Helen Coonan (NSW, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

I rise to support the Temporary Residents’ Superannuation Legislation Amendment Bill 2008 and the Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2008 as they are important, much needed reforms to the way that superannuation accumulated by temporary residents is treated when they leave the country. The purpose of the first bill, the Temporary Residents’ Superannuation Legislation Amendment Bill, is to require superannuation funds to pay the unclaimed superannuation of departed temporary residents to the Tax Office. The purpose of the second, related bill, the Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill, is to enable departed temporary residents to claim their superannuation benefits through the existing departing Australia superannuation payment process before it becomes unclaimed. These bills are necessary because of the increasing number of unclaimed superannuation accounts from departed temporary residents, including backpackers and other temporary residents.

According to the Australian Taxation Office’s 2006-07 annual report, the number of unclaimed or lost superannuation accounts is over 6 million, equating to over $12 billion remaining unclaimed. Whilst compulsory superannuation has served workers in Australia very well, one of the downsides has been that because of the complexity of the way the system operates a number of people have lost money that they have legitimately earned. Whilst this money is still available to them if they come back to claim it, it is often the case that they do not know about it, are simply unsure about how to claim it or, indeed, are unwilling to claim it because the amount of administrative time spent chasing an often small amount of money from overseas is just not worth it.

It was the previous Howard coalition government that had the foresight and wisdom to seek to change the legislation to clean up the system and stop these problems from occurring. The then coalition government announced in the 2007-08 Mid-Year Economic and Fiscal Outlook that these reforms would be implemented by 1 July 2008. However, the legislation did not pass because of the federal election. The Rudd government continued with this legislation but deferred its commencement to allow for more time for consultation. The coalition will be supporting this legislation because it was initially our proposal last year, and we welcome this legislation’s improvement to the current arrangements.

I will now go briefly to the specifics of the bills. When these bills come into force, superannuation funds will be required to pay to the Taxation Office any unclaimed superannuation balances of any temporary residents who have not claimed their benefit within six months of leaving Australia. Superannuation is currently concessionally taxed because of the acceptance of the principle that retirement savings are a public good that should be encouraged. Under current arrangements, when a temporary resident leaves Australia they can apply for their superannuation balance to be paid as part of a departing Australia superannuation payment, or DASP. Departing Australia superannuation payments attract a 30 per cent withholding tax for the taxed element of a benefit and a 40 per cent withholding tax for the untaxed element.

Under the scheme proposed in these bills, the Australian Taxation Office will be required, after a six-month period, to advise superannuation providers that a former temporary resident with a superannuation account has departed Australia. The superannuation fund will then be required to remit to the Taxation Office the balance of the superannuation account less any benefits that have already been paid. After the balance has been transferred to the Australian Taxation Office, the departed temporary resident may apply to make a claim for the Australian Taxation Office to pay their benefit to them, their legal representative or, indeed, another fund if they again return to Australia. The Australian Taxation Office will then be required to pay the balance, less any applicable withholding tax payable. Effectively, this means that six months after leaving the country a departed temporary resident will have to apply for their DASP through the Australian Taxation Office instead of the original superannuation fund. This effectively means that it is far easier to track down lost super from the time when someone was, for example, on a working holiday in Australia. This centralised process will be an improvement to the current system whereby there are, as I mentioned a little earlier, 6 million lost accounts, which of course is unsatisfactory from anyone’s viewpoint.

The inquiry of the Senate Standing Committee on Economics into these bills found that they have support, and the committee recommended that the bills be passed by the Senate. Once again, I do want to commend the serious work done by the Senate Economics Committee. They have a huge workload and always produce reports of a consistently high standard in relation to these often quite complex bills. Because they are referred to in the report, I will only speak very briefly about a couple of minor issues that were brought to the attention of the committee.

The coalition senators on the committee noted that this bill will automatically force benefits to be transferred six months after the temporary resident either leaves Australia or his or her visa expires. Even if the person is actively managing their account—that is, staying in touch with their fund—under this legislation, at the six-month mark their account will be closed. There has been a call for the government to do more to promote awareness amongst people leaving Australia that they are able to claim any superannuation that they have accumulated. The fact that there are six million lost accounts suggests that we have not done as well as we could in informing departing residents of the process for claiming the DASP they are entitled to. I accept that this is a difficult challenge. I faced it myself many years ago, and it is obviously still a significant issue. I would ask that the minister in his remarks in his reply indicate to the Senate what additional plans he may have in mind by way of an information campaign to better inform departing temporary residents. I make these remarks not critically but simply to note that existing mechanisms are not having the desired effect and some better mechanisms need to be employed.

According to the Bills Digest, the financial consequence of the bill is a net positive increase in the underlying cash balance of the Commonwealth over the forward estimates. These bills will help to streamline the claims process for lost superannuation and will remove the compliance burden caused by inactive accounts. This, as I mentioned a little earlier, is an original coalition initiative. I think it is a very worthwhile improvement that has been proceeded with by the current government and I am pleased to commend this bill to the Senate.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to speak for the Temporary Residents’ Superannuation Legislation Amendment Bill 2008 and the related bill. As Senator Coonan indicated, this measure was initiated by the former government and it is a useful measure that has been continued after a consultation period by the current government. The current situation is that people working temporarily in Australia have superannuation paid by their employer, as is usual for all employees, and then have the option to take it with them when they go back to their home country. But, often, it is left in superannuation accounts in Australia and in many cases these very small amounts of super are eaten up by fees charged by the superannuation fund. This measure makes sense in a lot of ways. That money will instead be paid into the government revenue and will be held there in case those temporary residents wish to claim it. In that case, they will pay the relevant departing Australia superannuation payment, the DAS payment. I think this is a very sensible arrangement.

During the Senate Economics Committee process, some concerns were raised about this, and the committee listened very carefully to those concerns. One of the chief ones was that some temporary residents paid money into their super account above and beyond the required statutory payment, expecting to be able to come back and claim that money, with the tax concessions given by the Australian government, at a later date. The committee accepted the view that the tax concessions allowed by the government for superannuation in Australia are to ensure that Australian citizens make sufficient provision for their retirement income and in turn create a smaller burden for future taxpayers. But there is no reason that the Australian government should in any way make concessions for temporary residents who go back to their own country. Temporary residents can of course withdraw their superannuation on their departure if they wish, in which case the government recoups some of the tax concession they have been given by applying that final tax through the DAS payment.

The concern about the retrospectivity aspect being unfair on these former temporary residents is not really valid. It is not the role of the Australian taxpayer to subsidise an ongoing savings vehicle for former residents who have left the country. The committee found that there was no reason for the taxpayer to continue to do that. It acknowledged that it is a change in the system but that there is no guarantee for those temporary residents that that advantageous system for them would continue.

There were also concerns expressed by some from the superannuation industry about the cost and time of implementing the changes. Again, the committee listened to these problems carefully. As has been noted, this was initially proposed last year, there was consultation done by the former government and it was well signalled that this was the proposed change. The incoming Labor government then took it out for further consultation. Super funds have known for some time that this was a likely outcome. So the committee did not accept that superannuation funds could not have expected this measure to be implemented. The committee also noted that, if there was a delay in implementation of these bills, there would be a delay in the revenue available to the government. The superannuation industry was fully involved with the government’s consultation process. We heard evidence in the Senate Economics Committee that there was no convincing case that the work they claimed would take 12 months could not in fact be done by the end of April next year. The committee took into account that superannuation funds might be a little reluctant to lose the fees on the accounts that they do have and would not necessarily be keen to implement the changes quickly.

The third and final strand of submissions, as Senator Coonan noted, was that there was some concern that people were not fully informed about their entitlement to take their superannuation entitlements when they left the country or indeed to claim them when they were back in their home country. The committee did make a recommendation that there should be better education of temporary residents about their entitlements. In particular, we heard from the student representative council of the University of Sydney, who were concerned that students who come to study here and do some part-time work were not well informed about their entitlements.

The committee asked that the government look to making a better system to ensure that people knew of the superannuation payments and to ensure that there was a range of promotional material in a range of languages provided to universities so that they could hand them out to their foreign students to remind them to claim their superannuation before they departed. There was also a request that the Department of Immigration and Citizenship consider the feasibility of writing to international students and other workers on temporary visas, reminding them about withdrawing their super just before their visa was due to expire. The Senate Economics Committee concluded that these bills should be passed and I commend them to the Senate.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I rise to contribute to the debate on the second reading of the Temporary Residents’ Superannuation Legislation Amendment Bill 2008 and the associated bill, the Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2008. The overall objective of the bills is, as I understand it, to address the situation where superannuation earned under the Compulsory Superannuation Guarantee requirements by temporary residents is left indefinitely unclaimed in super funds. The first step in doing this should be to do what is reasonably possible to ensure that those who actually own those superannuation funds have the opportunity to access them. Beyond this, where it is not possible to reasonably ensure temporary residents are reunited with their superannuation and they lose contact with it, I think it would be reasonable to take steps to consolidate that super into consolidated revenue.

The detail of this legislation will have the effect of gathering all moneys held by temporary residents in super accounts in Australia out of those accounts once they have been gone for six months, regardless of the wishes of those people, the degree to which they remain in contact with the super funds, whether they are actively managing their Australian super funds or even whether they have voluntarily deposited sums themselves into their super accounts on the understanding that they can invest it in Australia until they reach retirement age. The legislation contains no provision to try to ensure that these people are aware of amounts they might have deposited into super accounts before leaving or to make it easier for them to claim them. The only notification that they get is a question on the departure card as they are getting on the plane to leave.

This legislation does contain some concerning aspects and could come at a significant cost to Australia, to Australians and to our ability to attract talented people to work and study in Australia. As always, the devil is in the detail. The proposed legislation presented by the government has attracted strong and, in some cases, very reasonable representations from stakeholders highlighting a number of legitimate concerns, many of which appear to have been brought to the attention of the government and subsequently ignored. Effectively, what the bills do is as follows. Once a temporary resident has left the country for six months, or it is six months after their visa has expired, all funds paid into their super funds whilst earning in Australia will be paid into consolidated revenue to be used without restriction by the government. This is the case regardless of whether those funds were paid into super funds as part of the superannuation funds guarantee requirements or as voluntary contributions over and above those requirements. It is the case regardless of whether the owner of those funds knows they are there, remains in direct contact with the relevant super fund or is actively managing those funds. There is no requirement that those funds be ‘lost’ in the sense that the fund managers have lost contact with the owner.

Of course, the owners of those funds can access them upon the leaving the country—if they are aware of the existence of those funds, are able to understand and complete the relatively complex paperwork and are able to provide the proof required. But, even if they can, they will be required to pay an increased departing Australia superannuation payment of 35 per cent of the total amount in the fund. I do not have any issue with people being required to pay what is effectively a penalty tax on early access to their super; it is an appropriate thing. The money was paid into their super account on a concessional basis, and if they access it earlier it is right and proper that they pay a penalty. But this increased penalty tax, when combined with the 15 per cent contributions tax, gives a flat rate of tax paid on those funds of around 50 per cent. It applies even to people who have made voluntary contributions to their super funds on the expectation that they could withdraw it upon turning 60 on the same terms and conditions that apply to Australian permanents turning 60. It is worth noting that such individuals will end up paying a higher rate of tax than if they had taken that money as a cash salary.

It is important to remember that for some temporary migrants their time in Australia may well have been the only opportunity that they have had to save for their retirement and that they did so based on the then legislation. An additional issue is that, once the ATO has gathered up these people’s money into consolidated revenue, no earnings or indexation are to be applied while funds are held by the ATO, even if they hold them for 20 or 30 years until their owner retires and remembers that they have some superannuation that they earned whilst working in Australia all those years ago. What they will get if they actually do access it at that point is the exact amount paid in less the 15 per cent contributions tax and less the 35 per cent DASP. There will be no indexation, no interest and no dividends. The timing of the measures imposed by the bill has also been raised as problematic, and it seems to me that it is a probably a legitimate issue. Super funds have submitted that it is unrealistic to require them to provide the first report on temporary residents to the ATO by April 2009. One industry group estimated that the cost of trying to implement the measures across the industry in accordance with that time line could be up to $100 million. I do not know what the actual cost will be, and that remains to be seen. But it is apparent to me that there would some additional cost in trying to meet the deadline.

Suggestions were also made at the Senate Economics Committee inquiry hearing that not enough is being done to ensure that temporary residents are put in contact with their super before they leave the country and that education and awareness campaigns or direct contact through immigration would help address this issue. One suggestion by the student representative council of the University of Sydney—and I note that Senator Hurley mentioned some of their recommendations; all of them were good—was that, when those temporary residents on working visas apply to open a superannuation account, the visa holder must declare their visa and supply a domestic and overseas address. Once the final tax return is lodged and/or persons known to be on a temporary visa have not made a superannuation fund payment for six months, the fund could directly contact the person with information about temporary residents and their right to take their superannuation with them when they leave Australia, along with the application form to make that possible.

Other options exist to ensure that the owners of these funds are better informed about their existence and their rights over them, but of course exercising these options would necessarily decrease the overall quantity of funds available to the government, and hence they are probably not an attractive option. One solution to most of the problems in this bill would be to provide the possibility of giving temporary residents a choice to opt out of the relevant provisions of this bill in circumstances where they can demonstrate that they are actively aware of their Australian super funds and in contact with their fund provider. This would enable temporary workers who move base or other temporary residents who may return to Australia to retain their superannuation investments in Australia until they choose to claim them—subject to a penalty if before retirement age and on the same terms as any Australian if at or after retirement age.

These proposed changes to superannuation do not just affect temporary residents in an immediate sense but could affect Australia’s ability to attract and retain skilled workers. They could act as a disincentive to our attracting skilled and unskilled workers to fill demand needs and capacity constraints in Australia. The principle behind this bill is good and should be supported, and this is the reason why the coalition is supporting it, but to me some aspects of the bill do raise issues of concern that I think could be addressed.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I indicate my support for the second reading of the Temporary Residents’ Superannuation Legislation Amendment Bill 2008. I want to traverse neither the same ground that Senator Bushby did when he articulated so well a number of concerns that were raised, nor the concerns raised by Senator Hurley in the context of the Economics Committee in relation to this. I am also grateful for the time that I have had today with Senator Sherry to discuss with him some of the concerns I have had in relation to this bill. I circulated amendments earlier today in relation to the issue of compliance. Whilst I still have reservations about matters of compliance—the superannuation industry has indicated that there would be a cost of between $10 million and $100 million—I am not proposing to proceed with that amendment on the basis of the discussions I have had with Senator Sherry. I think we will have an opportunity to discuss this in the committee stage, or perhaps Senator Sherry could respond in his summing up to the claims made by the industry of costs between $10 million and $100 million. That is something that has worried me, but I was reassured to a considerable degree by matters raised by Senator Sherry in the context of discussions I have had with him today.

I will go to the nub of what principally concerns me: the issue of retrospectivity. The proposed legislation is retrospective in nature; there is no other way of looking at it. It means that temporary residents who have earned superannuation in Australia in the past on the understanding that when they turned 60 they could have access to their superannuation under existing legislation will now be subject to very significant taxation implications, often paying tax at a higher rate than the top marginal rate they were paying on the income they were earning in the first place. This impact is compounded for those income earners who, in good faith, made a decision based on the tax and super laws at the time to increase their level of contributions to their fund. I am in great sympathy with the comments made by Mr John Fauvet, a partner at PricewaterhouseCoopers, who gave evidence at the Senate economics committee inquiry:

It is just really a question of the rate and of the retrospective nature that applies to those individuals who are serious savers for their retirement, who were encouraged to do so … all of the time when they were here. This may well have been the only opportunity they had to save for their retirement, so they did that based on the then current legislation, expecting to be able to withdraw that superannuation in the same way as Australians can: tax free at age 60.

The argument is, ‘They’re not Australian citizens; why should we prop them up?’ but they made these investments in good faith, and I am in agreement with the argument put by Senator Bushby. These are people whom I think we should not dud, to put it colloquially, by making this retrospective in nature.

If this legislation is about lost or unclaimed super, I commend the minister for the work that he has done in relation to this. In fact, earlier this year, when I was trying to make a quid before I got to this place, I was doing a stint as a talkback radio host—I think it is a good thing I am here in the Senate and not doing talkback—and Senator Sherry was my guest on the program, talking about unclaimed super. We got quite a few calls that afternoon because people are concerned about this—lost and unclaimed super. Senator Sherry is to be commended for tackling an issue that ought to have been tackled much earlier. There has been a lot of talk about this in the past, and he is doing the right thing by looking at the whole issue of unclaimed and lost super. But in this particular case, when it comes to temporary residents, if a temporary resident is making an effort to keep in touch with their fund and is doing the right thing in the context of maintaining regular contact with their superannuation provider, I do not think it is fair that they should be subject to this new regime. I think it is fundamentally unfair. It is retrospective in nature, and I can foreshadow that I will be moving an amendment at the committee stage to ensure that that does not occur, both for those who already have funds in place and for those temporary residents who continue to maintain contact with their fund, because to me it is a fundamental equity issue. There may be other countries that do not treat Australians working overseas fairly, but that does not mean we should do the wrong thing by those temporary residents who are working here and, I believe, doing the right thing by keeping in contact with their superannuation fund.

Essentially, I believe that this is welcome legislation. I did have reservations—I still do to an extent—in relation to the issue of compliance costs, and I would be grateful if Senator Sherry would put on record his views in relation to that, but my principal concern is in relation to the issue of retrospectivity and for those temporary residents who are doing the right thing by keeping in contact with their super funds. That cannot be described as lost super, which I think is the mischief that this legislation is principally intended to deal with. It is not lost super if you keep in contact with your super fund.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

in reply—Firstly, I would like to thank all of those who have contributed to the debate on the Temporary Residents’ Superannuation Legislation Amendment Bill 2008 and the Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2008. There has been a considerable amount of interest in this measure. I will make two points initially. Firstly, I want to make it clear that a departed temporary resident does not lose their legal right to claim the moneys in their account. Even though it is transferred from what are generally lost accounts—although we have no breakdown, I will accept there is some that is not in lost accounts—the transfer occurs to the ATO. Senator Bushby raised a concern about the interest. At the moment, Senator Bushby, as you would be well aware, there is no interest.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Over time! It is going back over several years.

Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

It is going backwards. I accept the validity of the point of long-term rates of return in the context of super. But I would make the point that there will be no admin fees. Often, in a lost account, the admin fees send the account backwards despite the positive interest that would accrue over the long term. So there is an advantage in this methodology that is being taken. Secondly, whilst it is difficult to estimate, there will be a higher claim rate from departed temporary entrants simply because it is easier for them to go to the ATO, an Australian government instrumentality, than to have to find their money in one of 600 superannuation funds, including about 12 eligible rollover funds. So there are actually advantages in being able to access their money back in Australia for those departed temporary residents who do not claim their money when they leave. Whilst it is relevant to lost superannuation—I have made many comments over the years about lost superannuation, and most of the temporary residents’ accounts would be included in that pool of lost superannuation—what the government believes is the ultimate solution to Australians’ lost superannuation accounts is a related but separate issue that I hope we deal with next year.

I want to thank Senator Coonan in particular, because the foundation for this measure actually goes back some five or six years to when Senator Kemp was the Assistant Treasurer. He introduced on behalf of the former government a measure to allow temporary residents to transfer their money out of the country, which they did not have a right to do. Secondly, there was a tax applied on that transfer to offset the tax concession. This measure actually has its genesis in that measure introduced by the former government. Then we move forward to last year. As Senator Coonan has rightly pointed out, and I accept this—we can sometimes be bipartisan in this place—this was an initiative of the former government. It was announced before the election. There were consultations that had commenced with industry before the election, but it was not legislated before the election. We indicated our support for the measure during the election campaign.

I referred the preliminary proposals to go into legislation out for further consultation earlier this year. We did make some substantial changes to the initial proposals as put forward by the former government. We did listen, and we were principally concerned about a number of administrative and practical issues. I can for the record, and it is in the EM, state that the upfront cost for industry as a whole to establish this is $30 million and the ongoing cost is about $3 million. Prior to that consultation occurring and change in the administrative features, the industry had indicated that the upfront cost was going to be $100 million or thereabouts and the ongoing costs about $10 million.

Through the listening process, the consultation process, we did change the administrative operation of this measure very significantly. For example, it was initially proposed to collect the money before the temporary entrant left Australia. We decided that it would be far simpler and less costly administratively if it were done six months after they had left the country. The industry made, I think, some valid points about administrative costs. We took notice of those points, and the final legislation reflects that. It also usefully overcame what I think would have been a serious moral issue of detriment: if the money had been collected before the temporary entrant left the country, they would not have had death and disability insurance. By collecting the money after they have left, they still maintain death and disability insurance cover. If they are, unfortunately, injured or die on a building site, for example, they are still covered by insurance. So there were some very legitimate issues raised in that initial consultation. As I said, the former government did do a great deal of work. It was their measure, and we are here considering the legislation tonight. As I have indicated, it will help reduce the number of lost accounts and the amount of unclaimed moneys in our compulsory system, which arise when temporary residents depart Australia without taking their superannuation with them.

I will just briefly digress to the point that Senator Xenophon raised about a person being effectively required to take their money out of the system. The government would argue that it is not appropriate for a nonresident—unless they come back into the country and become a permanent resident; they are treated differently—to receive ongoing tax concessionality once they leave our Australian system. The purpose of the Australian superannuation system is not to provide an ongoing tax concessional subsidy, and presumably tax-free super at age 60, for nonresidents. It is not the purpose of our system to do that. It is not the purpose of Australian taxpayers to cross-subsidise those individuals once they move outside of the Australian system.

As Senator Xenophon has raised, the treatment of Australian temporary residents working in, say, the US or the UK is pretty shameful. If you are in their system, you get nothing back. The money stays in the pool of their consolidated revenue overseas; you get not a cent back when you return to Australia if you are a temporary resident working overseas. It is not true of all jurisdictions, but it is certainly true of places like the UK and the US, where Australians tend to work. While temporary residents who depart Australia are able to take their superannuation with them as a departing Australia superannuation payment, many do not do so. We have a figure. We estimate less than 10 per cent actually transfer it. This contributes to the total amount of lost moneys in the system. The amendments contained in the bill seek to address the lost account problem by requiring superannuation funds to pay the unclaimed superannuation to the tax office. The government has consulted on the measure. We released that discussion paper in May, we made significant changes and we have the legislation that is presented here today.

There are a couple of other matters I will try to cover off prior to the committee stage. Regarding the issue of the communications campaign, it is extraordinarily difficult to contact these people. Senator Coonan knows from her experience just how difficult it is when people leave the country and provide no ongoing forwarding information and no ongoing contact with their fund. To the credit of the previous government, they did introduce onto the back of the departure cards an ongoing forwarding address space. We will be building on that. The ATO is going to develop a communication strategy. The measures will include mail-outs to fund members informing them of the changes, website information, and media and editorial programs. Articles communicating the changes will be submitted to various internal and external publications. This will include targeted publications read by backpackers, international students and other groups associated with temporary residence. Current publications will be updated to reflect the changes. I do not in any way want to suggest to the Senate that this is easy—it is not, as Senator Coonan knows—but we will be making best efforts, and I am happy to provide further details once that campaign is finalised.

There is one other issue I want to comment on briefly, an issue that has not been touched on by those who attended the Senate Standing Committee on Economics and which is a legitimate issue that has come to the government’s attention only in the last couple of months as a consequence of the global credit crisis. I think it was legitimately pointed out at the hearings that at the present time superannuation funds are experiencing a greater than normal switching or flow of funds from non-cash investment options to cash investment options, and that places a greater pressure on funds to ensure liquidity in these current times. APRA, as the regulator, is well supervising and managing this particular issue, but this measure would place additional pressure on some funds. This was raised at the hearing.

As a consequence of that, the government believes that this is a legitimate concern. It was a new issue that had not been considered by either the former government or us back in May. It is a consequence of recent developments in financial markets. Therefore, we have indicated—we will get to the amendment—that, for a fund where there is a liquidity issue for transferring the moneys, if an application is made to the regulator, APRA, who has responsibility for prudential regulation, including liquidity, and APRA comes to the conclusion that there is a legitimate liquidity issue, the moneys are not forgone but there is consideration and they can be paid at a later date. We think that is a reasonable approach if the fund can show legitimate concerns about liquidity in these current uncertain times.

I think those are the main issues that are being raised in debate. This is obviously an important revenue measure. It is almost $1.2 billion in revenue, so it is significant. I conclude my remarks at this stage. We will get to the amendment to be moved by Senator Xenophon. We will not be supporting the amendment; we have some significant concerns, and I will outline those concerns in the committee stage. I thank all those who have taken an interest. This has been a complex measure by any consideration. It comes at a sensitive time. There is a lot of interest in superannuation at the best of times and, indeed, the not-so-best of times, as the funds are experiencing at present. I thank the various industry organisations and the funds for their ongoing interest and the very positive suggestions they made in the initial rounds of consultations. I thank and acknowledge the former government, including the former minister, Senator Coonan, and thank everyone for their contributions.

Question agreed to.

Bills read a second time.