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

The Superannuation Legislation Amendment Bill 2007 proposes amendments to Australian government civilian and military superannuation schemes contained in six related schedules. The overall purpose of the bill is to harmonise choice in super schemes for Australian government employees and to ensure that government superannuation schemes are in accord with recent amendments to the Australian superannuation system enacted via the simplified superannuation legislation.

The requirement for contributing members of the Commonwealth Superannuation Scheme to make the contributions to the CSS is removed from 1 July 2008, thereby making all member contributions voluntary and providing members with the same flexibility and incentives to contribute to superannuation available to the broader community. Eligible members of the Public Sector Superannuation Scheme will be allowed to elect to leave the PSS and join other superannuation arrangements for payment of future contributions, which will provide eligible members with the flexibility for future contributions that is already available to most of the Australian workforce.

Members of the CSS will be able to obtain early release of their funded account balances on severe financial hardship and compassionate grounds from 1 January 2008. Previously cancelled spouse pensions will be prospectively restored from 1 January 2008. An amendment ensuring entitlements to benefits in the Defence Force Retirement and Death Benefits Act 1973 scheme relating to post-retirement marriages is consistent with the treatment in civilian schemes that is proposed, and an anomaly in the treatment of the benefits payable in the act scheme upon marriage breakdown is also rectified.

The committee report into this bill proposed five key recommendations which adequately summarised key concerns arising from this bill. I note the government agrees with three of the recommendations. Committee recommendations are minor in the context of the overall benefits proposed by the bill. Australian Democrat policy has consistently sought flexibility and choice in superannuation legislation. These amendments will provide choice and greater flexibility for civilian government and military employees, finally harmonising super choice for both government and non-government employees.

The Democrat amendment, which I will move in the committee stage of this bill, aims to implement the HREOC Same-sex: same entitlements report recommendations. It is drafted in the absence of a government initiative to address those recommendations. The Democrats have followed HREOC’s suggested amendment form as closely as we can. I would be delighted were the government to substitute their own amendments for mine, but there is no sign of that moral courage yet. I will move this amendment because this issue is urgent and this unwarranted discrimination is overdue for correction. Fifty-eight federal laws were identified by HREOC as needing similar amendments. Specifically the Democrat amendment will implement the HREOC de facto relationship definition.

The amendment is in line with HREOC’s preferred approach for a dual system: one set that recognises heterosexual marital relationships and a separate second set that acknowledges same-sex relationships which are non-marital. The Australian Democrats propose this amendment which will remove unnecessary sexual preference discrimination. If the government decides not to support the Democrat amendment, it will be because it does not support the removal of clauses in superannuation legislation that discriminate on the basis of sexual preference. In other words, the coalition would be continuing to uphold homophobic laws. Given the strong cross-party support for ending unjust discrimination including from many, many members of the cabinet and the coalition parties, this would be a very sad and wrongful outcome. HREOC has identified these particular acts as needing amendment to end this unjust discrimination. From page 380 of the HREOCSame-sex: same entitlements report, I quote the following points as discrimination under superannuation laws:

• A federal government employee’s surviving same-sex partner cannot access direct death benefits (lump sum or reversionary pension) available to a surviving opposite-sex partner (unless the employee joined the public service after 1 July 2005).
• The surviving child of a lesbian co-mother or gay co-father who was a federal government employee will not usually qualify for direct death benefits (lump sum or reversionary pension) available to the child of a birth mother or birth father.
• It is harder for a surviving same-sex partner to qualify for death benefits in private superannuation schemes (as a person in an ‘interdependency relationship’) than for a surviving opposite-sex partner (as a ‘spouse’).
• A surviving same-sex partner cannot usually qualify for a reversionary pension in a private superannuation scheme, which is available to an opposite-sex partner.
• It is harder for a surviving same-sex partner to access death benefits from a retirement savings account (as a person in an ‘interdependency relationship’) than for a surviving opposite-sex partner.
• It is harder for a surviving same-sex partner to access death benefits tax concessions than for a surviving opposite-sex partner.
• A same-sex partner cannot access the death benefits anti-detriment payment available to an opposite-sex partner.
• A same-sex partner cannot engage in superannuation contributions splitting and the associated tax advantages available to an opposite-sex partner.
• A same-sex partner cannot access the superannuation spouse tax offset available to an opposite-sex partner.
• A surviving same-sex partner of a federal judge cannot access the reversionary pension available to a surviving opposite-sex partner.
• A surviving same-sex partner of a Governor-General cannot access the allowance available to a surviving opposite-sex partner.

Chapter 13 on superannuation provides more detail about these and other superannuation entitlements.

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

The Superannuation Legislation Amendment Bill 2007 makes a number of enhancements to the Australian government civilian and military superannuation schemes. The bill removes, from 1 July 2008, the requirement for contributory members of the Commonwealth Superannuation Scheme, the CSS, to make member contributions to the scheme. As a result, member contributions will become voluntary. This will provide members with the same flexibility and incentives to contribute to superannuation that are available to the broader community. The bill also allows, from 1 July 2008, eligible members of the PSS to elect to leave the PSS and join another superannuation arrangement for payment of future contributions. A member’s eligibility to join another superannuation arrangement will be determined by the choice of arrangements that their employer has in place.

From I July 2008, the bill will enable members of the CSS to obtain early release of their funded account balances on severe financial hardship and compassionate grounds to the extent allowed under the superannuation regulatory framework. The bill will also facilitate from 1 January 2008 the prospective restoration of pensions for persons whose spouse pensions, provided under certain closed Australian government civilian and military superannuation schemes, were cancelled upon remarriage. Upon valid application, spouse pensions cancelled on remarriage—prior to 1976 in the civilian scheme and 1977 in the military scheme—will be prospectively reinstated. Changes to the CSS as a consequence of the government’s Better Super reforms are also included in the bill.

The main amendment will ensure the continued payment of employer productivity contributions where a member has not provided their tax file number. This is consistent with the arrangements in the broader community where employer contributions would still be payable even though the member has not provided their tax file number. The other amendments are technical and take account of the payment of amounts from the CSS fund in relation to release authorities issued by the Commissioner of Taxation to reflect the changed superannuation terminology. The bill also ensures that entitlement to benefits in the military superannuation schemes relating to post-retirement marriages is consistent with treatment in the civilian schemes. The bill also addresses an anomaly in the family law provisions of the Defence Force Retirement and Death Benefits Act 1973 to allow the family law orders to be applied as intended.

The bill was referred to the Senate Standing Committee on Finance and Public Administration for inquiry. The committee made five recommendations. Recommendations 1 and 2 required the government to instruct the trustee of the scheme, the Australian Reward Investment Alliance, in relation to providing information to members of the Public Sector Superannuation Scheme about the implications of reducing member contributions to zero and promoting the changes that enable spouse pensions that were cancelled upon remarriage to be restored. The government agreed in principle with both recommendations; however, the government could not agree with the exact wording of the recommendations as the legislative framework established under the Superannuation Industry (Supervision) Act 1993 does not permit the government to instruct the trustee of a regulated superannuation scheme.

The government acknowledged the intention of recommendations 3 and 4 that individuals not be financially disadvantaged by the commencement of policies in the bill. However, the government is concerned that providing for the retrospective effect of these policies may have unintended detrimental effects on individuals. The government considers that the broad desired outcome can be achieved effectively through alternative mechanisms. The government agrees with recommendation 5 that the bill pass the Senate. I also indicate to Senator Murray that the government will not be supporting his amendment. I acknowledge his comments on the overall perspective in relation to that amendment. I can assure him that there is work being done on progressing that, but at this point in time we are not in a position to support the amendment.

Question agreed to.

Bill read a second time.