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Wednesday, 15 June 2011
Page: 6078


Mr STEPHEN JONES (Throsby) (11:13): It is with great sadness that I follow the member for Fadden in this important debate, because what he has visited upon all in this place is a litany of irrelevance and a demonstration of his absolute ignorance of the history of these schemes and how they operate. Let us go through, one by one, some of the gross misrepresentations and some of the examples of his absolute inability to comprehend or understand not only how public sector superannuation schemes have existed for over 50 years but how superannuation exists and is administered and how trustee arrangements operate. It is a great shame the member for Fadden is leaving the chamber at the moment, because he might actually learn something about the portfolio and about the issue that he proposes to expound upon.

Mr Robert: From you? Are you kidding me?

Mr STEPHEN JONES: Yes, you might actually learn something about this. The first thing is that if he really wanted to engage on this issue he might have turned up in 2009 when it was first raised. I know that the then minister for finance, the former member for Melbourne, started extensive consultations with all the stakeholders in 2009.

Mr Baldwin: That is rubbish. No he did not.

Mr STEPHEN JONES: I know this very well because I was one of the stakeholders involved in those consultations. I also engaged in discussions with members and representatives of the military schemes and others within the superannuation industry at that point.

But the member for Fadden turns up here a day late and a pound short in this debate and complains that for some reason he has not been listed to. Well, he has given us a very good reason today as to why he should not be listened to, and that is he has nothing to say of any relevance on the subject matter before the House. We heard him speak for almost 20 minutes on this important piece of legislation, but at no point did he grasp the fact that the whole reason this legislation is before the House is that it will bring a net benefit to those people he purports to represent, as a former serving member of the Australian Defence Force, in his shadow portfolio responsibilities in this place. This legislation will provide a net benefit to the members of the current military superannuation schemes. It will do that because they are currently members of a scheme which has around $3 billion in funds under management. In the modern world of superannuation, unless you have scale you are certainly not going to be involved in the deals and the advantages and get the sorts of investment returns that provide the benefits to members. That is the purpose of our superannuation scheme.

In the litany of 20 minutes of irrelevance from the member for Fadden we did not hear one word uttered about the benefits that this legislation is going to provide to the members of the civilian and current military schemes. The reason we never heard one word on it is that he simply does not understand it. He does not understand the whole purpose for which we have employee representation on superannuation schemes—public sector and private schemes at large. This is obvious when he complains about the fact that employee representatives on the fund cannot be sacked by their boss. If that is the proposition he seriously thinks is the way that superannuation funds should be managed in this country he should get up and say it. He should get up and say that he believes employers should have the right to appoint and sack the trustee representatives on superannuation funds, because that is what he is saying. He is saying that he takes some issue about the fact that under this legislation the boss of the employees cannot sack the employee trustees on this important superannuation vehicle, which has around $21 billion of employee funds under management.

He seems to labour under the misapprehension that the money under management in these funds is somehow government money. It certainly is not. The money has been contributed by the civilian and military members of these funds. So it is only fair and reasonable, and it has been a principle in this place and throughout this country since before industry superannuation was established, that the members of funds should have some say and some control, consistent with their fiduciary obligations and equity law, over the management of those funds. But the member for Fadden seems to think that it is unreasonable for members of funds to have some representative rights on the management boards of their funds. He thinks it should only be the employer who has the right to dictate who controls the funds. I am sure he is out of step. He would be a very brave man to put that as a serious proposition to any public sector employee or any employee in private enterprise. He is way out of touch. He simply does not know the subject matter on which he speaks.

He has no understanding of the history of employee representation on public sector funds. He would have served himself well and saved himself an enormous amount of embarrassment if he had taken the time to sit down with Senator Nick Minchin. If he had spent 15 minutes talking to him he would have understood that those parts of the legislation he objects to so strongly—that is, the provisions that allow the ACTU, in consultation with employee representatives within the public sector, to nominate to the minister representatives for these funds—are doing nothing more than reflecting the practice that was agreed with Senator Minchin when the public sector superannuation funds were radically overhauled by the former Howard government in 2004. In fact, this legislation codifies the agreement reached with Senator Minchin. So instead of coming in here, flapping his arms around and visiting upon us a litany of irrelevance and ignorance, he would have been better off spending a few minutes with the South Australian senator and asking, 'Nick, what is the history to all of this, mate? How have we got to this position?' The senator for South Australia, unlike the member for Fadden, does have a good understanding of the history of this fund and public superannuation and could have enlightened him. The member for Fadden would have been relieved of the historical embarrassment of having his words recorded for all time in Hansardabout how little he knows about public sector superannuation and about how little he knows about the benefits that are going to flow to the military personnel who have their money invested in military superannuation funds and in whose hands the future governance of that fund will be improved by this legislation.

Let us have a look at these funds and at what the legislation attempts to do. What the legislation attempts to do is bring under one roof the trustee arrangements for the superannuation schemes which are currently in place for both the civilian and the military superannuation arrangements. The first of these bills, the Governance of Australian Government Superannuation Schemes Bill 2011, will consolidate the trusteeship of the civilian and the military superannuation schemes. The effect of the bill will be to merge the Australian Reward Investment Alliance, otherwise known as ARIA, the Military Superannuation and Benefits Board and the Defence Force Retirement and Death Benefits Authority to form a consolidated trustee body. It does not consolidate the funds themselves but merely the trustee and governance arrangements.

CSC, as the Commonwealth Super­annuation Corporation will be known, will also assume responsibility for two closed civilian superannuation schemes from the Commissioner for Superannuation and the Defence Force Superannuation Productivity Benefits Scheme. CSC will be a Commonwealth authority for the purposes of the Commonwealth Authorities and Companies Act and will be governed by a board. The CSC will be established by renaming the existing legal body known as ARIA and the bill will provide that CSC will have an 11-member governing board, which will comprise a chair, five member directors and five employer directors. The size of the board is a reflection of the diversity of the membership of the schemes. This is a point which has clearly been lost upon the member for Fadden, who seems not to understand that, when you bring two schemes together—one which involves funds under management of around $3 billion, the military scheme, and another which involves funds under management of around $18 billion—there are going to be concerns amongst the membership of both funds and the existing trustees of both funds. Those quite legitimate concerns have to be accommodated and dealt with, and they have been by this legislation.

Both military and civilian interests will have employee representation, with the Chief of the Defence Force responsible for nominating two member directors and the President of the ACTU nominating three member directors and the ministers for finance and defence nominating the five employer directors. It is important to note—and herein lies the complete lunacy and hypocrisy of the contribution by the member for Fadden in this debate—that he took great umbrage at the fact that the President of the ACTU, in consultation with employee representative bodies for public sector superannuation, will advise the minister on the appointment of the employee representation. Not one word of objection was raised about the fact that the head of the Defence Force will nominate equivalent employee representatives on the military side of the funds. You would have thought a man who is so concerned about equity, fair play and balance in representation might have said, 'Maybe there is a representative body in the case of the serving military men and women who have funds invested in the current military funds who might be an appropriate equivalent to the President of the ACTU to consult with.' But not a word was uttered on that particular issue, which just goes to show that he does not understand the subject matter that he gets up to talk about this place.

What goes as debate is nothing more than bigotry and blindness about the fact that in this country, unlike many others around the world, we have a system which enables employees to have some control over their retirement savings. They have some control over the fact that, when they are investing hundreds of thousands of dollars in many instances in their retirement savings, they are entitled to have some representative people with expertise who have a say in how those funds are managed and the governance of those funds.

I would like to take this opportunity to pay tribute to one of those employee representatives. Margaret Gillespie has recently retired as an employee trustee of the ARIA fund—the body governing a number of the public sector funds. I worked closely with Margaret Gillespie when she was an Assistant National Secretary of the CPSU and I was the National Secretary. It is not well known that public servants who are members of the PSSap and other accumulation schemes now regularly receive an employer contribution of 15.4 per cent into their superannuation funds. They owe enormous gratitude to Margaret Gillespie for the intensive work that she undertook in negotiating with the former minister for finance, Senator Nick Minchin. As I have mentioned before, in 2004 the former Howard government closed the PSS and CSS schemes and moved all new employees off a defined benefit scheme. It is largely due to the enormous advocacy work of Margaret Gillespie and, I have to say, the fact that Senator Minchin did actually understand his brief and did get the importance of public sector superannuation—unlike many of those who have spoken in this debate on the other side of the chamber, he actually understood what he was talking about and was able to reach agreement with the employee representations—that public servants curr­ently enjoy an employer contribution of 15.4 per cent to their superannuation funds. It is equivalent to what we receive in this place. So I take this opportunity to pay enormous tribute to the work of Margaret Gillespie. She resigned from her position a few weeks ago as the trustee of the fund. She is one of literally hundreds of working men and women who give up their time and effort to represent employee interests in funds, and we ought to pay tribute to them. (Time expired)