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Tuesday, 25 March 1997
Page: 2423

Senator KEMP (Assistant Treasurer)(8.42 p.m.) —We are, not surprisingly, opposed to the amendments moved by Senator Sherry. They have one clear, explicit aim—

Senator Sherry —Choice.

Senator KEMP —No. Their clear, explicit aim, Senator, as you well know, is to attempt to sink RSAs. That is the implicit aim of what you are on about. You are too honest at times, Senator, but we regard this as an amendment which must be defeated. We regard it as an unfair amendment. The key policy objective of RSAs was to assist small business in meeting SG obligations. RSAs aim to be a convenient, low cost, accessible vehicle for small employers. This will not be achieved if the employer cannot open an RSA on behalf of an employee. So we will be opposing your amendment. The RSA bill is based—and again we get back to the competitive neutrality—on the existing SI(S) Act 1993. Section 153 of the SI(S) Act currently allows for an employer to open an account in a superannuation fund on behalf of their employees and it is current practice for some public offer superannuation funds. As such, a similar requirement has been included in the RSA bill.

If we are after competitive neutrality—and we are—I would have thought that you are attempting to impose on RSAs an obligation which you are not prepared to see in relation to superannuation. It is worth noting that in response to a question by Senator Conroy on whether an employee must sign an application form to become a member of a master trust, Mr Steven Child, representing LISA, said an employer opens the account for the employee without the need for the employee to complete a separate application form.

It is also consistent with the superannuation guarantee legislation, which places the obligation on the employer to contribute to a fund on behalf of employees. This minimises costs and maximises convenience for employers, particularly in small business, in discharging their SG obligations.

We are very much opposed to the amendment that you have moved, Senator Sherry. Though you recognise that the government has a clear mandate for RSAs, you have revealed with this amendment an attempt to sink the whole concept of RSAs, and we are opposed to what you are trying to do.