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Wednesday, 1 June 2005
Page: 21

Mr BURKE (10:26 AM) —The Minister for Revenue and Assistant Treasurer referred during this debate on the Superannuation Legislation Amendment (Choice of Superannuation Funds) Bill 2005 to the situation where he thought prison terms were a fair go and ought to apply. If these amendments are carried, the exact scenario referred to by the Minister for Revenue and Assistant Treasurer would still apply. The employer who acts to its pecuniary interest is not carved out of jail terms by our amendments. The employer who is pushing a super fund onto employees is not carved out by our amendments. These amendments before the House are simply so that a request for advice can come from the employee and the employer can give advice with no pecuniary interest. In that scenario it is outrageous to say a possible prison sentence and a maximum $22,000 fine should be on the table at all. That is the precise wording of the amendment. All that is carved out from this is the question that we know will be asked.

The minister used the line ‘Oh, look, do people go to their boss? Do they ask the butcher about their mortgage?’ Yes, they do. Employees regularly ask their employer for financial advice. Interestingly, on the precise example given by the Minister for Revenue, if the advice they asked for was about a purchase of property and the employer had a financial interest in it—a pecuniary interest that they did not disclose—and they gave advice, it would be completely legal. Jail terms do not apply to that. But, if the employer says, ‘I reckon this is the best fund of the ones that you are looking at there,’ the Corporations Act is activated.

This is the great disappointment. I could only be impressed with the spin but, as a fair dinkum argument, to argue that there is nothing in the super choice legislation that carries jail penalties is about as dodgy as this debate could be. Of course it is not in the super choice legislation; it is in the Corporations Act. When we had the system where the employer simply put forward a default fund and that was the end of the matter, the only time there would be the choice to have a different fund would be at the instigation of the employee—and some small businesses would do it voluntarily—not because material had been given to them by the boss or they had been told it was time to make a choice. When there were simply default funds, the employer was not going to be asked the question. In the present situation, we know that the employer will be asked, ‘What do you reckon I ought to do?’ If the employer answers that question to their own pecuniary interest, I agree that serious penalties ought to prevail. If the employer pushes an opinion onto employees without them even requesting it, I agree that serious penalties should be there.

But the scenario of this amendment is that the advice is given at the request of the employee and with no pecuniary benefit to the employer. When that is the situation I want to hear from the minister why, in the scenario that the amendment refers to and not in the scenario we agree on, a criminal penalty should be on the table at all. If we all agree that it should not be there, then why do we say that we will just leave it to the courts and let them sort it out? It should not be hanging over the head of the employer at all when it is at the request of the employee and there is no pecuniary interest in the answer given by the employer. I want to hear from the Minister for Revenue, when he pops up a little bit later, why in that scenario those penalties ought to prevail. I am quite happy to lose traction on this issue if the government just fix it. I am surprised this issue has survived as long as it has. When we first put out the media statement I said to Senator Nick Sherry, ‘I suppose this will have a run for about a week and then it will all be over.’ I am amazed that the only issue standing between a very reasonable policy position and a draconian alternative appears to be the pride of the minister opposite. Maybe just swallow that pride, Minister, and decide that it is not too big a call to say that when someone acts fairly on a question that we know they are going to be asked criminal penalties should not prevail. Do not force your backbench to come in and vote otherwise.