Mr TONY SMITH (5:36 PM) —No area provokes more consternation and at times outrage in the community than constant changes to the area of superannuation. It is an area that has been with us now for a large part of the 1980s and certainly the whole of the 1990s. I recall that, as an employer employing one person from time to time, I found the existence of the thing a damn nuisance, to say the least. I believe that the employee ought to be responsible for their own superannuation and retirement and, consequently, while I was permitted to by the law, I offered the employee the chance to make their own arrangements for their own superannuation by paying that extra three per cent above the award wages. Most of the time I believe they did not bother with that, but I believe that that was the responsibility of the employee, not the employer.

Eventually, the Labor government introduced legislation that compelled employers to make sure that their employee was in a particular superannuation fund. Obviously, as a result of that, I, as an employer, was forced somewhat kicking and screaming into doing it. I was never happy with it. Interestingly, I noticed in an article by John Cavanagh in the Australian on 26 May 1998 that 75 per cent of employers basically still take the same view that I did then and said that they preferred less involvement in managing superannuation. Indeed, small business owners in particular see the government's new superannuation member choice arrangements primarily as an opportunity to opt out of the superannuation system altogether. They regard superannuation as an administrative and legal burden and would look for solutions to relieve them of their responsibilities, according to a survey that was published.

The survey, which was conducted by a superannuation company, SMF Funds Management, found that two out of three employers are confused about their responsibilities under the new system and their biggest concern is about their duty to educate investors and help them select an appropriate fund, a task that might leave them liable if the chosen fund loses money. It is interesting that the member for Parramatta (Mr Ross Cameron) made an observation based on what he saw the bill did; namely, he felt that employers were adequately protected by the measures in the bill. I do not necessarily jump in and say that he may have been a little rash in making such a statement. But, based on my reading of clause 32Y of the bill, if that is the protection for employers then I say it should go back to the drafter in a hurry, because in my legal opinion that will not protect employers. That is insufficient to protect employers from anything they might do in relation to advice that they may give to an employee. If that is the provision that is supposed to protect an employer, then heaven help the employer if he is told to rely on that.

I think it is fair to say that, interestingly, in a philosophical sense, the side of politics I lean toward and have been a part of for most of my working life was opposed to compulsorily levied superannuation. It took the view that that was not appropriate. Of course, the previous government over a long period of time introduced this system, and it gradually started coming. I suppose it is extremely difficult to untangle it now that there are billions and billions of dollars tied up in this. There is something like $22 billion tied up in industry funds alone. So that gives some indication of the amounts involved. There are huge amounts of money tied up, and huge amounts of money are being made out of this industry by people probably not doing all that much work. At the end of the day, I am sure that many members constantly get a stream of people into their offices complaining about superannuation problems, such as fees which are eroding their money because that money is sitting in a small account somewhere over time. I find that is pretty odd, to actually say, as the member for Wills (Mr Kelvin Thomson) did, that this is a lifetime investment for working people. Yes, that is great in theory. But in practice can anybody say, `Yes, I am going to be working in the XY industry for the rest of my life, and I will be in a settled job for the rest of that time'?

We have now had to realise in the private sector as well as the public sector that there will be periods of unemployment. There will be periods of moving. There will be periods of adjustment and that is when we will get periodic and sporadic peak areas of employment and unemployment. That is when we will get these problems with funds and the problems with fees. I often wonder why fees are taking money out of those funds so that they can basically denude them. If the money were put in a bank or some sort of fixed investment, at least it would retain the corpus of the fund and it would not be denuded by fees. I cannot understand that. I find that many of my constituents cannot. Why can't we look at something like that? Why can't we look at small bundles of superannuation that seem to shunt all over the place? We have 18 million superannuation accounts for eight million workers—that was referred to before. That says a lot in itself.

I also hear from the member for Wills about world's best practice. It has become a cliche now for everything from container lifts to banking and securities industries and now to superannuation. I always get frightened when I hear the phrase `world's best practice'. When I hear that term I think, yes, subject to a number of qualifications and the qualifications are the devil in the detail in the whole question of what is and what is not world's best practice. It is a similar phrase to one pulls oneself up by one's own bootstraps. I find it almost a meaningless term.

Basically, people are sick of the constant changes to superannuation, and now there is a change that is going to hit employers—small businesses—well and truly in the neck. The explanatory memorandum provides that it is going to cost more than $21 million initially and $15 million in recurrent expenditure. So here is yet another impost on small business, something on which all of us in this House are going to have to go back to our small businesses and say, `Sorry, here is another thing; here's another cost for you to employ somebody. Here is another dead dollar gone.' When you add up all these dead dollars, you could have another person in that business, and that is the whole problem with this super, super regulation—and I use the term in a wider sense than `superannuation'. The more regulation, the more dead dollars. I notice in an article in one of the financial papers a Mr Nettheim of Australian Business Ltd who, when talking about potential liabilities in terms of an employer, was quoted as saying that it is quite obvious that employees will go to their employer and say, `What do you think I should do?' and Mr Nettheim says:

. . . potential liabilities might dissuade employers from giving advice . . .

I can imagine that they will have to have a note, a little piece of paper, when the changes come and they will have to get their employee to sign it. No doubt the note will have to be carefully drafted by solicitors or counsel to ensure that it adequately covers the situation. But then Mr Nettheim says:

It would be much safer to direct workers to their accountants or financial advisers.

I do not know about you, Madam Deputy Speaker, but the average workers in my electorate cannot afford accountants, let alone financial advisers, because there is nothing left after the end of a pay period to employ a financial adviser or an accountant. With respect to Mr Nettheim, it is an absolutely absurd statement. Are we going to say to the average workers of Australia that they are going to have to consult their financial advisers about these things? Be real!

Here we have a direct imposition on business. Yet another cost. It might only be a dollar a week or it might only be $5 or what have you, but it is another dollar out of the ever-decreasing dollar that business has to go around, and yet another disincentive to employers to employ. Why can't we encourage people to be responsible for their own retirement? The Labor Party brought this system in and I guess we are stuck with it now, but why can't there be a greater encouragement offered to employees to plan and work out their own retirement?

So now we have a situation which I used to think was a case of this government trying to relieve the burden for small business. Now it is going to impose additional burdens on small business, and I think that is a very undesirable state of affairs and, again, one that will leave even more cynicism out there in the community when the government starts telling small business, `We're all for small business; it's the engine room of the economy, et cetera. But, hang on, we're going to have to get you to pay a few more dollars in relation to superannuation.' The cynicism is already bursting out there and the electorate is just waiting for the relief valve of the next election to express its views about that.

Overall, I have some reservations about this legislation. I think it is legislation that has not been properly thought through, and I will not be voting on it. But I would say that employers have certainly got a lot of thinking to do. It is definitely an issue for small business. An article in the Australian Financial Review says:

Mr Brad Pragnell of the Australian Society of Certified Practising Accountants said: `Coping is definitely an issue, especially for small business'.

Small companies were unlikely to be covered by certified agreements that included super clauses and would consequently bear the brunt of the new laws, Mr Pragnell said.

That did not need to be said but there it is. The article goes on:

Employees covered by agreements with provision for super do not have to be offered super choice.

It will be a double-whammy according to Mr Pragnell, because small companies are the least likely to have the necessary funds to administer choice.

`Choice will cost on all levels. If an employer opts for limited choice, there will be a cost involved in choosing the four funds to be offered to employees,' Mr Pragnell said.

`Unlimited choice could involve expensive administration. Whatever the decision, material will need to be prepared and distributed to employees and, again, this will cost money.'

On it goes, and we see yet another change to this ever-shifting sand of superannuation. I think people are basically sick of it and would like a system where they can be absolutely sure that their superannuation is protected. I am talking about workers who, unfortunately in this day and age, are compelled to move from job to job with periods of unemployment in between. And what happens to the money? It is gone in fees in the meantime, and they cannot get access to it anyway when they are desperate, which is most of the time—or there is this great administrative process to get access to it. So I think it is a system that has got to be carefully looked at again.

Yet again we have the government proposing to move on superannuation with absurd proposals to legislate in relation to divorce superannuation. That is another great furphy, because it already exists in Family Court proceedings: I have never been in one case where it has not been taken into account; never. Yet the Prime Minister announced on International Women's Day, `We are going to make it fifty-fifty.'

Mr Melham —What a charade!

Mr TONY SMITH —What a joke! Apart from anything else, it takes no account of the individual circumstances that exist in a particular relationship. Anyway, that is another issue, and I obviously will get sat down if I go on too much about it.

It is still related to superannuation and, again, I do have great sympathy for maintaining the industry funds because I think the trade union movement does have a role to play in relation to industry funds. I think the role of trade unions—and, again, I very much support choice in unionism—to maintain and protect workers for their retirement is an important one to have. It is one of the very significant roles of unions in the 1990s. The old `knock `em down, bash `em out' role is going, thankfully. The protection by unions of workers in the superannuation area and the provision holidays at cheaper locations and those sorts of areas are good things.

I think the idea of cheap, low cost industry funds is very good. Yet are they going to survive under these proposals? I have my doubts about that, and doubts have been expressed in various articles in the Australian Financial Review and elsewhere about this. I do say in respect of employers and employees there are going to be casualties. As Alison Kahler from the Australian Financial Review says, `The shake-out in superannuation threatens casualties.' These are matters we should look at in particular in relation to industry funds. All in all, I have grave reservations about this legislation and I will not be supporting it.