Senator LUNDY —My question without notice is to Senator Short, the Assistant Treasurer. Is it true that the Prime Minister wrote to Commonwealth public servants just before the election and said, `I give you my rock-solid guarantee that the coalition will not cut and destroy public sector superannuation schemes or the entitlements of existing and prospective Commonwealth employees'? Can you guarantee that the new levy will not affect the entitlements of low and middle income Commonwealth employees? How many Commonwealth government employees will be affected by the new surcharge? Will the entire cost of the administration of the levy in Commonwealth superannuation schemes be borne by members of those schemes, or will the government make an additional appropriation to cover these costs?

Senator SHORT —In relation to the four questions that Senator Lundy asked, so far as the first one is concerned, I have not seen the Prime Minister's letter that she referred to. From Senator Lundy's description of it, I take it that what she said is broadly correct and, if so, that it is correct in fact, because the announcements in the budget will have no impact on middle and lower income public servants or, for that matter, on any other lower and middle income earners. The surcharge and the arrangements that have been outlined in the budget to make our superannuation system more fair and equitable are deliberately designed to exclude impact on or involvement by lower and middle income earners.

So far as how many public servants would be affected is concerned, I do not have those figures. I can get those for you, Senator Lundy. So far as the cost of the administration of the arrangements is concerned, the government, as you are aware, has appointed an actuarial advisory committee, being chaired by the Commonwealth actuary. That is meeting at the moment and has to report in a month or so to the government on the most suitable arrangements to handle the administration of defined benefit and, particularly, unfunded superannuation schemes.

Of course, as you are aware, the surcharge applies to employer contributions and, for an unfunded scheme, there are no such contributions to apply the tax to. Therefore, in the interests of equity for all superannuants and superannuant contributors, there will have to be arrangements made that will apply fairly and equitably to people, whether they are members of funded or unfunded schemes. The actuarial committee is examining and reporting on that at the moment. We will take account of their views and their recommendations in working out the final detail of the administrative arrangements to apply to funds of the nature of the Commonwealth schemes.