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Wednesday, 23 October 2002
Page: 5722


Senator SHERRY (2:41 PM) —My question is to Senator Coonan, the Assistant Treasurer and Minister for Revenue. Can the Assistant Treasurer confirm that on 8 May this year she received an application for assistance on behalf of over 21,000 members of the Australian Workforce Eligible Rollover Fund who lost superannuation savings as a result of alleged theft and/or fraud when Commercial Nominees was trustee? Has the Assistant Treasurer sought advice from the prudential regulator, APRA, on this matter? Has APRA provided this advice and, if so, what was it?


Senator COONAN (Minister for Revenue and Assistant Treasurer) —I thank Senator Sherry for the question. The situation with respect to the recovery of funds arising out of the fraud of Commercial Nominees is ongoing. As I think I informed the Senate on an earlier occasion, there have been some determinations made by me and some money has flowed to those funds that otherwise were eligible for compensation under the Commercial Nominees investigation.

With respect to the ongoing recovery, I have decided to grant compensation to certain small superannuation funds formerly under the trusteeship of Commercial Nominees. There are 181 of those who have suffered eligible losses. With respect to outstanding applications for financial assistance, as I have explained before in some detail, the trustee of a superannuation fund can apply for financial assistance for a regulated fund under part 23 of the Superannuation Industry (Supervision) Act when that fund has suffered an eligible loss.

My current information is that 466 applications have been received for losses relating to Commercial Nominees. These losses relate to the ECMT, the Global bank account, the Enhanced Income Trust, the Enhanced Equity Fund and the Confidens Investment Trust. The total estimated losses for these funds are in the order of $30 million. ECMT losses account for 199 applications, and those estimated losses are in the order of $23.3 million. Determinations have been made in respect of 196 of these applications, and payment has been made to all 196 funds. There are three remaining applications relating to ECMT. Two relate to large public offer funds. These are the Australian Workforce Eligible Rollover Fund and the Wealthy and Wise Master Plan. APRA has informed me that these funds are outside the scope of the KPMG report that I had received. However, additional advice has been obtained by APRA on these applications and I expect to be in a position to make determinations in respect of these applications shortly. I can go on: GBA, EIT and EEF losses account for 179 applications, all of which are outstanding, with estimated losses in the order of $4.9 million. CIT losses account for 88 applications. These applications were, in fact, made on 30 July 2002. These remain outstanding, and I am waiting on advice in respect of those.


Senator SHERRY —Mr President, I ask a supplementary question. Minister, my question went specifically to the rollover fund and their application, which you have acknowledged that you have received. Can you indicate to the Senate, particularly for the 21,000 members of the rollover fund, when you anticipate being able to make a determination to provide assistance in regard to moneys lost and to fees in respect of compensation—particularly given that, in regard to the compensation determination which you have made to date, which you have mentioned, it took just over a year for moneys and compensation to be awarded.


Senator COONAN (Minister for Revenue and Assistant Treasurer) —I thank Senator Sherry for his questions. I really do think that they are reasonable questions. In respect of the matter taking a year, of course Senator Sherry would be well aware that, pretty well the minute I got the advice, I moved very quickly. I do not think anyone is suggesting that I have sat on anything in relation to this matter. I have no control over external accountants providing advice to APRA. But, in respect of the specific question about the Australian Workforce Eligible Rollover Fund, I have said that KPMG's advice did not cover the point. APRA now has additional advice, and you, Senator Sherry, and all those people affected who may be listening to this, can be assured that I will make the determinations the minute they hit my desk.