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Wednesday, 18 March 1987
Page: 910

Senator SHORT(5.35) —I move:

That the Senate take note of the papers.

These papers comprise a letter dated 2 December 1986 from the Minister for Finance (Senator Walsh) to the Principal Member of the Superannuation Fund Investment Trust which is the trust that really invests the proceeds of the Commonwealth superannuation scheme. The second paper is a response to that letter from the Acting Principal Member of the Trust, Mr Searson, on 31 December 1986. The Minister's letter of 2 December drew to the attention of the Superannuation Fund Investment Trust the Government's policy in relation to South Africa. It states:

. . . the Government has placed a ban on all Government procurement from South Africa and prohibited placement, by departments and authorities, of Government contracts with majority-owned South African companies. Procedures to give effect to this policy have been issued by the Department of Local Government and Administrative Services as amendments to the Commonwealth Purchasing Manual. I have directed that these procedures be formally adopted within my Department.

Pursuant to sub-section 29a (6) of the Superannuation Act 1976, I am writing to bring this policy to the Trust's attention and I would ask that the policy be considered by the Trust in the performance of its functions.

Section 29a (6) of the Superannuation Act reads:

If the Minister at any time furnishes to the principal member-

that is, of the Trust-

a statement of the policy of the Commonwealth Government on any matter that is relevant to the performance of the function of the Trust together with a request that the Trust consider that policy in the performance of its functions the Trust shall ensure that consideration is given to that policy.

The letter from the Acting Principal Member of the Trust back to the Minister, Senator Walsh, on 31 December, stated:

. . . consistent with the Government's policy, the Trust has agreed that it will avoid, as far as practicable, any direct dealings with South Africa or majority-owned South African companies.

. . . .

I might also mention that the Trust has made the general comment in its 1985-86 Annual Report that it adheres to Government announced policies on issues such as South Africa.

I think it is worth drawing the attention of the Senate to the fact that the Superannuation Fund Investment trust is not required to comply with the requests of the Minister other than the request that consideration be given to the Government's policy. The issue here is one of potential conflict between the actions of the Superannuation Fund Investment Trust in its basic responsibility to act in the overall interests of its members and, by doing that, to get the best return on their contributions as is possible-there is that basic obligation on the part of the Trust-and adhering to the Government's policy in relation to a ban on dealings with South Africa. This was an issue that was raised when amendments to the Superannuation Fund Investment Trust were being considered last year. Members on this side of the chamber made the point, particularly when the Trust was having its membership increased very strongly by trade union representation, as to whether the interests of the members, the contributors to this fund, would be adequately protected.

I express a note of caution and a note of concern in relation to the documents tabled today as to whether there is any suggestion that the Superannuation Fund Investment Trust may take investment decisions on behalf of its members which, because of a conflict with the Government's South African policy, may ensure less than the best returns that would otherwise be the case to members of the Fund. In the end that flows back to an additional cost to revenue. It is not entirely clear what the Trust's view is on that matter, but it is worth us, as a Senate, being aware of that situation.

Question resolved in the affirmative.