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Thursday, 3 December 1998
Page: 1265

Mr REITH (Workplace Relations and Small Business) (9:35 AM) —I move:

That the bill be now read a second time.

The Workplace Relations and Other Legislation Amendment (Superannuation) Bill 1998 will amend the Workplace Relations Act 1996 to remove the regulation of superannuation as an allowable matter in federal awards. The bill will mean that businesses and employees would no longer be forced to have their superannuation rights and obligations governed by duplicate layers of regulation—the existing layer of regulation created by the award system will be subsumed by rights and obligations under the superannuation guarantee legislation. This measure will reduce compliance costs, minimise complexity and simplify administration.

It will also enhance the process of award simplification.

This proposal is not new. When the Workplace Relations and Other Legislation Amendment Bill 1996 was originally introduced, the allowable award matters proposed did not include superannuation. The amendments subsequently agreed with the Australian Democrats retained superannuation in the list of allowable award matters as a temporary measure, on the in-principle basis that superannuation could be removed from award regulation in conjunction with the implementation of the coalition's `choice of funds' legislative package.

The continued pursuit of this sensible measure to remove the regulation of superannuation from the award system was specifically reaffirmed in the coalition's workplace relations policy More Jobs Better Pay released during the recent 1998 federal election campaign.

The Australian Industrial Relations Commission, in its 1994 superannuation test case decision, recognised that the superannuation guarantee legislation established the safety net for superannuation entitlements. Removing superannuation from award regulation reflects the safety net role of the superannuation guarantee legislation. Those employers and employees who wish to use the workplace relations system to regulate occupational superannuation beyond the safety net level can continue to do so through the agreement making processes of the Workplace Relations Act 1996 or through over-award payments.

An earlier bill dealing with this matter, the Workplace Relations Amendment (Superannuation) Bill 1997, was introduced on 4 December 1997, along with the Taxation Laws Amendment Bill (No. 7) 1997, which contained provisions for the choice of superannuation funds. That bill was passed by this House, but did not pass through the Senate in the previous term of the coalition government. The bill introduced today is similar to the previous bill but now includes transitional provisions that were not previously necessary as the removal of superannuation from awards would have then been effected as part of the award simplification process introduced by the 1996 amendments.

The present bill will amend the Workplace Relations Act 1996 to prevent the commission from dealing with disputes about superannuation by arbitration. Superannuation will cease to be an allowable award matter, and the commission will not be able to make exceptional matters orders about superannuation.

The transitional provisions in the bill will have the effect that existing superannuation provisions in awards will cease to operate after a six-month transitional period. The commission will then be required to remove superannuation provisions from awards. The bill will preserve existing superannuation clauses beyond this six-month period where they are `special consent provisions'. This is consistent with the treatment of special consent provisions by the award simplification process under the Workplace Relations and Other Legislation Amendment Act 1996. Special consent provisions are provisions of awards made in accordance with the particular wage fixing principles of the commission that were put in place through national wage decisions from 1991 to 1995. Such special consent provisions are no longer provided for and therefore this preservation will not be an avenue to introduce new or amended superannuation provisions into the award system.

Schedule 2 of the bill amends the Superannuation Guarantee (Administration) Act 1992 to enable employers to continue to use `notional earnings bases' based on current award provisions in determining obligations under that act, even after the award provisions cease to operate. This will ensure that employers do not incur additional superannuation costs as a result of the removal of superannuation from awards. In combination with the Super annuation Legislation Amendment (Choice of Superannuation Funds) Bill 1998 , the changes in this bill will mean that `flat dollar amounts' will also continue to be recognised for superannuation guarantee purposes. These amendments will complement the new choice of funds arrangements contained in the choice of funds bill, introduced into this House on 12 November 1998. In combination, these bills deliver genuine superannuation reform.

This bill will have no significant impact on Commonwealth expenditure.

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

Debate (on motion by Ms Macklin) adjourned.