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Wednesday, 29 June 1994
Page: 2289

Senator HILL —My question is directed to the Leader of the Government in the Senate. I refer to the very disappointing statement by Mr Willis on superannuation as referred to in an article by Vince FitzGerald, the architect of last year's statement on a national savings policy, headed `Willis ducks hard issues of reform'. Mr FitzGerald says that whilst the Willis statement deals with certain housekeeping matters it `doesn't go to the heart of the major outstanding policy issues in superannuation'. I ask the minister: why has the government ignored the main recommendations of the FitzGerald report and what exactly is the government's national savings strategy?

Senator GARETH EVANS —It needs to be understood that the Treasurer's statement on superannuation policy concentrated on one specific problem, and that was the particular problem of small superannuation accounts. The government is very confident that the initiatives announced in that respect will increase the efficiency and equity of the superannuation system. Any suggestion that the government has in any way abandoned the national savings strategy or dumped the key recommendations of the FitzGerald report is nonsense.

  The truth of the matter is that the government has a very proud record so far as superannuation is concerned and we will continue to maintain it. We have massively increased the coverage of occupational super in the work force, especially for women. We have instituted responsible national superannuation arrangements under the guarantee system, which over time will unquestionably significantly increase national savings. We have reformed the vesting and preservation rules. We have introduced comprehensive prudential standards so as to improve the security of members' retirement incomes. We have reformed the taxation arrangements to ensure that greater equity will occur, with further changes commencing on 1 July this year. The government has also achieved an increase in the efficiency of industry by the introduction of competition through the award superannuation arrangements and the resulting development of industry superannuation funds.

  When all that is put together we have a record that is second to none. It is absolutely unmatched by anything that the opposition did when it last had the chance to be in government. As far as this particular crucial element in the savings equation is concerned, we are proud of our record and we stand by it.

Senator HILL —Mr President, I ask a supplementary question. This seems to be another example of the government failing to heed the advice of the messenger. Mr FitzGerald says that the effort of yesterday does not go to the heart of the major outstanding policy issues in superannuation. I would have thought that the government would have listened and acted rather than again saying, `We have the most marvellous scheme and we are not interested in further improvement.' I go back to the matter of the small super accounts, which the minister said was supposed to be resolved, and I ask specifically: if the government is advocating greater competition and diversity in other sectors of the economy, why has it now enforced a virtual closed shop in the crucial area of compulsory national savings?

Senator GARETH EVANS —If it is a matter of listening to the FitzGerald report and acting upon it, I would like to ask the opposition what its attitude is to the particular recommendation of the FitzGerald report that sought the introduction of an inheritance tax. Are those opposite asking that we embrace that—an inheritance tax? Is that part of their repertoire? Is that their contribution to the reform of the taxation system? No, they are going to be selective about it—of course they are going to be selective about it—just as we were selective about the report.

  A number of specific strategies are laid out, many of them entirely sensible, many of them properly picked up, developed and implemented by us. A problem arose in the context of small superannuation accounts because of the difficulty of administration of those accounts. We have resolved that difficulty with the reforms that were announced the other day by Mr Willis and we again have a thoroughly workable system in place.