Mr HOCKEY (Financial Services and Regulation) (10:52 AM) —I move:

That the bill be now read a second time.

The bill implements the coalition government's choice of superannuation fund measure. This measure was a key initiative in the 1997-98 budget and involves reforms to give employees greater choice over which superannuation fund or retirement savings account will receive superannuation contributions made on their behalf by their employer.

The choice of fund arrangements are about giving employees greater choice and control over their superannuation savings, which in turn will give them greater sense of ownership of these savings. The arrangements will increase competition and efficiency in the superannuation industry, leading to improved returns on superannuation savings.

The government has consulted widely in putting together the details of this important reform. Extensive consultation led to enhancements of the original model being announced in November 1997. These were designed to significantly reduce the administrative burden on employers by allowing greater flexibility in how choice is offered, while ensuring that employees still had an effective choice of fund. The announced enhancements were widely welcomed by the industry.

The government is continuing to work with industry on the design details of the proposed key features statements. Draft key features statements were prepared in consultation with industry and have been market tested with a variety of groups. The results of the market testing is being fed into a redesign of the key features statements.

While the government is prepared to consult and listen and respond to ensure the smoothest possible implementation of choice, it is not prepared to compromise on the fundamentals. The fundamentals of this reform are that employees get a genuine choice as to which fund their superannuation is paid. Models for implementing choice which effectively allow employers to veto an employee's choice simply do not meet this essential criteria.

The reforms to which this bill gives effect are scheduled to first operate from 1 July 1999 in respect of new employees, having already been deferred from 1 July 1998. It is time to conclude the debate on these important matters to allow their orderly implementation, for the benefit of all Australians as they save for their future.

I commend this bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Martin) adjourned.