Sandy Macdonald (NSW, National Party, Parliamentary Secretary to the Minister for Defence) Share this | Link to 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—

PARLIAMENTARY SUPERANNUATION AMENDMENT BILL 2006

The Parliamentary Superannuation Amendment Bill 2006 proposes amendments to the Parliamentary Superannuation Act 2004 to adjust the level of superannuation for Members of Parliament elected at the 2004 Federal election and subsequently.

In 2004 the Government closed the unfunded defined benefit scheme for parliamentarians, the Parliamentary Contributory Superannuation Scheme. New Members of Parliament elected at the 2004 Federal election and subsequently receive superannuation in accordance with the Parliamentary Superannuation Act 2004. That Act provides for a fully funded accumulation arrangement, including a Government superannuation contribution of 9 per cent of parliamentary salary.

In 2005 the Government made similar changes to the superannuation arrangements for Commonwealth public servants. The Public Sector Superannuation Scheme, a largely unfunded defined benefit scheme, was replaced with a fully funded accumulation scheme, the Public Sector Superannuation Accumulation Plan. That scheme requires an employer superannuation contribution of 15.4 per cent of superannuation salary.

This bill will amend the Parliamentary Superannuation Act 2004 to increase the Government superannuation contribution for Members of Parliament receiving superannuation in accordance with that Act from 9 to 15.4 per cent.

This is in line with the Prime Minister’s announcement of 7 September 2006 that the Government would introduce legislation to adjust the level of superannuation for parliamentarians elected at the 2004 election and subsequently so that it is the same as that paid to Commonwealth public servants.

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

The Senate is considering the Parliamentary Superannuation Amendment Bill 2006. The bill proposes amendments to the Parliamentary Superannuation Act 2004, which includes superannuation arrangements for the members of parliament who were elected at the 2004 general election and subsequently. It does not apply to members elected prior to the 2004 general election. The 2004 act, in respect of the members whom it covers, provides that a general contribution of nine per cent of parliamentary salaries is payable to a complying superannuation fund other than a self-managed fund or a retirement savings account chosen by the member or, where the member does not make a fund selection, to a default fund declared by the Minister for Finance and Administration. The amendments included in the bill increase the superannuation contributions payable under the 2004 act from nine per cent of parliamentary salaries to 15.4 per cent of parliamentary salaries. The increase in the contribution rate will apply to the contributions payable after the act which results from this bill receives royal assent.

The amendments proposed in the bill give effect to the Prime Minister’s announcement on 7 September that the government would introduce legislation to adjust the level of superannuation for parliamentarians elected at the 2004 election and subsequently so that it is the same as that paid to Commonwealth public servants—and I want to emphasise that; it is the same as that paid to Commonwealth public servants—that is, 15.4 per cent. The cost of the measure has been estimated to be $200,000 for 2006-07, $500,000 for 2007-08, $700,000 for each of the next two financial years, and $900,000 for the 2010-11 financial year. The cost is due to the increase in the expense of funding an additional 6.4 per cent in government superannuation contributions.

To reflect to a greater degree on decisions made in respect of this bill, let me make reference to some correspondence from the Remuneration Tribunal to the parliamentary whips of the respective parties in this and the other place. It notes that the superannuation arrangements introduced in 2004 for new senators and members entering federal parliament for the first time were a considerable departure from the previous scheme, the Parliamentary Contributory Superannuation Scheme. However, such changes are not unique to federal parliamentarians. Whilst it is difficult to obtain precise figures, what are known as defined benefit funds, covering both the public and private sector in this country, over the last 15 years have almost all been shut down. That shutdown is invariably done by way of a date from which new members are not able to enter the defined benefit funds. There are only very few defined benefit funds that are still open funds in this country. Overwhelmingly they have been shut down.

In this context I do want to say that some of the media reporting of the week in which the Prime Minister made his announcement was inaccurate. Some of the media reports described the Prime Minister’s announcement as restoring the position that existed up until 2004. That is simply not correct. It is simply not correct for some in the media to claim that. The defined benefit fund that was shut for parliamentarians in 2004 had an average contribution level from the employer of around 50 per cent. It varied, but there was about a 50 per cent employer contribution. So 50 per cent is clearly not the same as 15.4 per cent. It did also, by the way, have a compulsory employee contribution—in this case for the members of parliament—of 11 per cent for anyone who had been here for 18 years or less.

Accumulation schemes have been introduced in all state parliaments for almost every category of employees who were in previous defined benefit schemes which have been closed to members. It is not easy to get figures—in fact I cannot get any accurate figures about the number of employees in closed defined benefit funds. I would think it would be approximately 10 per cent of the workforce or about one million Australians. So, again, it is not unique for new employees to work side by side with employees who are in an old, closed and more generous defined benefit scheme. That is not unique in Australia. That is not unique to parliamentarians and it is certainly not unique to the public or the private sector.

Until 1 July 2005, new employees entering the Australian Public Service joined the Public Sector Superannuation Scheme defined benefit plan; since that date, they have joined the PSS Accumulation Plan, which provides fully funded accumulation benefits based on an employer contribution of 15.4 per cent of ordinary time earnings. I did some research last night. It is not easy to get precise figures but, according to independent research organisation Rainmaker, the average level of contributions to superannuation in Australia is running at between 15 and 15.5 per cent. It is not easy to get figures, but the average level of employer contribution over and above the statutory nine per cent minimum is running at between two and three per cent. It is not easy to get a breakdown of that but, certainly for employees on above-average weekly earnings, the average employer contribution is running at three per cent or better—and that is up to individual employers.

The average level of employer contribution, in whatever form, is running at between two and three per cent, hence the figure of 15 to 15.5 per cent. As I said, there are no published statistics on that, but we do have data from Rainmaker; and a speech on superannuation was made to the Sydney Colloquium of Superannuation Researchers by an officer of the Treasury, and that gave some analysis—admittedly, not of the entire sector—of a survey carried out in this area. So the proposal to increase the contribution to 15.4 per cent is not unique to members of parliament.

The tribunal notes that the contribution rate matches the notional employer contribution rate under the superseded Public Sector Superannuation Scheme defined benefit plan. As I have said, it is, therefore, not unique or unusual that different schemes should have contemporaneous application, with membership differentiated on the basis of the date of commencing employment or some other factor. The tribunal goes on to say that, in deciding the old scheme should be closed to new members, it has been conscious that a fully funded accumulation scheme should be introduced for new members. The parliament also decided that the employer contribution should be nine per cent of a member’s parliamentary allowance and any additional salary received as a result of the member holding a parliamentary office.

The tribunal notes that the Department of Finance and Administration, in its submission to the 2004 Senate Finance and Public Administration Legislation Committee inquiry into the Parliamentary Superannuation Bill 2004 and the Parliamentary Superannuation and Other Entitlements Legislation Amendment Bill 2004, drew attention to the fact that, while contributions at a rate of nine per cent, based on salary alone, would ensure the same superannuation base for the old scheme and the then proposed accumulation scheme, contributions at that rate and on that basis would provide most new members with superannuation contributions that were less than the contribution that an employer would be required to provide in accordance with the superannuation guarantee legislation, based on ordinary time earnings.

I think it is important to emphasise this point: the definition of base salary for the purposes of the superannuation guarantee—the nine per cent—would, in the non-parliamentary sense, include the electorate allowance. That is excluded from the notional base in respect of the current nine per cent contribution range; whereas it is included in other private sector and public sector superannuation funds as part of the notional contribution base. So that is an added argument for the legislation to increase the effective employer contribution above nine per cent.

The tribunal considers that, as the accumulation scheme made a complete break with the past, there are sound arguments to support placing the employer contribution to the accumulation scheme on a footing which is wholly consistent with that anticipated by the superannuation guarantee legislation. This would entail taking a member’s electorate allowance into account as a component of ordinary time earnings—but that is not what we are considering here today. The tribunal goes on to say that its fundamental role is to determine or advise on remuneration for officers in the federal public sector. It notes that remuneration in the public sector tends to be fixed at rates that are materially less than the levels applying to jobs of comparable responsibility in the private sector. The concept of tenure, once perceived as a counterbalance to the lower levels of remuneration in the public sector, is no longer relevant to senior public sector officers and, indeed, it has never been relevant to parliamentarians.

The Senate Select Committee on Superannuation observed in its 25th report—indeed, I think I was its deputy chair when this report was prepared—that there is adequate evidence that parliamentary remuneration, particularly at ministerial level, lags well behind what may be expected for similar levels of responsibility in the private sector and in some public sector positions. In the tribunal’s view, this observation had considerable weight. The tribunal endorsed the Senate select committee’s view that:

... in the interests of representative government, it is desirable that a wide range of people undertake parliamentary service. While success in business or the professions, with its attendant higher remuneration, is no guarantee of the quality of a parliamentary candidate, it is undesirable that conditions of service in the parliament be so as to deter such persons.

If the superannuation portion of the parliamentary remuneration is substantially reduced without compensation elsewhere in the remuneration package, it is possible that such a deterrent may become substantial.

Apart from the level of remuneration, parliamentarians’ entitlements share other significant attributes with the public sector. Parliamentarians’ entitlements are subject to detailed specifications and prescriptive administrative guidelines, and they lack flexibility. Indeed, it can be said that in this regard the remuneration of parliamentarians generally lags behind that of the public sector. The base salary of parliamentarians has been linked for a considerable period directly to one point in the federal public sector salary structure, and this continues to be the case. In reaching its decision on the appropriate contribution for the new parliamentary accumulation superannuation scheme, the parliament took a broad view of an appropriate community standard and accorded less weight to considerations arising from the overall balance of parliamentarians’ remuneration and longstanding affinities with the federal public sector.

In the conclusion to its report on its 2004 inquiry, the Senate Finance and Public Administration Legislation Committee referred to the 15.4 per cent employer contribution then proposed to apply to the PSS Accumulation Plan. It stated that it believed there is merit in considering setting the employer contribution rate for the proposed parliamentary superannuation at a comparable level. In the tribunal’s view, the committee, in drawing this conclusion, did strike the appropriate balance.

There has been some public criticism of this change. As I have referred to earlier, I think there has been some inaccurate reporting in the media. Of course, the often stated concern by some in the community that there should be no increase to MPs’ entitlements in any way, shape or form is often a popular position for some to advocate. But I would draw attention in this debate to the fact that, as a country, Australia is, comparatively, almost totally corruption free. That is a good thing for our society and for our body politic. The importance of that cannot be overstated or rated too highly. One of the reasons for this—it is not the only reason—is that a significant number of MPs in this country enjoy a measure of financial security with respect to superannuation.

The vast majority of colleagues on both sides of the Senate are not in the position of being able to personally financially benefit when they leave this place as a consequence of their financial career. Indeed, they make considerable sacrifices—for many, not just financial but with respect to hours of work and demands on their families, particularly their spouses and children.

The second area we ought to reflect on is that superannuation is one element of MPs’ pay and conditions of service, which in turn is relevant to the issue of candidate quality. We have a situation in which ministers, parliamentary secretaries, committee chairs and the like give instructions to public servants who, in some cases, are earning two or three times what they are. So it is a little perverse. That would not be tolerated in the private sector. Certainly there are senators here—Senator Murray, for instance—who appear before parliamentary committees and subject parliamentarians to varying degrees of scrutiny, some would argue to a grilling at times. Yet, in many cases, we earn considerably less than those persons we are scrutinising.

In an ideal world, there would be a limitless supply of public-spirited individuals willing to put themselves forward for elected office without any regard to the impact on their personal finances, life and circumstances. However, it is not an ideal world. There are issues that need to be taken into consideration when entering public life and in looking at the impact of politics in general. There is a strong argument that we do, to an extent, ensure that the overall remuneration attracts talent and ability so that people will offer themselves for parliamentary office. In many cases in parliamentary life, remuneration is considerably lower; there is a greater workload, a greater impact on family life and general wear and tear.

The Labor opposition supports the bill before the parliament. We believe that the appropriate balance has been struck, taking into account the expectations in the community of a reasonable level of superannuation contribution, particularly when compared to the general public sector level of 15.4 per cent. In this case a conclusion based on comparison with respect to the general public sector is appropriate.

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

The Parliamentary Superannuation Amendment Bill 2006 seeks to increase the contribution of the government—for the purposes of this legislation, the employer—to a member’s or senator’s superannuation account from the present nine per cent to 15.4 per cent. This will apply to all members and senators elected from 2004 onwards. It will be 15.4 per cent of the sum of: the amount of parliamentary allowance to which the person is entitled in the month; the amount of any salary to which the member is entitled because he or she is or was a minister of state for some or all of the month; and, the amount, if any, of allowance by way of salary to which the member is entitled because he or she was an office holder for some or all of the month.

The bill computes a four-year cost to revenue of $3 million, so it is not exactly a vast sum of money that is at issue here. But, of course, this matter has public interest because of the way in which the public and the media attend to issues of parliamentary wages and conditions of service. As far as I understand it, the principal rationale behind this bill comes from growing bipartisan disquiet—I use the word ‘bipartisan’ as opposed to ‘cross-party’, which I usually prefer—among the 22 members of the House and 17 senators who came into parliament at or after the 2004 election, and that disquiet has been supported by most of their colleagues. Those MPs and senators think it inequitable that there is one set of arrangements for some members of parliament and a different, lower set for others. As the shadow minister quite rightly points out, that is not uncommon in the Australian community; but, in general, if the difference between those under previous conditions and those under new conditions is wide, it does create agitation and irritation.

We all recognise that many in the media and in the public oppose in principle increases of any kind in parliamentary entitlements. Others who focus on superannuation will argue that politicians’ retirement benefits should be at the minimum employer contributions level applying in the general community, which is nine per cent, rather than the public service community contributions level of 15.4 per cent. Of course, once again, I should point out that there are many who are not public servants who in fact enjoy schemes at contribution levels in excess of nine per cent. Nine per cent is the minimum contribution required.

It should be emphasised—and it is, again, a point made by the shadow minister—that the new 15.4 per cent scheme, while better than the nine per cent minimum employer contributions level scheme, is still inferior in total to the old Parliamentary Contributory Superannuation Scheme, which applies to all senators and members elected prior to 2004. If the proposed arrangements are passed by the Senate, the difference will still be that the Commonwealth’s notional contribution to those elected before 2004 will remain about 70 per cent of a parliamentarian’s income in total.

Many in the public—perhaps the majority, from my experience—believe that politicians are overpaid through perks, fringe benefits and superannuation entitlements. Their view as expounded through surveys does not seem to have altered at all for the better since the community super measure of nine per cent was applied to post-2004 federal politicians. You would think, if you had acted to get rid of a burr under the saddle of public opinion, you might see a positive response—but I am afraid not. As those changes have not resulted in a better public opinion, and public distrust and cynicism remain at what are perceived as the double standards of politicians, many federal politicians I know assert that there is no point in ever trying to satisfy that sort of opinion because it cannot be satisfied—and neither is there much danger in introducing a marginally better or more generous scheme such as we are debating here. In other words, those politicians feel that they are damned whatever they do, so why worry? Perhaps that is going a little too far, because you must obviously pay attention to general public opinion. Nevertheless, it is clear to me that a slightly more generous parliamentary superannuation scheme, at a 15.4 per cent employer contribution, than that for a population as a whole at a nine per cent employer contribution does and will attract criticism, and I note that some of those opposed to this in this chamber and in the House have that very view.

The Democrats themselves were unashamedly opposed to the generous scheme that all parliamentarians were on, feeling that it was far too generous. In 1996, for instance, we won a reference to the Senate Select Committee on Superannuation. The unanimous conclusion of this committee, which reported in 1997, was:

The Committee considers that change to the Parliamentary Contributory Superannuation Scheme is desirable. The scheme is now out of step with superannuation practice in the wider community. There is convincing evidence that it is excessively generous to a small group of retiring parliamentarians.

The fact is that that committee recommendation has been acted upon by the government. The new scheme is now in line with the general community standard for public sector employees, and there are vast numbers of them. In fact, the current arrangements are that either nine per cent of a member’s or a senator’s parliamentary income per year is paid into a superannuation fund of their choice or, if the member or senator does not choose a particular fund, the payments are made into the Australian Government Employees Superannuation Trust, which, of course, is the same as applies to the people who work for me and the people who work throughout this parliamentary building overall.

In the bad old days of the excessively generous scheme, the Democrats did move amendments in the Senate to reduce the generosity of the Parliamentary Contributory Superannuation Scheme, and those were rejected at the time. But in mid-2004, under pressure from Mr Latham, the then leader of the Labor Party, a change was made and superannuation benefits for parliamentarians were considerably scaled down to the scheme that currently applies. I want to emphasise that the Democrats, throughout the period when the nine per cent rule was being introduced for the general community by Labor—and everyone is aware that that was introduced on a stepped and graded basis—very strongly supported the introduction of a compulsory employer superannuation contribution. But we supported it as a minimum, not as a maximum.

I have heard, amongst many others, former Prime Minister Paul Keating argue that the nine per cent needs to be increased. Some people argue that it should be increased by a greater contribution by employees—in other words, nine per cent from the employer and a percentage from the employees—and other people argue that it should be lifted by employers. But I stress that much of the specialist and expert opinion on matters of superannuation does regard nine per cent as too low. Certainly my own party regards it as a minimum.

On the nature of this bill, we say that the old scheme—the unfunded defined benefit scheme where employee contributions were a fixed percentage of 11.5 per cent of salary—is but a small contribution towards the pension’s cost. The untaxed benefits paid from this fund are generous and produce a high fixed retirement salary which, as I understand it, can lift to 75 per cent of the leaving salary for those who have very long service in the parliament. The new scheme for post-2004 parliamentarians is nine per cent of salary at present, and this bill will raise it to 15.4 per cent. It is important to note that the retirement benefits depend on the accumulation over time, and contributions earnings are subject—at present at least—to the superannuation fund income tax at the nominal rate of 15 per cent. It is a markedly less generous scheme. The question is whether we make a markedly less generous scheme a little more generous or not.

There are two areas I want to briefly cover off again. Members familiar with my views and my party’s views in this area will recognise that we have campaigned over many years for a much more holistic and work-value-oriented examination of federal members’ and senators’ salaries and, indeed, of ministers’ salaries. I repeat again my view that people like the Prime Minister and the Treasurer are grossly underpaid for the work that they undertake—by comparison with the leaders of other countries rather than the more common comparison with executives of companies.

I and my party are of the strong view that the Remuneration Tribunal does need to look at a parliamentarian’s salary package as a whole, at what they need to do their job as a whole and at the retirement package as a whole. That retirement package is what we are dealing with here, in isolation. But of course there are other elements to a retirement package, such as retirement travel benefits—including entitlements available under the Life Gold Pass which, frankly, I and my party argue should be done away with. There is no merit in the Life Gold Pass perk in our view.

Coming to the bill, our view is that the change is not unreasonable, since this bill and these proposals are consistent with those of the public service as a whole. We recognise that it is politically popular to attack politicians’ conditions of service. We also recognise that some people have a genuine view that politicians are very well paid and should not get any further advance in their conditions.

In view of the Democrats’ past positions, many might think we would oppose this bill. But of course we opposed the former scheme, which was excessively generous. We do not regard a 15.4 per cent employer contribution scheme, which accumulates over time and where the final pension is dependent on that accumulation over time, as excessively generous. I would be interested to see, for senators who are not re-elected or who retire after six years’ service—and I think we are only in a position really where they are probably not going to be re-elected—what the effective benefit to them of their superannuation contributions will be. I suspect it will be very low, as it will be for members. It would be quite interesting if the government had those figures. The Australian Democrats will be supporting this bill.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The Greens will not be supporting the Parliamentary Superannuation Amendment Bill 2006, although I have some support for the arguments that Senator Murray has just been putting. If we were pursuing legislation which was to give Australians in the workplace generally a 15 per cent contribution from their employers to their superannuation, we would be very comfortable with this legislation. But we are not dealing with that. We are dealing with a rise in the top-up coming from taxpayers to the superannuation scheme of people elected to this parliament after 2004 from nine per cent to 15 per cent.

There are two things I need to make clear. The Greens have always and will consistently oppose the 69 per cent top-up for members of parliament elected before 2004. We think that is—and I think the whole body politic made the changes two or three years ago because it was—quite clearly absurd and outrageous and needing to be drawn into line. After action by Mark Latham, the then leader of the Labor Party, for a nine per cent top-up—which was consistent with that for the rest of Australian workplaces—the Prime Minister, in the run to the last election, made it very clear to Australian voters that he thought nine per cent was a good scheme. I am quoting the Prime Minister in using the word ‘good’.

This is effectively a broken promise because the Prime Minister is now, without reference to the electorate, almost doubling the contribution coming from the electorate to the scheme of new MPs. I would be taking a very different view to this again if all members of parliament, including those elected before 2004, myself included, were to be reduced to a 15 per cent or a nine per cent top-up. But we are not dealing with that. There has been restiveness within the government’s ranks, particularly among new members, about the inexcusable disparity in the two schemes and, to settle that down a bit, we are now getting a 15 per cent rate through this legislation.

I believe the process is wrong. It is unfair and it is not honest; it is not what the electorate expected in 2004. If this were being put to the electorate next year, when the Prime Minister next went to election, that would be a different matter. Far from that, the bill was brought into this place on the last day of sitting and the cut-off was abolished this morning, by vote of the Senate. We are debating this this afternoon and the bill will presumably go through today—no committee, no public input, none of the usual consideration, but a bolt to get this legislation through.

Let us look at the need to amend the Commonwealth Superannuation Scheme and the Defence superannuation scheme so that same-sex couples get a proper benefit from their superannuation scheme. There has been an anomaly which has prejudiced thousands of Australians and continues to do so. It would be fixed by a piece of legislation brought in here by Senator Spindler, I think, in 1995 and which the Senate was dealing with last Thursday afternoon, 11 years down the line.

Here is a gross inequity for thousands of members of the public, and the government has effectively talked it out. It has done nothing about it. We have had 11 years to fix a real injustice in the Commonwealth superannuation schemes—there are actually three of them—with Mr Howard, effectively, blocking that all the way down the line. But, when it comes to a little bit of restiveness among his own backbench, he can get this piece of legislation in here, knock off the proper process for an inquiry about it and get it in the Senate all within 36 hours—11 years with no action on an injustice to thousands of Australians to this within 36 hours.

Amanda Vanstone (SA, Liberal Party, Minister for Immigration and Multicultural Affairs) Share this | Link to this | Hansard source

You’re not quite right. You should read some of Senator Minchin’s press releases. You’re not telling the whole story.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Senator, your turn will arrive—and Senator Minchin has arrived. This matter has been flagged. There has been a very small amount of debate—I am talking about the time given to this parliament. The process, I repeat, is wrong. Let me tell you how else it is wrong. The staff of members of parliament have been trying to get some improved income—I am talking about everybody’s staff here—for months. In fact, it goes back a lot further than that. The government has the ability to ensure that they do get a fair deal. But, instead of that, as I understand it, those negotiations have gone nowhere. There is no agreement. I think that they are underpaid and their conditions are way short of those that we enjoy as members of parliament. I might add that it is a privilege to be a member of parliament and I think we are paid well.

Surely, if we can respond so rapidly to an aggrieved new tranche of MPs, something can be done for those hundreds of staff members who work so hard for us and who deserve a better deal than they are getting. And, if you go a little further out into the community, under the new industrial relations legislation, as I understand the government’s promise, the poorest people in this country ought to have had a significant pay increase by now. But that has not happened, either.

Just a few weeks ago we passed a seven per cent pay increase for members of parliament, but the lowest paid workers in this country are still waiting for a three per cent increase. There is an unfairness in this. It is not a fair go at all. We need to look after the pay and conditions of members of parliament, but we need to be fair about it and not put ourselves in a situation of precedence over the Australians we represent, who are effectively dependent on us to give them a fair go. This legislation is not doing that.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I regret that I was not present for all contributions on the second reading debate, except the last part of Senator Brown’s contribution. As I understand it, the Parliamentary Superannuation Amendment Bill 2006 does have the support of the Labor Party and the Democrats, and we are grateful for that, but I understand from Senator Brown’s remarks that he does not share that support. As the minister responsible for introducing the new Public Sector Superannuation Accumulation Plan and striking the contribution rate for that at 15.4 per cent, based on the actuarial evidence that that is the rate required to ensure maintenance of equivalent conditions—about which I much appreciated the cooperation of the Public Service Association—and having now introduced similar accumulation schemes for new members of parliament, I think it is appropriate in the milieu in which we work that we as the notional employer should acknowledge our new members of parliament and those to come. And in all fairness, to quote Senator Brown, the contribution we make to those members of parliament should be the same as that struck for the nation’s public servants.

We do think that is fair and appropriate. Of course, in this country it is the fact that the guaranteed minimum level of superannuation contribution payable by employers is nine per cent. Any employer is free of course to make a contribution greater than that. They must by law pay only nine per cent, but they can pay more than that. We as the employer of public servants have deemed that in our new accumulation scheme our rate will be 15.4 per cent. We think it makes a lot of sense now, in the light of the experience with the new accumulation scheme, for new members of parliament to move, sensibly, to a 15.4 per cent rate. That will go some way towards reducing the situation that was always going to be difficult of having members and senators working alongside each other on different remuneration packages. That is never easy but inevitable in making a change of this kind and without—as we never would have—terminating the arrangements for existing members of parliament. At some point there will be no members of parliament in the existing defined benefit scheme and everybody will be in the new scheme. But that day is yet to come. In the meantime, we think it appropriate to reduce the inequity between existing members and new members, as well as acknowledging the disparity between new members of parliament and new public servants. I think in all fairness this is a sensible measure. There are always people who will take opportunistic advantage of it. I am disappointed with Senator Brown’s contribution, but I do appreciate the support of others in the chamber.

Question agreed to.

Bill read a second time.