Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

I move Democrat amendment (1) on sheet 4903:

(1)    Schedule 1, page 3 (after line 16), after item 4, insert:

4A  Subsection 3(1) (after the definition of SIS Act)

Insert:

spouse, in relation to a person:

             (a)    includes another person who, although not legally married to the person, lives with the person on a bona fide domestic basis as the husband or wife of the person; and

             (b)    includes a person in an interdependency relationship as defined in section 27AAB of the Income Tax Assessment Act 1936.

Although this exists in one tranche of legislation that we have—namely, the Income Tax Assessment Act—the same definition does not exist in what is known as the SI(S) Act. The government has clearly indicated both to the Senate and elsewhere that it is minded to reduce or remove—and mostly remove, I think, is in the frame—discriminatory circumstances with respect to superannuation assets. The government has given that commitment.

In my speech in the second reading debate I outlined a commitment of the Prime Minister, given in a radio interview, regarding the issue of removing any property discrimination and other discrimination that exists against people who have same-sex relationships. I must point out that the amendment I have moved does not deal with just same-sex relationships; it deals with interdependency generally. Nevertheless, the government has not yet fulfilled its commitment with respect to these various matters, so it is my party’s intention and my intention to keep moving these amendments until the matter is resolved by government, either by amendments of their own or by acceptance of a definition which is already in effect elsewhere. The participants in this debate are well aware of this issue and have discussed it before so I do not think I need to go into much more motivation unless I am asked to, and I move the amendment accordingly.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

The Labor Party will be supporting this amendment. I do not know whether Senator Murray was present at the last estimates round when I actually asked, in some detail, what the government was doing with respect to the commitment of the previous Assistant Treasurer, Senator Coonan, and also, I understand, of the Prime Minister. Senator Minchin, the Minister for Finance and Administration, and departmental officers took the questions. What concerns me is that the previous Assistant Treasurer, Senator Coonan, gave an ironclad commitment. It has not been delivered.

I do not want to be too harshly critical of the Democrats, but I did warn them at the time when they signed up to the deal on choice of superannuation fund. Senator Murray, I recall that signing up to that was conditional on the government delivering on the removal of the discrimination against same-sex couples. Then the government announced, ‘Yes, we accept the removal of discrimination in respect of same-sex couples,’ and used the term ‘interdependent’, which actually includes a broader range of individuals. But the government has not delivered. Senator Murray, I think we are now two years on from that.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Yes.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

It is just about two years ago, and the government still drags its heels on a written commitment given by the previous Assistant Treasurer, Senator Coonan.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

On behalf of the government.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

You are right—on behalf of the government. What really concerned me at the Senate estimates hearings was that Senator Minchin denied that a commitment had been given. That was very disturbing. What we also found out at Senate estimates in February was that the government is awaiting a report from an actuarial firm—I am not sure which actuarial firm; the name does not come to mind—on the implications of the implementation of this with respect to the defined benefit funds that we are talking about here today. That is fine; I can understand them doing that. But what I cannot understand is the backsliding by Senator Minchin and the parliamentary secretary. Senator Minchin knows my views, because I reminded him about this at Senate estimates. Labor supports the amendment. It is what the government promised and has failed to deliver on over the last two years.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

The government has indicated that the issue of extending eligibility for death benefits in these schemes to persons in an independency relationship with a scheme member is being examined. However, because of the design of these schemes, a number of technical matters and also budgetary considerations need to be fully examined before any decision could be made. The issue of eligibility for death benefits is not a matter for consideration in this bill as this bill deals with an unrelated matter: the establishment of a single trustee board for the CSS, the PSS and the PSSAP. In that circumstance, the government will not be supporting the proposed amendment.

The government is committed to providing all Australian government employees with equitable and flexible superannuation arrangements and has introduced the Public Sector Superannuation Accumulation Plan to provide a fully funded accumulation scheme for new employees. Through the PSSAP the government provides for death benefits to be available to the dependant of a scheme member, which can include a person in an interdependency relationship. Members can also nominate a dependant, dependants or a legal personal representative to receive those benefits.

The PSSAP applies to new Australian government employees who commenced employment on or after 1 July 2005. Most Australian superannuation schemes are accumulation schemes, like the PSSAP, which can be readily adapted to pay death benefits to people in an interdependency relationship with no cost to the scheme. However, the CSS and the PSS are closed defined benefit schemes. They are more complex and have very prescriptive rules to determine eligibility for death benefits.

Unlike accumulation funds, benefits in the CSS and the PSS are unfunded. This means that benefits in the CSS and the PSS are funded by the government from the budget when they become payable rather than as they accrue, such as in accumulation funds. Unlike accumulation funds, benefits in the CSS and the PSS are usually provided in pension form to eligible spouses and children and are payable for life in the case of a spouse. Extending eligibility for death benefits from the CSS and the PSS to people in an interdependency relationship is likely to increase scheme costs and the government’s unfunded liabilities because these changes may mean that some people would qualify for a lifetime pension which they would not otherwise be entitled to receive. This could obviously have a significant impact on the budget.

Question negatived.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

I must say before moving the next amendment that I would appreciate it if in due course the minister could advise both the shadow minister for the opposition and my own party when the likely date for completion of the review that the minister is conducting would be so that we do not carry on chasing our tails about when these things are to occur. I move:

(2)    Schedule 1, page 10 (after line 4), after item 59, insert:

59A  Subclause 4(1) of the Schedule

Omit “shall”, substitute, “, subject to clause 4A, must”.

59B After clause 4 of the Schedule

Insert:

4A  Procedures for merit selection of appointments

        (1)    The Minister must by writing determine a code of practice, for selecting a person to be appointed by the Commonwealth or a Minister to a position under this Act, that sets out general principles on which the selections are to be made, including but not limited to:

             (a)    merit; and

             (b)    independent scrutiny of appointments; and

             (c)    probity; and

             (d)    openness and transparency.

        (2)    After determining a code of practice under subsection (1), the Minister must publish the code in the Gazette.

        (3)    Not later than every fifth anniversary after a code of practice has been determined, the Minister must review the code.

        (4)    In reviewing a code of practice, the Minister must invite the public to comment on the code.

        (5)    A code of practice determined under subsection (1) is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

This amendment concerns appointments on merit with respect to this legislation. As you know, Mr Chairman, it is an amendment that we have frequently moved and therefore I do not intend to recapitulate the arguments. People are well aware of them. I simply move the amendment. I think it is appropriate that it apply to appointments made under this legislation.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

Labor will not be supporting this amendment. I want to draw a distinction on representative trustees in a superannuation fund. My understanding is that there is no change to the representative nature of the trustees on this new board. In the case of superannuation trustees, I think it is fundamentally different. We have representative trustees, and I know there is selection of a small number of them. I think that, in the case of superannuation trustees, representative employee/employer appointments is an appropriate model. I have always strongly believed that, Senator Murray. With respect to superannuation fund trustees, I draw a distinction between that particular representative body and the representative bodies of other government organisations. So on this occasion I will not be supporting the amendment.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

The government, likewise, will not be supporting the amendment. The board provided for in this bill will be the trustee for three regulated superannuation funds. It is therefore already subject to the governance arrangements for superannuation schemes provided by the Superannuation Industry (Supervision) Act 1993. That act provides that trustees of regulated superannuation funds will need to be licensed with the Australian Prudential Regulation Authority by 1 July 2006. To be granted this licence, trustees have to meet the fit and proper operating standard determined under the SI(S) Act. The fit and proper standard is designed to ensure that the interests of the superannuation scheme members are managed and overseen competently by honest and trustworthy individuals.

Question negatived.

Bill agreed to.

SUPERANNUATION LEGISLATION AMENDMENT BILL 2004

Bill—by leave—taken as a whole.

Bill agreed to.

Bills reported without amendment; report adopted.