Mr WILLIAMS (Attorney-General) (12:50 PM) —in replyI would like to thank honourable members for their contributions to the debate on this important legislative reform in the Family Law Legislation Amendment (Superannuation) Bill 2000. As I have previously said, it is a very important milestone and one that no other government has been able to achieve. The debate has highlighted that many couples whose marriages break down do not consider superannuation among their assets when they arrange property settlement. One of the defects of the current law is that there is no mechanism for superannuation held in one person's name to be divided or transferred to another's; nor can the Family Court order a third party, such as a superannuation fund trustee, to provide benefits to a former spouse at some future time, even though this might provide the fairest outcome for both spouses. However, the Family Court can and does take superannuation interests into account and divide other property accordingly. This unsatisfactory situation cannot continue.

Under the legislation, for the first time parties will be able to divide superannuation on marriage breakdown. This division will be able to be achieved in one of two ways—either by agreement of the separating couple or by order of the court. Separating couples will be able to make binding agreements about how to divide their superannuation interest or interests. This is in keeping with the government's commitment to giving people the flexibility to settle their own financial affairs wherever possible and, therefore, avoiding costly and protracted litigation.

I am pleased that the opposition has supported the policy intention of the bill, which is to provide for the division of superannuation interests on marriage breakdown. A number of speakers have raised a range of issues, and I propose to address some of them in response. The member for Wills asked why the legislation is to be `retrospective'—his word—and claimed that I have made inconsistent statements on this point. This is not the case. The member fundamentally misunderstands retrospectivity, and I suspect he is not alone in that. The legislation is not retrospective, because it does not apply to dissolved marriages that have finally settled their property arrangements. The legislation applies only to those couples who have not finalised their property arrangements.

The same member has claimed that extra funding will be required for the additional work that may be generated for the Superannuation Complaints Tribunal as a result of this legislation. The funding for the Superannuation Complaints Tribunal has been increased by $700,000 a year from 2001-02 onwards to cater for the change in its jurisdiction. Other funding decisions will need to be considered in future budgets.

The member for Wills and the member for Braddon raised the question of how much money will be spent on education concerning the new legislation. The budget papers for 2000-01 indicated that the education campaign would be funded from existing resources. The amount that will be spent will be determined in accordance with the usual procedures for deciding on the allocation of priorities from those resources. We have been consulting widely with interested organisations, including the Association of Superannuation Funds of Australia. ASFA has already begun its education campaign, in conjunction with my department, and has completed a national seminar series on the proposed changes. I expect that, once the legislation is passed, the family law section of the Law Council of Australia and the various law societies in the states and territories will conduct seminars or conferences on the subject. I expect also that community organisations involved with family law issues will educate their staff, who will be in a position to advise members of the public with whom they deal.

The member for Wills asked what the impact on Commonwealth revenue will be from allowing access to a second low-rate ETP threshold. When this issue was originally considered in 1998, it was considered that in cost-benefit terms it would be more expensive to attempt to track the low-rate ETP threshold through second and subsequent splits of the superannuation interests than it would be to allow access to new, low-rate ETP thresholds. In addition, this is consistent with tax relief provided in property settlements generally in relation to marriage breakdown, such as stamp duty relief and capital gains tax roll-over relief. This is, of course, a serious issue and is one the government will monitor closely.

The member for Wills urged me to follow up the possible application of the legislation to de facto couples. The issue of the broader reference of power to legislate for the division of property on the breakdown of a de facto relationship has been on the agenda of the Standing Committee of Attorneys-General for some time. I recently reminded all state and territory Attorneys of this unsatisfactory situation, at the last SCAG meeting. State and territory Attorneys have agreed to establish a working party to consider the most appropriate way of ensuring that the superannuation interests of de facto couples can be divided on the breakdown of their relationship. The member for Wills can be assured that the Commonwealth will actively pursue this issue and give the working party all assistance required.

The member for Wills criticised the government for the length of time that it has taken to get this legislation before parliament. I would like to remind that member that this is an extremely complex and difficult subject. I also remind him that the Australian Law Reform Commission recommended reform in this area in 1988. At that time, of course, the Labor Party was in government—and it was in government for eight further years. In the course of those eight additional years, nothing was achieved, not even a draft bill, before the Labor Party lost office.

The member for Wills raised a number of concerns that had previously been raised by the Association of Superannuation Funds of Australia. ASFA's concerns about the commencement provision have been taken on board by the government, and I will be moving an amendment in the consideration in detail stage to the relevant effect. In relation to ASFA's concerns about the information that trustees will be required to provide, ASFA noted in its submission to the Senate committee that it welcomed the standard declaration which would accompany an application for information, to ensure that trustees are satisfied that they are able to release the information. In addition, I will move amendments in the consideration in detail stage that will specify the information that the trustee is not permitted to provide to the person who applies for information.

Several submissions to the Senate committee raised the issue of prescription of both the circumstances in which a fee could be charged and the amount of that fee. Following further consultations with the superannuation industry, I will move an amendment that will restrict the trustee to charging only reasonable fees. The other concerns of ASFA that the member for Wills raised are issues that are dealt with in the regulations and will be considered in the context of developing amendments to the draft regulations that have been available for consultation.

A number of members made comments about the complexity of the reforms. The member for Barton stated that the bill strikes the right balance between complexity and the need for consistency. We concur with those remarks and add that there will be a loss of equity and justice if we try to make it more simple. Superannuation is complex, and glossing over the value results in inequity. The valuation also acts as an educative tool. Parties will then understand what type of superannuation they have and will avoid undervaluing. More importantly, it avoids protracted arguments about value.

The member for Greenway was concerned about existing cases and asked about bridging legislation. I remind the honourable member that the court may grant leave to allow a party to institute property proceedings if 12 months has expired since the decree absolute. The court cannot grant leave unless it is satisfied that hardship will be caused to a party or a child if leave is not granted. The member for Greenway also asked whether people can access superannuation to buy a house. This aspect of the law is governed by superannuation legislation, for which the Assistant Treasurer is responsible. This bill does not affect the hardship rules under the superannuation legislation.

The member for Fremantle used the debate to criticise the government's policy on legal aid. She claimed that there have been funding reductions in legal aid and the Commonwealth now provides $114 million in 2000-01. What the member failed to mention was that the coalition government removed an unjustified subsidy to areas of law which are the responsibility of state and territory governments. The coalition recently increased expenditure on legal aid by $63 million over four years, commencing in the current year. In addition, the impact of the reforms instituted by the coalition government from 1 July 1997 has effectively had the effect that state and territory governments have provided additional funding for legal aid in areas for which they have responsibility. Any additional funding provided by the Commonwealth goes to Commonwealth responsibilities, and family law features prominently in the use of that funding.

The member for Braddon raised a number of issues which, like the legal aid issue raised by the member for Fremantle, are not directly relevant to the legislation before the House. There is much that can be said in relation to the increased numbers of unrepresented litigants before courts. This is not the occasion to respond on that point, but I point out to the member that there have always been unrepresented litigants before courts. Courts have to have processes that enable them to deal with people who seek recourse to the courts without representation. The member also raised legal aid funding for the Tasmanian Legal Aid Commission. There are special issues in relation to that. Again, this is not the occasion for dealing with those. The member also raised the subject of the reform of family law generally. I invite the member to look at the reforms that have been effected in the last five years to see how extensively this subject has been addressed by the Howard government.

As members are aware, the bill is one component of the legislative package that will implement this policy. There will also need to be consequential amendments to other legislation, including those dealing with the issues of taxation, social security and veterans affairs. I would hope that this consequential legislation will be similarly supported. I record my thanks to the members of the Senate Select Committee on Superannuation and Financial Services, in particular its chair, Senator Watson, for the valuable contribution made by the committee towards the advancement of this important legislative achievement. The passage of the legislation will mark the culmination of extensive consultation between the government, the superannuation industry, the legal profession and other interested groups. I appreciate the cooperation and support that these groups have given to this important initiative. The consultation will continue in relation to the preparation of regulations.

Question resolved in the affirmative.

Bill read a second time.