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Wednesday, 23 October 2002
Page: 5727


Senator SHERRY (3:01 PM) —I move:

That the Senate take note of the answer given by the Minister for Revenue and Assistant Treasurer (Senator Coonan) to a question without notice asked by Senator Sherry today relating to superannuation and the Australian Workforce Eligible Rollover Fund.

The Workforce Eligible Rollover Fund was a subcomponent of a superannuation trust known as Commercial Nominees. Unfortunately within the structure and the various substructures of Commercial Nominees a level of alleged theft and fraud has taken place. My colleagues Senator Buckland and Senator Wong will be commenting on some specific matters in relation to the issues of Commercial Nominees and compensation in the event of moneys being lost as a result of theft and fraud. They will comment on the compensation payable in those circumstances and also on compensation for fees and charges that apply in those circumstances.

Superannuation is very important to Australians. It is compulsory and it is set at a level of a nine per cent contribution for all employees in this country. I think the last documentation I looked at showed that 8.8 million Australians are in superannuation, with approximately $530 billion in assets. It is compulsory and it is there to be preserved for retirement. So superannuation has a very special status in this country and plays a very important role in providing an additional retirement income over and above the relatively modest pension that Australia has for persons who have reached retirement age.

Superannuation deserves special consideration with regard to the protection that it is afforded. We cannot have the situation in Australia that has occurred in some other countries, and the UK comes to mind. I draw a distinction between theft and fraud in a superannuation fund and low returns. At the present time, unfortunately, we are in a low-return and generally negative-return environment with respect to superannuation. That follows a significant number of years of positive and generally very favourable returns. We have to draw a distinction between what to do when theft and fraud occur— when the money is literally stolen from a worker's retirement fund—and the issue of lower returns.

The Labor Party argues that it is totally unacceptable in a society such as ours that, where a person's retirement income is in part or whole stolen before the person reaches retirement, there should not be adequate compensation for the moneys that have been removed from the fund illegally and also in respect of the fees and charges that are part and parcel of the administration of the fund in those circumstances. It is totally untenable and totally wrong for Australians not to be fully compensated in those circumstances. If the theft or fraud occurs close to retirement it is obviously impossible for those people to make up the losses that have occurred as a result of that theft and fraud.

In a policy options paper I released approximately two months ago, I advocated much tougher protections for Australians' superannuation in the event of theft or fraud taking place. Unfortunately, some in the media seem to be perpetuating a myth that the Labor Party has not put out any policy since the last election. This is incorrect and I urge them to read my 60-page superannuation policy options document. I think it is a very comprehensive document, and this is one of the issues that we focus on. The Labor Party has put forward the fundamental principle that where theft and fraud occurs in a superannuation retirement fund—fortunately, it is very rare in this country—full compensation, 100 per cent compensation, for both moneys lost and the costs of the fees and charges should be provided to persons in those circumstances because of the unique status of their savings as compulsory superannuation savings vested in the private sector. We have also outlined a range of very tough options for stronger protections on the fees and charges that apply to superannuation. (Time expired)