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Wednesday, 4 November 1992
Page: 2592

Mr WILLIS (Minister for Finance) (5.36 p.m.) —I move:

  That the Bill be now read a second time.

This Bill amends the Superannuation Act 1922, the Superannuation Act 1976, the Superannuation Act 1990 and the Superannuation (Productivity Benefit) Act 1988. These Acts relate to the provision of superannuation benefits to civilian Commonwealth sector employees.

  The Bill covers a wide range of topics. The purposes of the amendments include compliance with the superannuation guarantee requirements, ongoing compliance with the occupational superannuation standards, streamlining of the administration of some of the Commonwealth's superannuation schemes and clarification of areas of the legislation. A major part of the Bill involves amendments to the Superannuation Act 1976 to comply with the superannuation guarantee requirements.

  The Parliament approved legislation for the superannuation guarantee earlier this year. To comply with the superannuation guarantee requirements, this Bill includes amendments to the 1976 Act scheme to ensure that: the minimum amount of employer benefit required under the superannuation guarantee is vested in each employee each year from 1 July 1992, and provide an additional benefit in two situations to meet that requirement; and an amount representing that minimum amount to be preserved until genuine retirement from the work force on or after age 55 or earlier death or invalidity.

  Generally speaking, the benefits under the 1976 Act scheme would more than meet the minimum employer benefit required by the superannuation guarantee legislation. Therefore, it is likely that the additional top-up benefit need be paid only in two circumstances, namely, death in service without dependants and resignation without preservation.

  The Bill also includes specific amendments to the 1976 Act scheme to continue the ongoing process of compliance with the occupational superannuation standards. Many of the occupational superannuation standards are provided for in regulations under the Occupational Superannuation Standards Act 1987. I draw honourable members' attention to the fact that the Bill provides that regulations may be made under the 1976 Act to satisfy conditions or requirements of the Occupational Superannuation Standards Act 1987 and regulations under that Act. This provision is essential to enable changes to be made to the 1976 Act scheme to keep up with changes in the standards.

  The proposed amendments also make provision for recognition of multiple memberships of the Commonwealth's superannuation schemes where a person holds more than one job. The era when a single full time job was the recognised pattern of employment has passed. Persons can hold a full time job plus a part time or casual job or more than one part time or casual job. The provisions in the superannuation schemes do not necessarily cater for such multiple jobs in a satisfactory way. For example, a permanent part time employee who is a member of the 1976 Act scheme cannot receive benefits in respect of a casual job that he or she might hold.

  The rules of the scheme established under the Superannuation Act 1990 can cater for some cases of multiple employment. However, the variety of employment patterns that is emerging means that the rules need to be examined to see whether they are equitable in all circumstances. The proposed amendments to the 1990 Act in this area will take effect from a future date to enable appropriate revision of the rules to be made where necessary.  The amendments in the Bill will provide for multiple memberships within the one scheme or membership of more than one scheme in appropriate circumstances. Given the variety of multiple employment patterns that now exist, flexibility to cater for situations where a person's benefits should, in fairness, be treated as one membership also is to be provided.

  Most of the remaining amendments in the Bill are technical in nature. Some amendments are desirable to provide for consistency of administration. For example, amendments to the 1990 Act will provide that benefits under that Act will be paid from Consolidated Revenue directly to the member as happens with the 1976 Act scheme and the Defence Force schemes, rather than have the payments going from Consolidated Revenue to the fund and then to the member.

  Other amendments clarify the legislation and remove unintended effects. For example, amendments to the 1976 Act scheme in the Bill clarify the intention that persons leaving the 1976 Act scheme because of the sale of a Commonwealth asset or the transfer of a Commonwealth function and who either continue to be employed or reject an offer of equivalent employment, do not have access to retrenchment benefits. Some of the amendments operate retrospectively. These would either benefit members, correct unintended effects of the current legislation, or are technical amendments required by changes to other legislation.

  I now turn to the financial impact of the Bill. Most of the proposed changes do not have any financial impact because they are technical amendments or clarifications of existing provisions. Where provisions could have a potential financial impact, the impact is likely to be small. For example, the two circumstances mentioned earlier where an additional benefit is needed under the superannuation guarantee are uncommon. Moreover, the amount of any additional benefit would be small because members would already be entitled to the 3 per cent productivity benefit.

  In summary, the potential financial impact of the changes in the Bill would be contingent on the happening of future events which cannot be predicted with any certainty. Therefore, the financial impact cannot be quantified. I commend the Bill to the House and I present the explanatory memorandum to this Bill.

  Debate (on motion by Mr Downer) adjourned.