Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Tuesday, 25 March 1997
Page: 2439


Senator SHERRY (Deputy Leader of the Opposition in the Senate)(10.05 p.m.) —by leave—I move:

(22)   Clause 68, page 52 (line 5), omit "and misleading", substitute ", improper and misleading".

(23)   Clause 68, page 52 (line 11), omit "and 73", substitute ", 73 and 76A".

(24)   Clause 73, page 54 (line 11), omit "or 72", substitute ", 72 or 76A".

   Note:   The heading to clause 73 is altered by omitting "or 72 ", and substituting ", 72 or 76A ".

(25)   Page 56 (after line 15), after clause 76, insert:

76A Improper conduct in the provision of RSAs

(1)   An RSA provider, or an associate of an RSA provider, must not:

   (a)   supply, or offer to supply, goods or services;

   (b)   supply, or offer to supply, goods or services at a particular price; or

   (c)   give or allow, or offer to give or allow, a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services by the corporation;

   on the condition that the person, or one or more of the employees of the person, to whom the RSA provider supplies or offers or proposes to supply the goods or services, will hold, or has applied or agreed to hold, an RSA provided by the RSA provider.

(2)   An RSA provider, or an associate of an RSA provider, must not refuse:

   (a)   to supply goods or services to a person;

   (b)   to supply goods or services at a particular price to a person; or

   (c)   to give or allow a discount, allowance, rebate or credit in relation to the supply of goods or services to a person;

   for the reason that the person, or one or more of the employees of that person, does not hold, or has not applied or agreed to hold, an RSA provided by the RSA provider.

(3)   A contravention of subsection (1) or (2) is not an offence, but it may give rise to civil liability under section 73.

Again, I will paraphrase in the interests of time. Firstly, in respect of our amendment 22, we propose to insert the word `improper' into section 68 of part 7 of the bill. This will have the effect of ensuring that civil liability may arise in situations where the RSA provider has behaved in an improper manner. The impropriety that this amendment intends to catch is contained in our amendment 25, which seeks to insert a new clause in the bill that prohibits third line forcing.

Labor is concerned that the situation may arise where the RSA provider may offer a range of inducements to encourage employers to open RSAs on behalf of employees. We had some debate on this earlier. We did carry earlier, and I do thank the Senate for supporting it, a provision that said:

An RSA provider must not enter into any interest offset arrangements or combination of counter arrangements with any employer who, or constitutional corporation which, has established an RSA.

This approach in respect of these amendments is entirely consistent with what was carried earlier and, as Senator Kemp pointed out, he did not want it carried earlier but it was carried. He thought this was the appropriate place and I hope that you, Senator Kemp, will at least consistently approach the position and accept that a proposition of this type should be put in. So this is the effect of opposition amendments 22 to 25. As I said earlier, the Bankers Association told the Senate Select Committee on Superannuation that inducements were a normal practice for financial institutions. We have made the point time and time again that these accounts are for the benefit of the employee, not the employer, who may be induced by some relationship with their particular financial institution. We have been over this extensively.

In regard to amendment 23, we extend the objects of the part to ensure that civil liability extends to section 76A. As I have already explained, we believe it would be improper for an employer to open an account on behalf of an employee. The employee must have the liability to action a civil liability claim if that person believes the employer has engaged in improper conduct. I have referred to what might occur with an improper relationship with the financial institution.

Amendment 24 seeks to extend clause 73 so that an individual can bring a civil liability action under clause 73 where our proposed section 76 has been contravened. Our amendment 25 is a new clause which defines what would constitute improper conduct on behalf of an RSA provider and it ensures that a contravention of the section may give rise to civil liability action. Again, paraphrasing because of time, this section defines improper conduct to include the provision of goods or services and the offer to supply goods or services or the allowing of a discount, allowance, rebate or credit in relation to the supply, or proposed supply, of goods or services to a person or corporation where a condition is that one or more of the employees becomes a holder of an RSA.

We contend that this sort of behaviour by the employer—entering into some sort of financial relationship with the financial institution—is fundamentally improper and unfair to the interests of the employee. We believe it is unethical for an employer to be involved in such conduct and that, under this legislation, it should be very clearly outlawed. I hope that Senator Kemp is not going to say, `Look, this is tilting the level playing field the other way.' Other forms of superannuation saving have a trustee governing them. They cannot enter into improper relationships because it is the duty of the trustee to act in the best interests of the members of the fund.

With RSAs, it is a different type of product. It is the duty of the bank to make a profit. As many members as can be are signed up to RSAs through employers and, in most instances, it is arguably the duty of employers to make a profit. They can form a financial relationship to their advantage with their financial institution, which does not advantage the employee, and above all else—as Senator Harradine and other speakers in this debate have alluded to—it is the interests of the employee that must be protected from improper behaviour, which is ethically unsound and insupportable. That is the effect of opposition amendments 22 to 25.