Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Governance of Australian Government Superannuation Schemes Legislation Amendment Bill 2015 merges ComSuper, the current administrator of the Australian Government's civilian and military defined benefit superannuation schemes, with Commonwealth Superannuation Corporation (CSC), the trustee of the Australian Government schemes.

The merger forms part of the Smaller Government agenda which aims to reduce the total number of government entities by eliminating duplication and overlap and by simplifying inefficient and complex agency structures. Ultimately this agenda is about ensuring that the Australian Government is structured and operates in a way that delivers efficient services, robust advice and value for money for taxpayers.

Consistent with our Smaller Government agenda, the merger of ComSuper with CSC will improve the efficiency of the management of Australian Government superannuation by removing duplication and overlap. It will also provide CSC with control over the administration of the Australian Government's defined benefit superannuation schemes, consistent with CSC's regulatory responsibility for this function as trustee of these schemes.

The Government's decision to merge ComSuper with CSC reflects that CSC is ComSuper's sole client for administration services.

The merger is the next step in streamlining the governance of the Australian Government's civilian and military superannuation schemes, a process commenced in 2011 when the then three trustees of the schemes were merged to form CSC.

The merger provides for continuity of the management of the Australian Government superannuation arrangements under one Commonwealth entity. CSC will continue in existence, assuming responsibility for the delivery of administration services in relation to the Australian Government's civilian and military defined benefit schemes. CSC is a corporate Commonwealth entity for the purposes of the Public Governance, Performance and Accountability Act 2013 and will remain so after the merger.

The overall effect is that CSC will be responsible for the provision of administration services in relation to the Australian Government's civilian and military superannuation schemes for which it acts as trustee.

CSC will also be responsible for the provision of administration services in relation to the proposed new Australian Defence Force superannuation arrangements when they commence in 2016.

The reform will not change the design of benefits provided by the civilian and military superannuation schemes. Additionally, the bill does not affect the delivery of services, including benefit payments, to members of the schemes.

As a result of the merger, the bill transfers the assets and most of the liabilities of ComSuper to CSC.

The administration services that CSC will perform in relation to the Australian Government's civilian and military defined benefit schemes will include:

CSC's costs of administering the Australian Government's defined benefit superannuation schemes will continue to be largely covered by administration fees collected from employer agencies. In order to maintain the current tax treatment of these fees and any monies that may be appropriated by Parliament for administration purposes, the bill amends CSC's enabling act to make CSC exempt from income tax in relation to relevant payments.

As ComSuper will cease to exist on merger, the bill repeals ComSuper's establishing act, the ComSuper Act 2011.

The bill also makes consequential amendments to Commonwealth Acts of Parliament governing the Australian Government's civilian and military superannuation schemes, to take account of the merger.

A range of transitional arrangements are included in the bill to support the implementation of the merger. Importantly, they include provisions dealing with the transfer of ComSuper staff from Australian Public Service employment to CSC employment. This transfer will be achieved through a determination of the Australian Public Service Commissioner under the Public Service Act 1999. Under these provisions, ComSuper staff will maintain their accrued entitlements to benefits on transfer to CSC employment. They will also continue to be covered by the ComSuper Enterprise Agreement at CSC, which will help to ensure that their remuneration and conditions of employment are no less favourable than those which applied to them immediately before the merger.

The bill also amends the Superannuation Act 2005 so that the cost of administering the Public Sector Superannuation Accumulation Plan (PSSAP), established by that act, will be deducted from the accounts of PSSAP members. These new arrangements will bring PSSAP into line with private sector accumulation superannuation funds where members pay for the administration of their accounts. The PSSAP administration fees will be determined by CSC.

This bill reflects the Government's commitment to eliminating duplication and overlap by simplifying inefficient and complex agency structures. It provides continuity in the management of Australian Government superannuation, including both trustee and provision of administration services, under one Commonwealth body, namely CSC. This streamlining of the governance of Australian Government superannuation will improve the efficiency and effectiveness of the arrangements.