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Tuesday, 25 March 1997
Page: 2349


Senator KEMP (Assistant Treasurer)(1.06 p.m.) —I think Senator Sherry is not grappling with the legal problems that we have here. Senator, I have listened carefully to your comments. You disputed the advice that I gave to the Senate. Naturally, I went back and sought further advice to ensure what had been said was correct.

Your amendment is to the definition of RSA institutions. Therefore, they would have to be subject to approval under the bill. This means they would have to be approved twice. The compliance problems which I raised with you would apply. So the first point I would make is that there is a legal problem with the issue that you have raised. I repeat that we have announced that public offer super funds will be able to offer RSA look-alike products. That is the government's commitment.

The policy will be implemented through the SIS regulations. It cannot be offered, according to my advice, to all employer sponsored funds because some will not be subject to any capital requirements or any ISC formal ap proval processes. We are adopting a very responsible attitude to this to the extent that with RSAs we wish to have a level playing field, as you say, and we are entirely supportive of superannuation funds offering RSA look-alike products.

I think Senator Sherry may have unwittingly revealed his hand in relation to the comments on banks. The reality is, Senator, that you do not like RSAs much. Your colleagues do not like RSAs much. You recognise, and give lip service to, the fact that it was an election commitment but your amendments are designed in toto to undermine the competitive nature of RSAs. That is essentially what you are on about.

The legal issue is that it sets up a problem which I have related in terms of reporting arrangements. That is the legal problem. The substantive issue is that we are dealing with that by allowing public office superannuation funds to offer look-alike RSA products, so we are dealing with that. We have raised the issue in relation to all complying funds—there are problems and we have dealt with that issue. I would urge the Senate not to pass the amendments because they are simply not needed and add to the complexity.