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Wednesday, 4 November 1992
Page: 2515


Mr LAVARCH (10.04 a.m.) —The Commonwealth Superannuation Schemes Amendment Bill, as outlined by the previous speaker, the honourable member for Curtin (Mr Rocher), amends the range of Commonwealth Acts which govern the payment of superannuation to Commonwealth employees and their families. The reason for the amendments is to bring these various Commonwealth super schemes into line with the provisions of the Sex Discrimination Act. The Bill is one step in a very long process to have superannuation schemes in Australia, both public and private, operate fairly for both men and women.

  To understand the context of this Bill, I think it is necessary to look, briefly at least, at the history of the exemption enjoyed by superannuation schemes under the Sex Discrimination Act. In 1983, when the then Attorney-General, Senator Evans, tabled the Sex Discrimination Bill in the Senate for public consultation, superannuation schemes in the original Bill were to be exempt from the operation of the Sex Discrimination Act for two years, which was to allow time for schemes to adjust their arrangements to make them comply with the Act.

  In response to that Bill, the superannuation and life insurance industries argued that they would have a great deal of difficulty complying with the provisions of the Sex Discrimination Act. As a result of their representations, this two-year exemption contained in the original Bill was replaced with a blanket exemption which simply meant that the Sex Discrimination Act did not apply to superannuation schemes or to life insurance policies. However, although the Government at that stage accepted the blanket exemption, it did so with the proviso that an inquiry would be undertaken to investigate in more detail the concerns raised by the superannuation industry. It was always the intention that the Sex Discrimination Act would in due course apply to superannuation schemes.

  The inquiry which the Attorney announced at that time was conducted by the then Human Rights Commission and was not presented to Parliament until November 1986. It was a fair time before this inquiry got under way, and it was a long inquiry. The report of the Human Rights Commission recommended that the blanket exemption which was then within the Sex Discrimination Act as it was passed in 1984 be replaced and that all super schemes comply with the anti-discriminatory provisions of the Sex Discrimination Act. The National Agenda for Women, which was released in 1988, also canvassed at some depth the issue of superannuation and women. The agenda stated:

The security and independence of older women can be enhanced by the removal of discrimination in occupational superannuation.

The national agenda contains an action plan which outlines what the Government would do over the life of the agenda—that is, the five years from 1988 to 1993. In the agenda, the Government committed itself to proceeding with legislation to remove the total exemption in the Sex Discrimination Act and replace it with a more limited exemption which would have a two-year transition period. It was back to square one. The initial Bill presented in 1983 talked about a two-year transition period. The national agenda, coming out some five years later, in 1988, also talked about a more limited exemption having a two-year transition period. This is still a significant watering down of the initial intention of the first Sex Discrimination Bill.

  Finally, the intent of the national agenda, the Human Rights Commission report and the initial statements by the Attorney-General back in 1983 saw the light of day in May 1989, when amendments were proposed to the Sex Discrimination Act. However, that Bill in turn had a rather chequered history. Whilst it was presented to the House in May 1989, it was never debated and, with the dissolution of the Parliament for the March 1990 election, that Bill lapsed. The amendments were then incorporated into a second Bill which was introduced in September 1990. That Bill also did not proceed and was withdrawn in favour of a third Bill, which was finally passed by the Parliament and I believe received royal assent in June 1991.

  We are now debating the consequences of that Bill, and the final exemption in the Sex Discrimination Act concerning superannuation schemes, approaching 10 years after the initial Sex Discrimination Bill provided that all schemes should comply with the provisions of that Act. So it has taken a very long period to reach the mechanics Bill that we have in front of us to make sure that Commonwealth superannuation schemes comply with the provisions of the Sex Discrimination Act. Unfortunately, in my view, although the Bill before us today is to be welcomed, in essence it does not go far enough, because it is only complying with the Sex Discrimination Act, which means that superannuation schemes, both private and public, must not directly discriminate on the basis of sex and marital status.

  Most of the evidence which was received by the Standing Committee on Legal and Constitutional Affairs in its inquiry into equal opportunity and equal status for Australian women on the issue of superannuation indicated that the major problem with the operation of superannuation schemes for women was not direct discrimination but indirect discrimination. How that occurs is the fundamental difference between the career and work patterns of men and women. The work pattern of Australian women is mostly characterised by a process of interruption for the care of children. Normally, or in an average case if there is such a thing, a woman will enter the work force at a relatively young age, after school or after a period in further education. She will stay in the work force for a period of years, normally in part time work, but then she will leave the work force for a period of two to five years when the family is being raised. In fact, between the ages of 25 and 29, Australian women are five times more likely than Australian men to leave the work force for a time. That is obviously the time when most women are having their families.

  After that absence from paid employment, women will often return to the paid work force, but commonly through the mechanism of part time work. It should be noted that women comprise well over 70 per cent of the part time work force in Australia. Over time, women may then finally resume full time paid employment. That, of course, contrasts most starkly with the career pattern of Australian men, which normally is not interrupted at all by men taking out time from the work force to be involved in direct parenting responsibilities.

  What does that mean in terms of the operation of superannuation schemes and women? Until recently at least, until the most recent reforms to superannuation introduced by the Government, it meant that first of all women had a very poor coverage by superannuation, more so than the overall work force. Women were generally in occupations which did not enjoy superannuation coverage. It must be remembered that Australia has the most gender segregated work force in the Western world. Women are clustered in a narrow range of occupations and, generally speaking, those occupations had not until very recently enjoyed superannuation coverage.

  Honourable members will also recall that women comprise well over 70 per cent of the part time work force, and even today many part time workers do not enjoy superannuation coverage. That is starting to change. It is starting to change quite dramatically. The national wage decision back in 1987 to extend the 3 per cent productivity superannuation award was the first big leap, I suppose, in broadening out superannuation and its coverage throughout the Australian work force, and the range of initiatives the Government has made to change superannuation schemes has made them far more applicable to the part time work force and to workers with broken career patterns. So a lot of the work which the Government has done means that superannuation schemes are now going to be enjoyed by far more women workers.

  A further pattern of schemes which until very recently discriminated very much against women, not so much directly but indirectly, was the way in which vesting and preservation provisions worked. Again, these provisions were more or less based on a model of a worker who was in full time uninterrupted work, so that if he left employment after a period often the vesting provisions were very discriminatory. Normally workers were able to get back only their own contributions; they were losing their employer contributions. It was difficult to preserve contributions into schemes. Again, the Government has moved to change that and the situation has significantly improved from what it was just a few years ago, but as the schemes have operated in Australia they have been very much against the interests of Australian women.

  Finally, due to the nature of the interrupted career pattern of women and the fact that they may not rejoin the full time paid work force until relatively later in life, say, at age 35 or 40, the time they have had to accumulate benefits to be paid out at the time of retirement means that their level of accumulated benefit is on the whole much less than that enjoyed by an equivalent male worker.

  All those difficulties which I have outlined in the operation of superannuation schemes are not at this moment canvassed by the Sex Discrimination Act. They are all in their operation indirect provisions and not direct provisions, which the legislation before us is attempting to make Commonwealth schemes comply with, and which the legislation in the Sex Discrimination Act also now makes private schemes comply with.

  So what should the Government be turning its mind to? I encourage the Government to look closely at the discussion on these issues contained in the Half Way to Equal report and in particular the recommendation on the operation of superannuation schemes, which is recommendation No. 21 of the report. I will just go through those briefly.

  The Committee recommended that any superannuation policy reforms, including that of Commonwealth schemes, should encompass the following specific matters: firstly, the establishment of vesting, preservation and portability provisions that take into account women's broken work patterns in all schemes—and that is fundamental; secondly, superannuation schemes permit parents to retain membership rights during maternity and parental leave, with contributions frozen whilst on leave; thirdly, the promotion of the use of flexible and nil employee contribution rates so that women moving between full time, part time and unpaid work can maintain membership of a superannuation fund with contributions tailored to their current economic circumstances; fourthly, the qualifying period for the coverage by employer-sponsored superannuation to be reduced to that required by the superannuation guarantee levy, all employer contributions vest immediately and be fully preserved, and measures for improved portability between funds as suggested in the report to be investigated by the Insurance and Superannuation Commission; and, finally, far more emphasis on the education of young workers as to the importance of superannuation and where their contributions are taking them, so that people plan in advance and take due regard of the circumstances.

  While the Bill before the House is to be very much welcomed, as I have said, it is in a sense a mechanical set of provisions which are nonetheless important, particularly in relation to the payments for de facto spouses and ex-nuptial children, an area of quite overt discrimination in the way in which Commonwealth schemes in the past have operated. That overt discrimination is being removed. However, the Sex Discrimination Act requires neither Commonwealth schemes nor private schemes to make sure that they do not indirectly discriminate.

  The Government, to its credit, has largely taken up these issues through its reform of superannuation, and the end result is a vastly superior superannuation environment for women workers than existed even two or three years ago. That is how recent these changes are. Nonetheless, I think a useful step would be not only to require Commonwealth and private schemes not to discriminate directly but also to ensure that the indirect discrimination provisions within the Sex Discrimination Act are also applied to superannuation schemes. As far as the Bill goes, it certainly has my full support.