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Tuesday, 16 September 2003
Page: 15270


Senator WONG (3:16 PM) —I rise to take note of answers given by the Minister for Revenue and Assistant Treasurer in question time today. What the minister demonstrated today is a frightening lack of understanding of superannuation policy and the pressing issues facing superannuation policy in Australia. Not only does this minister fail to grasp the key issues in the area of superannuation but she appears to suffer from some sort of ideological tunnel vision, where any reasoned criticism of her policy—what there is of it—is dismissed as some sort of Labor Party and industry fund conspiracy. It is unfortunate that the minister in the Howard government who has responsibility for this important area of superannuation, which will define Australians' retirement incomes in years to come, suffers from such tunnel vision.

Even the minister's own party colleagues are able to see sense. There was a unanimous recommendation from the superannuation committee to not apply the portability regulations to active accounts. I do not think that is a misrepresentation of your position, Senator Watson. In fact, I congratulate you as chair of that committee on putting good policy and good sense above party politics and, in the discussion of the portability regulations, making the very clear point that in their current form those regulations could lead to an increase, not a decrease, in the number of superannuation accounts in Australia. That is something we all agree is a problem. The point was made by the committee that this issue of portability out of active accounts is more properly dealt with in choice-of-fund legislation, which would allow scrutiny by the Senate and issues of consumer protection and efficiency to be addressed. Thank goodness for the committee and that the chair and deputy chair, Senators Watson and Sherry, can provide some reasoned debate and policy in the context of a minister who simply fails to grasp some of the primary issues in superannuation at this moment.

I want to turn briefly to the issue of exit fees. I asked the minister a question on that issue and again the minister simply failed to grasp the nettle on it. The Senate committee and other commentators have commented on the barrier to portability that is posed by outrageous exit fees—that is, fees that are charged simply for taking your money out of one account and putting it into another. I cited some of the examples to the minister in my question: a balance of $5,939 which would be hit with a fee of around $5,620 and a balance of $1,287 which would cop a fee of $1,195. I think any layperson, any Australian worker, would say those sorts of fees are unreasonable and they clearly constitute a barrier to taking your money out.

If the minister were serious about portability, if she were serious about actually encouraging people to consolidate their accounts and ensuring they are not financially penalised for doing so, she would do something about exit fees of the sort that I have described. But today again in question time we saw this minister simply refuse to concede that it is an issue at all. She does not think these sorts of exit fees are an issue. With a wave of her hand she airily dismisses exit fees as being a minor problem, as being only a problem in relation to older funds. I make the point that I agree with her in one respect: some of the industry funds certainly have far better practices when it comes to exit fees. But this minister simply brushes away examples of outrageous and exorbitant exit fees that would be applied to the superannuation funds of Australian workers. She says the market will sort it out. My question to the minister is: how many Australian workers' savings will be diminished while you wait for the market to sort this issue out? If this minister were serious about the consolidation of Australian superannuation funds, she would deal with the issue of exit fees. She would regulate those fees and ensure, as the Senate committee recommended, that those fees are limited to the reasonable costs of processing the transactions and any rollover costs associated with it.