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Tuesday, 25 March 1997
Page: 2349

Senator SHERRY (Deputy Leader of the Opposition in the Senate)(1.09 p.m.) —Firstly, on the legal advice, Senator Kemp, if we tracked the legal advice you have got on the so-called surcharge that we will be dealing with tomorrow, I think you would be mightily embarrassed. I hope you have not got the same lawyers advising you on this.

RSAs, if offered by a complying superannuation fund, will be subject to this legislation—correct. But, Senator Kemp, the way in which—and I have had extensive consultation with and listened to industry—industry itself structures its RSAs will be its choice. I am informed by my industry advisers, whom we have been meeting frequently on these matters over the last few months in particular—

Senator Kemp —I'll bet you have.

Senator SHERRY —Yes, we have and we've been listening to them. Frankly, Senator Kemp, I find it difficult to find anyone who agrees with you and disagrees with us. That is our struggle at the moment.

Senator O'Chee —I agree with him.

Senator SHERRY —I'm sure you would. Yes, they will be subject to the retirement savings legislation if they offer an RSA product, but they will so structure their product that they will not be subject to two regimes. Even if they do not structure their product, even if they make the choice not to structure their product to be subject to the two regimes, and even if they decide that they are going to be subject to the two regimes, depending on how they decide to structure their product, the point made by Senator Allison is valid: that is a choice that they make and a cost they choose to bear if it is commercially viable to offer the product.

The other point I make, Senator Kemp, is that you have raised this issue of dual legislative coverage. There are other places in this legislation where banks are required to be subject to the jurisdiction of this legislation as well as other superannuation legislation. So if your concern is about dual legislative coverage and competing costs, I would contend that you have got a problem with this legislation in respect of banks being subject to the same sorts of problems.

But that is a commercial decision for the institutions offering RSAs to make. If it is too costly, they will not offer the product, but my advice—certainly from the funds we have consulted—is that it is not going to be a problem. Where they choose to offer an RSA, they will bear whatever the cost is regardless of the legislative framework that they are subject to. What they want is the right, as banks have, to make that choice.