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Notice given 26 June 2002

398  Senator O’Brien: To ask the Minister representing the Minister for Transport and Regional Services—

(1) Since January 2000, how many reports have been lodged with the Civil Aviation Safety Authority (CASA) relating to air contamination in BAE 146 aircraft operated by National Jet Systems.

(2) In each case: (a) when was the report lodged; (b) who lodged the report; and (c) what action was taken by CASA in response to each report.

404  Senator Brown: To ask the Minister for Forestry and Conservation—

(1) Who gave permission for logging on the steppes to Interlaken Road in Tasmania to include the roadside reserve in several places.

(2) In each case: (a) to whom did the reserve royalties go and who carried out the logging; (b) who carried out the environmental impact study and when; and (c) how was this logging deemed within the parameters of the Forest Practices Code.

405  Senator Sherry: To ask the Minister for Revenue and Assistant Treasurer—

(1) (a) How many applications for assistance under section 229 of the Superannuation Industry Supervision Act 1993 (the SIS Act) have been received by the Assistant Treasurer or her predecessor in relation to Commercial Nominees of Australia Limited (CNAL); and (b) when were these applications made.

(2) When did the Assistant Treasurer make a formal request (or requests) for advice from the Australian Prudential Regulation Authority (APRA), under section 230A of the SIS Act, in relation to these applications.

(3) How many funds did this request (or these requests) apply to.

(4) In this request (or these requests), did the Minister specify, under section 230A(1), any particular matters that APRA was (or is) to provide advice about or a particular time by which APRA was (or is) to provide the advice.

(5) When did APRA provide advice to the Assistant Treasurer pursuant to this request (or these requests).

(6) What was APRA’s advice under section 231(2) pursuant to this request (or these requests).

(7) In relation to the 181 funds for which the Assistant Treasurer has made a section 231 determination, as announced on 14 June 2002: (a) what is the total eligible loss; (b) what is the average eligible loss; and (c) does this eligible loss include rectification and/or administration costs charged by Oak Breeze as replacement trustee.

(8) In relation to the 181 funds for which the Assistant Treasurer has made a section 231 determination, as announced on 14 June 2002, what is the total assistance that will be paid under section 231.

(9) In the period from 14 June 2002 to the provision of answers to these questions, will the Assistant Treasurer make any further determinations under section 231; if so: (a) to how many funds do these determinations relate; (b) what is the total eligible loss; (c) what is the average eligible loss; (d) does this eligible loss include rectification and/or administration costs charged by the replacement trustee Oak Breeze; and (e) what is the total assistance that will be paid under section 231.

(10) (a) How many applications for assistance in relation to CNAL has the Assistant Treasurer received without making determinations under section 231; (b) when does the Minister expect to made determinations under section 231 in relation to these funds; and (c) what is the estimated total eligible loss for these funds.

(11) Has the Assistant Treasurer determined not to provide assistance under section 231 to any funds for which CNAL was trustee.

(12) Of the funds for which CNAL was trustee but the replacement trustee is yet to make an application, how many additional applications does the Assistant Treasurer expect to receive, and, of these, what does she expect the total eligible loss will be.

(13) What is the total amount of assistance under Part 23 that the Assistant Treasurer expects will be paid.

(14) (a) On how many occasions does the Assistant Treasurer expect to impose a levy under the Superannuation (Financial Assistance Funding) Levy Act 1993 ; (b) what will be the total amount of each of these levies; (c) what will be the applicable rate or rates for this levy or levies under section 8 of this Act; and (d) will this rate be different for different classes of fund.

(15) When does the Assistant Treasurer intend to impose this levy or levies.

(16) What steps did APRA take to ensure that rectification costs and administration fees charged by Oak Breeze, the replacement trustee of the 475 small funds for which CNAL was trustee, were kept to a minimum; in particular, what commitments in relation to costs did APRA seek from Oak Breeze before it was appointed as the replacement trustee.

(17) Does APRA believe Oak Breeze is satisfying its disclosure obligations under the SIS Act and/or the Corporations Act to members of the small funds; in particular: (a) what are (or were) the start and finish dates for Oak Breeze’s most recent reporting period and has Oak Breeze provided (or does it intend to provide) statements and annual reports to fund members within 6 months of the conclusion of that period; (b) did Oak Breeze provide details of how fees would be charged to fund members upon its appointment as trustee; (c) has Oak Breeze established a complaints procedure; (d) has Oak Breeze provided relevant and timely information to fund members when they have requested it to do so; and (e) if APRA is not satisfied that Oak Breeze has met its obligations, what enforcement action has it taken in relation to any or all of these issues.

(18) With reference to the answer to a question placed on notice during additional estimates, in which APRA said that it chose PricewaterhouseCoopers (PWC) (the parent of Oak Breeze) as the replacement trustee of the three larger CNAL funds after seeking expressions of interest from PWC as well as KPMG, Ferrier Hodgson and Sims Lockwood: (a) were expressions of interest sought from these same parties before APRA appointed Oak Breeze as replacement trustee of the small funds; and (b) did any of these parties, other than PWC, express an interest in the appointment; if so, were their costs, or likely costs, any different to those of Oak Breeze.

(19) What opportunity, if any, was there for other parties to express an interest in being appointed as replacement trustee of the small funds.

(20) Given that, in the answer referred to above, APRA said that it ‘adhered to its policy for the appointment of replacement trustees’ in appointing Oak Breeze: (a) in light of the significant fees charged by Oak Breeze and the difficulties it initially experienced in its administration functions, has APRA seen fit to revise its policy for the appointment of replacement trustees; and (b) has APRA, for example, considered the possibility of establishing a pool of appropriately resourced entities that would be ready to be appointed as replacement trustees, at minimal cost, in future cases.

(21) In its report into CNAL the Select Committee on Superannuation and Financial Services, noted with concern that neither APRA nor the Australian Securities and Investment Commission (ASIC) had regulatory control over the so-called Enhanced Cash Management Trust (ECMT), the vehicle responsible for the losses incurred by CNAL funds and neither APRA nor ASIC were able to quantify the number of investment vehicles, like ECMT, that fall outside the current regulatory framework. In response to a question on this matter that was placed on notice during additional estimates, APRA stated that it ‘does regulate these trusts’ and has ‘no records as to either their number or prevalence’: (a) does APRA believe it is a cause for concern that investment vehicles, like ECMT, that receive superannuation monies, are not regulated by either itself or by ASIC; (b) does APRA agree that it is important for a prudential regulator to understand the extent of problems or loopholes in the regulator regime in order that it might recommend legislative changes to address any such deficiencies; and (c) should APRA therefore be concerned that APRA does not know how many investment vehicles like ECMT fall outside its regulatory jurisdiction.

(22) (a) In light of the example of the TED Engineering superannuation fund raised during budget estimates, what regulatory sanctions are at APRA’s disposal for dealing with non-arms length transactions and other breaches of trust that occurred before the commencement of the SIS Act; (b) if another case were to emerge in which a fund had suffered a loss as a result of a non-arms’ length transaction or other breach of trust that occurred before the commencement of the SIS Act, how would APRA respond; and (c) how would this response differ if the trustee had breached the relevant provisions of the SIS Act following its commencement in 1994.

(23) If APRA were presented with similar circumstances, and found it was unable to take effective remedial action under commonwealth legislation, would it take action against the trustee in the appropriate common law jurisdiction.

(24) (a) What proportion of regulated superannuation funds does APRA believe are in breach of the equal representation rules contained in the SIS Act; and (b) what strategies does APRA have in place to ensure that the equal representation rules are adhered to.

(25) With reference to the draft report of 4 March 2002 of the Superannuation Working Group, which noted concerns about the grandfathering provisions that allow the in-house investment cap of 5 per cent (in section 82 and 83 of the SIS Act) to be exceeded: (a) can APRA provide an average proportion for in-house assets in superannuation funds; (b) can APRA provide any details of recent enforcement actions in respect of breaches of the in-house assets rule; (c) what is the maximum proportion of in-house assets that funds have held while still complying with the SIS Act; (d) does APRA believe that the grandfathering provisions in sections 71A to 71E need reform; and (e) does APRA believe that the 5 per cent cap in sections 82 and 83 is too high.

(26) Given that the working group does not deal with investments in derivatives by superannuation funds in its draft report: (a) should this be interpreted as a sign that APRA is unconcerned about derivatives trading by super funds; (b) what proportion of superannuation funds are involved in derivatives trading; (c) what is the average ‘derivative charge ratio’, that funds are required to calculate and report to members if it exceeds 5 per cent, for superannuation funds; and (d) can APRA provide details of any recent problems it has encountered, and any enforcement action it has undertaken, in respect of derivatives.