Mr COX (10:41 AM) —The Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Bill 2002 is the most recent of three that, along with three sets of regulations, provide for the splitting of superannuation in the event of a marriage breakdown. This package of more than 360 pages of new law will come into effect on 28 December this year. Labor supported the reform process and supports this bill. However, we have a number of concerns regarding the government's management of this process, and there are a number of issues that are yet to be adequately resolved. The original legislation introduced was subject to an inquiry by the Senate Select Committee on Superannuation and Financial Services, which tabled its report in March last year. Many of the concerns raised during the inquiry were addressed by the government, but a number of issues remain outstanding. Some consequential issues are dealt with in this bill but many remain unresolved.

While the principle of allowing super to be split in the event of a marriage breakdown is a relatively simple one, the complexities of both family law and superannuation, particularly defined benefit schemes, combine to make this new legislative regime very complex. It poses significant challenges for both the superannuation industry and for family law practitioners. While there is a degree of community awareness that these changes have been made, the level of community understanding is low, particularly in relation to how the legislation affects marriages that are in the process of dissolution before 28 December. This transition period was rendered more confusing by the commencement provision in the original bill that left the door open to an earlier commencement date by proclamation. It now seems certain that no such proclamation will be made and the legislation will commence the full 18 months after receiving royal assent. If this was always the government's intention, they should have said so without any ambiguity.

To facilitate the transition to the new regime, the government promised the superannuation industry a transition period of at least 12 months from the tabling of the new regulations to their implementation. However, to patch up deficiencies in the regulations, the government made an additional 102 pages of regulations on 25 July this year. This is in addition to further patch-up work in this bill. Most of the announced amendments to the regulations, made on 25 July, are of a relatively minor and technical nature. However, one area subject to substantial revision is the treatment of allocated pensions for the purposes of payment splits. It is a concern that the rules applying to an entire class of superannuation benefits have been altered so late in the day.

A number of areas of confusion in the new regime remain. One is the extent to which superannuation benefits transferred from one partner to another are subject to preservation. I understand that it is the government's intention that the preserved and non-preserved components of an interest be transferred on a pro rata basis. However, there are still some in the legal profession who believe that all of a benefit becomes preserved on transfer. We can understand that the government is a little nervous when it comes to talking about preservation, given that Peter Costello has let the cat out of the bag on plans to increase the preservation age across the board, but they should move to clarify this aspect of the new law.

Another area of uncertainty is whether members of defined benefit schemes will be able to make a `clean break' and transfer a proportion of their benefit, as required by a court order or financial agreement, to their former partner straightaway or whether they will need to wait until their benefits become payable in order to do so. Amendments to the Superannuation Industry Supervision Regulations provide for the immediate transfer of accumulation interests to another account in the same fund or a different fund, depending on fund rules and the non-member partner's preference. During the Senate committee inquiry the Attorney-General's Department indicated that there were constitutional difficulties in applying this `clean break' principle to certain funds, such as state public sector funds. The government should move to clarify which, if any, defined benefit members will be able to make a `clean break' and take the necessary leadership role in ensuring a national approach where state funds are constitutionally protected.

It would be fair to say that the low level of community awareness and the continuing uncertainty among the so-called experts do not fill me with confidence about the government's ability to explain complex changes to superannuation either to industry practitioners or the public at large. The government will need to lift its game substantially if and when the time comes to implement so-called choice of funds in order that the superannuation industry, employers and, most importantly, ordinary working Australians understand the changes and can make informed decisions.

Another area of ongoing concern is the resourcing of the Superannuation Complaints Tribunal. The original bill confers new powers on the tribunal to deal with complaints against superannuation providers from prospective members of superannuation funds—that is, spouses or former spouses who are party to, engaged in or considering a property settlement involving superannuation. Given the range of disputes likely to arise in relation to the splitting of superannuation interests and/or payments and from the complex provisions that relate to the provision of information to non-member spouses, the tribunal's workload will most certainly increase after 28 December. Labor has raised concerns about this in the past that were noted by the Senate inquiry, but as yet we have seen no indication from the government that it intends to increase the resources of the tribunal.

On the contrary, the government sees the tribunal as a retirement village for former politicians, not an integral part of our retirement income system. The appointment of former Liberal Senator Michael Baume on 3 October last year, two days before the federal election was called, by the then Minister for Financial Services and Regulation, Joe Hockey, marks a nadir of cronyism for this government. Clearly, his time in the plum posting of Consul General in New York was not enough for Mr Baume. It is instructive that, when asked what Mr Baume's qualifications for the job actually were, the current minister, Senator Coonan, could only reply that he has had a `long and distinguished career in parliament'. A quick search of Hansard over this `long and distinguished career' reveals that Mr Baume knew next to nothing about superannuation. Despite his appointment to this independent tribunal, Mr Baume continues to act as a shamelessly partisan newspaper columnist in defence of the worst policies of the Howard government.

Before the commencement of the new family law regime, Senator Coonan should commit to providing more resources to the tribunal and to taking the question of appointments more seriously than Mr Hockey obviously did. With the flood of complaints that would emerge in the event of so-called superannuation choice, it is the least fund members deserve.

The final issue in relation to superannuation and family law that this government has done nothing to address is the need for similar arrangements for de facto and same-sex couples. Once again, this is an area where both Labor and the bipartisan Senate inquiry have called for action but nothing has happened. The government must show leadership and enter into the necessary negotiations with the states to ensure that the needs of these couples are met. The chances of this occurring are limited, as illustrated by the government's unwillingness to accept a referral of powers from the states on property settlements for same-sex couples.

In conclusion, Labor supports this bill as part of a package of necessary reforms to superannuation and family law. However, there remains a number of issues that the government should address. This new and considerable overlap between super and family law presents serious challenges for all involved. The government has an obligation to ensure that any ambiguities are clarified and outstanding issues resolved.