Senator SHERRY (Deputy Leader of the Opposition in the Senate)(5.57 p.m.) —by leave—I move:

(5)   Clause 40, page 29 (after line 24), after subclause (1), insert:

(1A)   An RSA provider must not enter into any interest off-set arrangements or combination account arrangements with any employer who, or constitutional corporation which, has established an RSA.

Penalty:   100 penalty units

(6)   Clause 40, page 29 (line 25), omit "subclause (1)", substitute "subsection (1) or (1A).

Amendments 5 and 6 are very important to this legislation if we are to have the so-called level playing field. The legislation does not prevent banks from doing a deal with an employer to open accounts on behalf of employees. It is fact that an employer can and will open accounts on behalf of employees. We know that banks can do a deal with an employer to ensure that the employer encourages the employees to join their particular RSA product. In fact, the banks admit this.

The Australian Bankers Association told the Senate Select Committee on Superannuation that it is normal commercial practice to engage in deals with employers whereby half a per cent or a full percentage point may be shaved off the margins to provide incentives to the employer. That may not be in the best interests of the employee. Why should an employer enter into a side deal with a bank or other financial institution that delivers employees, at the behest of the employer, into a specific RSA product which, probably in those circumstances, may not be in the best interests of the employees? This product should be about what is in the best interests of the employee above all else. It is workers' money. It is compulsory.

We believe that it is not ethical for employers to have any sort of inducement agreement with banks. The point was made earlier that RSAs are a low growth, low return product. Senator Kemp has admitted that. The banks, too, have admitted that in evidence. These are not suitable products in many cases, particularly in the long term, for employers to induce an employee to join. That is our fundamental ethical problem, and that is why we have moved amendments 5 and 6.

Senator Harradine comes from my state of Tasmania, and we are involved in the union movement together. I know he would know the industrial reality at the workplace. I am sure he is aware that, if employers say to employees, after providing all the information, they would like them to join a particular RSA, nine out of 10 employees would sign up. Employers will be doing a lot of encouraging if they are getting a cut-price rate on the side from a bank. They will certainly be doing that as enthusiastically as they can. As I have said, we believe such a practice would be totally unethical, and it should be proscribed and not permitted. That is the purpose of our amendments 5 and 6.