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Tuesday, 19 November 2002
Page: 6730

Senator SHERRY (3:17 PM) —I move:

That the Senate take note of the answer given by the Special Minister of State (Senator Abetz) to a question without notice asked by Senator Sherry today relating to superannuation and small business.

Significant red tape, legal liability and draconian fines are to be imposed on business, but particularly small business, from the government's so-called superannuation choice legislation. Senator Hill was right about one thing: the chamber is about answering questions, and Senator Abetz could not answer the questions posed by me today in the Senate chamber in question time or the questions posed unanimously by Senator Abetz's own colleagues on the Senate Select Committee on Superannuation. I will be interested to hear contributions from Senator Watson, the chair of the committee, and Senator Chapman and Senator Lightfoot, who are members of the committee. The Senate committee unanimously reached the conclusion that the proposed changes and their draconian impact on small business had very serious consequences and recommended some change; hence, my questions to Senator Abetz today.

The so-called superannuation choice legislation, which we are to consider shortly, involves the deregulation of retail superannuation in Australia.

Senator McGauran —Yes?

Senator SHERRY —Just listen, Senator McGauran, and you will actually learn something. This is a unanimous committee report. Under the proposed legislation, 654,000 employers will be required to enter into 35 new steps of red tape with their employees in respect of payment of superannuation. Let me describe it very briefly. The new requirement is that over 600,000 employers will be required to put in writing to each and every existing employee or future employee a request about their superannuation fund. The employer will be required to record the date of that request and the date of the written response back from the employee. They will then have to determine whether the fund to which the moneys are to be paid is a complying superannuation fund.

Senator McGauran —That all makes sense.

Senator SHERRY —I have not finished yet, Senator McGauran. They will then have to determine whether the money should be paid to a default fund—and it goes on and on. There are 35 new steps the employer has to take to meet these particular new superannuation provisions. If the employer gets it wrong once—

Senator McGauran —Whose side are you on?

Senator SHERRY —I do beg to ask: whose side is the Liberal Party on? This is new red tape being imposed on over 600,000 employers. If the employer gets it wrong once in those 35 steps, there is an absolute liability breach fine provision of $13,200 per employee. You are going to hear a lot more about this from small business, I can tell you that, Senator McGauran. For each one of these steps the employer gets wrong there is a fine of $13,200 per employee. Hence I asked Senator Abetz what he is doing—what is the minister for small business doing— about a small business that might inadvertently make a mistake. If the business has 20 employees, it could face a penalty hit of $264,000.

What was the response of the Senate committee on this matter? Unanimously, Senator Watson, Senator Chapman and Senator Lightfoot agreed that this was draconian and that it should not proceed. The committee unanimously identified this as an absolute overkill in respect of fines for employers. There are two other problems. If the employer engages in any form of advice, they open themselves up to common law legal liabilities. The third major problem is the administration cost. Many small business employers—obviously the government is not aware of this—pay by cheque. For 20 employees you pay 20 different cheques to 20 different funds. That is adding to additional compliance costs and red tape. Senator McGauran waves his hand as if it is nothing for small business to have to face these new horrors, this new red tape. In fact, the Queensland Retailers Association, ask Senator Boswell, describe this—(Time expired)