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

I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill. The memorandum was circulated in the chamber on 5 September 2006.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Minister, are you seeking leave to move those amendments together?

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

Yes, I am.

Leave granted.

I move:

(1)

Clause 2, page 2 (table item 3), omit the table item, substitute:

3. Schedule 2, items 1 to 25

Either: (a) if this Act receives the Royal Assent on 1 July in a year—the day on which this Act receives the Royal Assent; or (b) otherwise—on the 1 July that next follows the day on which this Act receives the Royal Assent.

(2)

Clause 2, page 2 (table item 5), omit the table item, substitute:

5. Schedule 2, items 28 and 29

Either: (a) if this Act receives the Royal Assent on 1 July in a year—the day on which this Act receives the Royal Assent; or (b) otherwise—on the 1 July that next follows the day on which this Act receives the Royal Assent.

Question agreed to.

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

Thank you, Madam Temporary Chairman, for taking my place there today so I can handle this bill. I wish to deal separately with the two items on sheet 4821 revised. I move:

(1)    Schedule 1, page 3 (after line 5), before item 1, insert:

1A  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.

Despite the obvious abilities of the parliamentary secretary, I am disappointed that the minister responsible for this bill is not present in the chamber. No doubt he has a good reason for that, but I am disappointed because he has an intimate knowledge and understanding of the issues at hand which I doubt the duty minister would have. This will make it difficult for the duty minister to answer the sorts of questions I intend to put to him.

In moving this amendment I must make it clear that it is my view that the government has accepted the policy. It is my view—from an interchange that Senator Sherry, on behalf of the opposition, and I, on behalf of the Democrats, have had with the minister at estimates and in previous discussions on this matter in superannuation bills—that the minister has made it clear to us that he personally wishes to advance this particular policy but that he needs to ensure that the government is able to cover off all the various issues. I will read into the record an answer which is somewhat more formal than the more encouraging remarks the minister has made by way of direct questioning. Question No. 1692 to the Minister for Finance and Administration read as follows:

Senator Allison asked the Minister for Finance and Administration, upon notice, on 11 April 2006:

With reference to the recent statements by the Prime Minister about the removal of discrimination against same-sex couples, and to the then Minister for Revenue and Assistant Treasurer, Senator Coonan’s, second reading speech on 22 June 2004 in relation to proposed interdependency provisions in Commonwealth superannuation schemes:

(1)      What was the result of the review conducted by ministers responsible for the Commonwealth superannuation schemes, to ‘ensure consistency with these interdependency amendments’.

(2)      When is it anticipated that legislation ensuring this ‘consistency’ will be introduced in the Parliament.

Senator Minchin answered, with respect to (1) and (2):

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 (PSSAP) 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 or 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. The Commonwealth Superannuation Scheme (CSS) and Public Sector Superannuation Scheme (PSS) however, 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 PSS are unfunded. This means that benefits in the CSS and 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 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 to 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 some people would qualify for a lifetime pension which they would not otherwise be entitled to receive. This could have a significant impact on the Budget. Unfunded superannuation liabilities are the Australian Government’s largest liability, currently amounting to more than $96 billion and are expected to grow to around $140 billion by 2020.

The Government has indicated that the issue of extending eligibility for death benefits in these schemes to persons in an interdependency 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.

If I can recap: it is quite clear that the interdependency relationship has been accepted into law, as defined in section 27AAB of the Income Tax Assessment Act, and that the policy of addressing this issue has been accepted by the government with respect to the minister’s, the Prime Minister’s and Senator Coonan’s previous remarks. Therefore, in shorthand, my belief is that the concern is about money: what is it going to cost? Now, if there were very few people of a gay or lesbian persuasion, money would not matter. That means that not only is this an issue of discrimination but it is actually an issue of discrimination against very large numbers of people—because why would there be a budgetary consideration if there were just one or two people disadvantaged in this way scattered through the public sector? So that is an interesting perspective in itself, because the government obviously has a view that the numbers are quite large.

My suggestion to the minister—through you, Madam Chair—is that, if the minister is finding it difficult to get the cabinet to advance this all in one go across the range of superannuation schemes which the government has control of, perhaps the best thing would be to lay out a timetable and introduce these changes on a planned and phased basis. For the purpose of that remark, I wish to indicate to the chamber that, as far as I am aware, there are eight schemes that the government can deal with on this matter. I will go through them in order of numbers—I would assume the easiest and the cheapest ones to deal with are the ones with the lowest numbers, but perhaps that is not the case. The following are the fund or scheme names and the numbers affected: governor-generals, five—whether one of our former governor-generals might fall into the category we are discussing is neither here nor there, but the fact is that the scheme does discriminate against governor-generals; federal judges, 220; Parliamentary Contributory Superannuation Scheme members, 546; Military Superannuation and Benefits Scheme members—the numbers I am giving are the estimated numbers of members as at 30 June 2005, so they are not exact—50,000; Defence Force Retirement and Death Benefits Scheme members, 63,317; Australian Government Employees Superannuation Trust members, 150,000, which as we know is the fund under which new politicians since 2004 fall; Commonwealth Superannuation Scheme members, 157,821; and Public Sector Superannuation Scheme members, 252,025. So the total number of people affected as at 30 June 2005 is an estimated 673,934.

The government is aware that certainly the Democrats—the opposition can speak for themselves—are not going to let this issue go. The government is aware it is an issue of equity which must be addressed sooner or later. I think the government needs to have a plan. I think you have had enough time, over several years, to work out a plan and to work out where you should go with this. What I am suggesting to you, with respect, through the chair, is that you consider a defined time line and a phased introduction. It would be easiest for you, obviously, to introduce it to those schemes that have the lowest numbers, in my view.

So this amendment to item 1 is to specifically remind us of our own language in this matter, to keep the government honest—and we will continue to do so, because you have accepted the policy. You have accepted the policy. So what we are on about is its implementation and when it should occur. May I make it clear and put it on the record: I certainly see no mala fides on the part of the Minister for Finance and Administration; I accept his bona fides in this matter. But this is a government matter, it is a cabinet matter, and it is about time it was resolved. It is about time that due consideration was given to public policy that discriminates against a very substantial portion of our society, and it is about time that this genuine issue was resolved. This is the 21st century; let’s get with it, folks.

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

Thanks, Senator Murray. Can I just make a couple of comments. I understand the historical perspective that Senator Murray has, and that his remarks apply more broadly than just to those in same-sex relationships. Interdependency covers a much broader range of relationships than just same-sex relationships. So I think his comments, which focused very closely on that particular sphere, perhaps need to be clarified. In fact, the government are not looking just at those in same-sex relationships; we are also looking at those in interdependency relationships—which, as I said, is a much broader issue.

I turn to Senator Murray’s comments in relation to the perspective of the minister and, of course, the government, and the information he has put into the Hansard that the government does remain committed to examining options to extend interdependency to members of Australian government schemes. The government has examined some options to further that process but, unfortunately, those options have not proved feasible. Senator Murray has already read into the Hansard an answer he received at estimates hearings which included a range of considerations that the government has been looking at in making that decision. Because the options we have canvassed at this point in time have not proved feasible, we are seeking further actuarial analysis on a much broader range of options to advance the issue of interdependency. We remain committed to doing that, as I think we are all essentially agreed.

I think it is worth clarifying that it is not just about same-sex relationships but about a much broader issue. We are looking at it in that context and we remain committed to doing so, as Senator Murray has already stated.

Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Link to this | Hansard source

On behalf of the Labor Party, I indicate that it is our intention to support this amendment proposed by Senator Murray on behalf of the Australian Democrats. We believe this is an important issue that does need to be addressed somehow, and we congratulate Senator Murray on his persistence in raising this matter time and time again, trying to get the very complex issue of interdependency dealt with in a reasonable manner.

We heard in Senator Murray’s contribution to the debate that he is proposing a very reasonable timetable to be introduced as part of his proposal. We believe this is a bit like the elephant in the room which is not being discussed. We actually need to get on with it and find some way of resolving this issue.

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

I cannot resist: as an old African I would remind you that the saying is, ‘You eat an elephant a mouthful at a time.’

Question put:

That the amendment (Senator Murray’s) be agreed to.

I move amendment (2) on sheet 4821 revised:

(2)    Schedule 1, page 3 (after line 17), after item 2, insert:

2A After section 27F

Insert:

27FA Procedures for merit selection of appointments

As the chamber is aware, well over 30 of these amendments have been moved over the last six or seven years and the message is the same every time: the government has to get with the program—as our friend Senator Vanstone likes to say—‘Get with the program, lads and ladies,’ because this issue of selecting people on merit is one being taken up all over the world in advanced democracies and our own democracy does not have a sufficiently robust system for the merit selection of appointments. In fact, recently there was another academic paper on the very issue. I forget the name of the person who wrote it but it was circulated, I think, in the democrat audit. That is not the Democrat party; that is the democrat audit section of the Australian National University—for those who are interested in these accountability matters.

I am not going to motivate this at length; the chamber has heard my arguments before. The government do not believe in appointments on merit. They believe in appointments of mates. Now and again, of course, the mates do have merit. They do not accept the argument that their processes need to be improved, so we will lose the vote and we will add one more to the list of the number of times they have opposed appointments on merit.

Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Link to this | Hansard source

I rise to indicate that Labor will be supporting this amendment. As Senator Murray has said, this is an argument that we continue to have. It is a bit like the other elephant—bite by bite and bit by bit. Across the world the consideration of good governance includes the issue of merit selection of appointments for the kinds of positions that are incorporated in this amendment. That point was made most recently, and the concern about the lack of robustness in our processes was raised by Professor Meredith Edwards of the National Institute for Governance. Labor certainly believes that this is an important principle. We should have selection on merit. As Senator Murray said, we know this will not be agreed to by the government because they continue to appoint their mates.

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

Obviously the government does not agree with the final comment made by Senator Stephens. The government’s arguments in relation to this matter are probably as well known as Senator Murray’s arguments. If we are to continue to talk about eating elephants, I hope there are a few people who are relatively hungry, because it is going to be a big job. The government’s views on this issue are very well known. The government does have in place arrangements that require a licence under the Prudential Regulation Authority and trustees have to meet a fit and proper operating standard as determined under the Superannuation Industry (Supervision) Act 1993. That standard is designed to ensure that the interests of superannuation scheme members are managed and overseen competently by honest and trustworthy individuals. So the government believes that it does have in place proper arrangements to deal with board selection appointments. Rather than prolonging the debate, I will just say that, as Senator Murray has indicated, his views are well known and I think the government’s are as well. We oppose the amendment.

Question negatived.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.