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Wednesday, 15 September 1937

Senator Sir GEORGE PEARCE (Western Australia) (Minister for External Affairs) [3.39].- There are five bills dealing only with the granting of superannuation rights to certain employees of the Commonwealth. I ask the leave of the Senate to make one second-reading speech to cover all of them. That would not debar any honorable senator from expressing his views on the individual bills. [Leave granted.]

Senator Sir GEORGE PEARCE - I move -

The five bills now before the Senate are designed to carry into effect, so far as legislation by Parliament is necessary, the promise of the Government to grant superannuation and furlough rights to officers of certain authorities under the Commonwealth. These authorities are the War Service Homes Commission, the Repatriation Commission, the Council for Scientific and Industrial Research, and the High Commissioner. For the sake of convenience, I shall refer to them as Commonwealth authorities.

The provisions of the Superannuation Act of 1922 were limited to persons permanently employed in the Commonwealth Public Service. There are, however, many persons in the employ of Commonwealth authorities who, whilst not " permanent officers " in the strict technical sense, have been employed by the Commonwealth for a considerable number of years. The Government has decided to grant superannuation and furlough rights to as many of these officers as possible. The superannuation rights of Commonwealth public servants are set out in the Superannuation Act 1922- 1934. That act contains a definition of the class of employee who is to enjoy superannuation rights, and it may be thought that the proposal of the Government could be given effect by a simple amendment of the definition of " employee " contained therein. The matter cannot be disposed of quite so easily as that. The employees of the authorities mentioned are not governed by uniform conditions, and it would be difficult to frame a definition which would cover all the employees whom the Government desires to benefit. After much consideration, it has been decided that the most convenient method for determining the officers who are to be regarded as "employees" for the purposes of the Superannuation Act is the publication of a. list of those officers in the Commonwealth Gazette. The four authorities concerned are to recommend to the appropriate Minister the officers who should be deemed to be " employees " within the meaning of section 4 of the Superannuation Act. The Minister will then direct, by notice published in the Gazette, that the officers so recommended are to be deemed " employees " ; and those officers will thereupon be brought within the scope of the Superannuation Act. Provisions to this effect are contained in the Australian Soldiers' Repatriation Bill, the War Service Homes Bill, the Science and Industry Research Bill and the High Commissioner Bill.

It is deemed desirable that the conditions of employment of the officers concerned should, where necessary, be given some stability. Employment under the Repatriation Commission and the Council for Scientific and Industrial Research is already governed by regulations under the -respective acts affecting those authorities. It is otherwise, however, in respect of employees of the War Service Homes Commission and the High Commissioner's Office. Amendments are, therefore, to be made in the War Service Homes Act and the High Commissioner Act to permit of the making of regulations setting out the conditions of employment of officers appointed under those acts.

The provisions thus far referred to look only to the future. But there are officers who have been employed by the several Commonwealth authorities for many years. These officers have, by reason of their long service, some claim for special consideration over and above that to be accorded to officers who will be appointed after the passing of this legislation. Accordingly, special provision is to be made for them as to medical examination and the units of pensions for which they are to contribute.

It will be appreciated that, normally, prospective contributors for superannuation benefits should be required to be medically examined in order to ensure that they will not become a burden on the fund from which the benefits would be payable. Future appointees will be required to be examined, but it seems to be unfair to apply the requirement as to medical examination t6 officers who have been employed over a long period. At the time of their original appointment many of them could have passed a medical examination. Many of these men are returned soldiers, and time is taking its toll. The result is that some of them would probably experience great difficulty in passing the requisite examination. The bill proposes, therefore, to exempt them from the necessity of being medically examined.

It may be argued that the admission of contributors who have not been medically, examined may prove to be a burden on the fund and would, therefore, be unfair to other contributors who have assisted in building up the fund. The force of this argument is admitted, and the Government proposes to reimburse the fund for any pension payments made in respect of any such contributor who, within seven years of his becoming a contributor, dies or is retired on the ground of invalidity or physical or mental incapacity to perform his duties.

The other matter in respect of which officers appointed prior to the commencement of the bill will receive consideration relates to the units for which those officers are to contribute.

It is proposed that officers who were appointed on or before the 20th November, 1922, and were not less than 30 years of age on that date should not be compelled to contribute for more than two units of pension. Such units are to be at the rates prescribed for the age of 30. In addition, they may elect to contribute for two and a half, three or four units at the rates for the age of 30. The date mentioned, namely, the 20th November, 1922, was the commencing date of the original Superannuation Act of 1922. That act contains similar provisions with regard to Commonwealth public servants who, at. the date of the. passing of the act, were over 30 years of age. Had officers of Commonwealth authorities been within the scope of the act in 1922, many of them would have bad the same privilege as was then conferred on members of the Public Service. It seems reasonable that officers of Commonwealth authorities who have been employed since 1922 should have a similar privilege, and the bill makes provision accordingly.

The bill deals also with another matter of considerable importance. It proposes that there shall be a provident account forming part of the superannuation fund, to which employees will contribute who are not eligible, under the existing law, to contribute to the superannuation fund or who, owing to their age, find contributions to that fund onerous. Benefits to such employees are to be payable from the proposed account. The persons who are to be contributors to the provident account are, firstly, returned soldiers appointed under subsection 8 of section84 of the Commonwealth Public Service Act who are not contributors to the superannuation fund; secondly, persons who cannot become contributors to the fund in consequence of their failure to pass the prescribed medical examination; and, lastly, employees who by reason of high age and low salary find the superannuation contributions onerous, and who elect to contribute to the account.

The contributions of a contributor to the provident account will be at the rate of £5 per centum per annum of his annual salary - payable in fortnightly instalments.

Upon retirement of a contributor owing to invalidity or retrenchment after ten years' service, or upon the death of a male contributor leaving a widow or children under sixteen years of age, there will be payable to him or his widow or children from the provident account - (a) the aggregate amount of his contributions to the fund plus compound interest on those contributions at 3 per cent.; and (b) an equivalent amount provided by the Commonwealth out of the Consolidated Revenue fund.

In the event of retirement, discharge before completing ten years' service, or dismissal, the amount of the contributions plus compound interest thereon at 3 per cent. will be payable to the contributor. The like amount will be payable to the personal representatives of a deceased contributor who was unmarried or was a widower without children under the age of sixteen years.

There is one other provision in the Superannuation Bill to which I should refer. It deals with employees who are paid in sterling as, for example, employees of the High Commissioner's office. In the case of these employees, it is proposed that, for the purposes of several calculations under the act, any reference to any amount of salary, contribution or payment is to be read as a reference to that amount in sterling. There may be gains or losses to the superannuation fund or the provident fund by reason of the application of the provisions as to sterling, but it is not intended that the fund or account should gain or lose by the reason of such application. If, therefore, the fund or account would receive amounts in excess of those it would have received but for the exchange provisions, those amounts are to be paid to the Commonwealth. If, on the contrary, the fund or account sustains any loss by reason of the exchange provisions, the Commonwealth is to recoup the fund or account the amount of the loss.

Such, briefly, is the purport of the main provisions of the measures to give effect to the Government's proposals. It is estimated that about 1,500 officers of the various Commonwealth authorities will be brought within the scope of the Superannuation Act. The additional liability of the Commonwealth in the first year in which the proposals as to superannuation and furlough become effective will, it is anticipated, be approximately £7,500. This amount will gradually increase, and should reach a maximum in the thirtieth year thereafter. The proposals do, I submit, confer a very great privilege on a deserving body of employees of the Commonwealth, and I heartily commend the bill to the favorable consideration of honorable senators.

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