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Tuesday, 25 March 1997
Page: 2399

Senator ALLISON(5.08 p.m.) —by leave—I move:

(3)   Clause 38, page 28 (line 28), omit paragraph (i).

(4)   Clause 38, page 29 (after line 6), at the end of the clause, add:

   (3)   RSA providers must not charge fees in relation to the opening, keeping, depositing, withdrawing or transferring of amounts held in RSAs.

These amendments would prevent RSA providers from charging fees on RSA products. As Senator Sherry has already indicated, the credit unions have already said that they would be quite happy to accept that. The Democrats think it is hard to see why banks or anyone else should need to charge fees on RSAs given that deposits will be infrequent, probably made only quarterly and then by electronic funds transfer. Withdrawals from RSAs will be very rare indeed. As we have already mentioned, these RSAs are likely to be very lucrative for the banks.

In the Democrats' section of the 22nd report of the Senate Select Committee on Superannuation, we reminded the government that it had said that RSAs were to be `a simple, low cost, low risk product'. This move would certainly ensure that they were low cost. The credit unions were the ones that actually made that suggestion that there be no fees at all. On that basis, we think these two amendments are very supportable, given that the government intends that they be low cost. If credit unions can offer such a product without charging fees, we see no reason why other financial institutions cannot do likewise.