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Monday, 9 May 1994
Page: 430

Senator SHERRY (Parliamentary Secretary to the Minister for Primary Industries and Energy) (3.59 p.m.) —I can give a response to the two issues that Senator Kernot and Senator Watson raised. I understand, on the receipt of this response, the Democrats will not be proceeding with their amendment.

  I apologise to Senator Chapman. I asked the Treasurer's office to contact Senator Chapman. Unfortunately because of the budget process, tomorrow being budget day, they have not been able to contact Senator Chapman about the matter.

Senator Kernot —Surely the budget is printed.

Senator SHERRY —It is still a busy day. I will read out the response. I did ask the Treasurer's office to contact Senator Chapman, and apologise if officers have not done so. They did contact Senator Kernot, who raised the issue and circulated the amendment; they spoke to her this morning about this matter.

  Last week when this bill was first debated the Leader of the Australian Democrats asked for clarification as to the South Australian government's understanding of the tax treatment of the accrued superannuation liabilities at the time that it agreed to the $647 million compensation arrangement, and for assurance about the protection of the existing employees' superannuation benefits.

  At the time the $647 million tax compensation and financial assistance package was negotiated, the South Australian government clearly understood that it would be required to place the bank in the Commonwealth tax net on 1 July 1994 and that all tax losses would be extinguished. The South Australian government had no expectation of receiving further concessions in respect of superannuation liabilities incurred by the State Bank in the period when it was paying tax to the South Australian government and not to the Commonwealth.

  Clause 52 of this bill is completely consistent with the terms of that agreement. For its part the South Australian government was from the outset aware that the superannuation entitlements of existing employees would need to be managed carefully. On the one hand, it did not want potential buyers for the bank to be faced with the situation of completely open-ended liabilities which would jeopardise the price. On the other hand, there was a need to protect the interests of existing employees, particularly those in the South Australian government superannuation fund. The arrangements which the South Australian government has put in place for those employees' superannuation arrangements have been negotiated and agreed with the Finance Sector Union. I understand that the information I have just conveyed is the information that would have been conveyed to Senator Chapman by the Treasurer's office.