporting your amendment They are arguing at the commission that they be allowed to be a default fund in a number of these awards as they are modernised—in other words, that the status quo be maintained for CareSuper. They are not arguing for your amendment.

I take heed of Senator Xenophon’s comments. I will make one other comment because I want to put this on the public record, particularly for Senators Xenophon and Fielding and the Greens. I have indicated that I would give a public commitment. This is my commitment: the government will put in place a process to examine the establishment of criteria for default funds. We are going to commence a process to undertake this work, but at the same time we will put in place a process to examine other issues that are being highlighted in our superannuation system. That includes controversies around the definition of a default investment option. That includes issues relating to investment products and their definitions. That includes lost accounts; we have to do something about lost accounts. That includes what I call conflicts of interest—the conflict between a retail fund owning a planner group and commission based selling. There are a significant range of issues that I accept are of contention in our system; therefore, I say for the public record that we will put in place a process—I have dubbed it ‘renovating a house’—to examine all these issues comprehensively.

For the time being, on this issue I have indicated to every sector of industry—the retail sector, the corporate sector, the industry fund sector—that it is status quo until we put in place a comprehensive examination of these issues. They are very complex and they are interrelated. That process will occur, and I think that, rather than trying to deal with claims about what is right or wrong with our system, is the way forward. In this context, the government’s bill maintains the status quo rather than significantly amending it; it is only a one-line amendment but it has very significant implications. Rather than trying to fix people’s particular problems and concerns here, we do it through a proper examination of the superannuation system.

I put that on the record particularly for Senators Fielding and Xenophon and the Greens. I know Senator Fielding has a keen interest in this area because of his background, and I think we need to deal with these differences of opinion in a comprehensive way across the totality of the system. If you change one element of the system it has a significant impact on the others in a whole range of disputed areas. This is a process I have put forward to a number of these different major organisations and, whilst I can give no indication as to outcomes, I think there is a generally emerging consensus that we need to have a process to look at these issues, including the issue of how you define a default fund. I strongly suggest that this is not the appropriate time to try to fix these problems that various contending parties are claiming. If the Liberals’ amendment is rejected, the status quo continues until such time as we comprehensively examine the operation of this area and all the other areas of contention in the superannuation system.