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Wednesday, 13 June 1984
Page: 2897

Senator HARRADINE(11.06) —I thank the Minister for that explanation. That is the very point I was trying to get at. I make this point and I hope the Government will take it up with its advisers. For example, page 76 of the explanatory memorandum, which deals with this proposed new sub-section 27A (4), contains a sentence which is 98 words long. The way in which this explanatory memorandum has been drafted is most obtuse. I believe that those who were responsible for drafting this explanatory memorandum, containing one sentence of 98 words without drawing breath, should have another look at the way they draft such things. But it is the very point that the Minister has mentioned that concerns me. I refer to the situation of a widow immediately following the death of her husband, the superannuitant. She is phoned by the fund and asked: 'Would you like the payments to continue as they have been continuing?' That would probably involve the payment of $200 a week. The widow would say: 'Oh yes, fine' . The point that I have made is that within, say, three or four weeks of making that decision, she may realise that she has liabilities; that she has the mortgage to pay off and various other things. If she then says to the fund or the employer: 'I want to commute this to a lump sum', she will be taxed blind under this legislation. All I am asking the Government to do-it is acknowledged that this is the case-is to re-examine that and provide for some period of grace after the death of the superannuitant-for example, the period of grace available to a widow under the social security legislation. I hope the Government will bear that in mind.

I reiterate that there are features of this legislation that are important, as Senator Dame Margaret Guilfoyle has said. They are important in other general taxation areas not associated with the superannuation aspect. But so far as the superannuation aspect is concerned there are many unanswered questions and problems that have been raised. I will raise another couple. One was adverted to very briefly by Senator Dame Margaret Guilfoyle. I refer to the situation of fire fighters. I was secretary of the Federal Firefighters Union and I am aware of the superannuation funds which are designed to cover their special circumstances. As honourable senators know, fire fighting is an industry whose members live under the bells all the time. In many cases they want to get out and need to do so because of their health, at the age of 55, or something of that order. They may indeed need to get out beforehand. If they do, their superannuation fund is designed to provide them with a lump sum in order that their standard of living does not dramatically drop, bearing in mind, of course, that they cannot get the pension until they are 65 years of age. They will certainly have a problem under this legislation if they retire earlier than the prescribed age because their superannuation payments will attract the superannuation tax penalty.

Another aspect of this legislation which I believe the Government ought to amend is the roll-over provisions-the provisions which enable lump sums to be rolled over into annuities. Of course, one of the attractions of an annuity in a number of situations was that after it was paid out the money could be split between the husband and the wife. The provisions in this legislation will not only tax that money but also, if it is rolled over into an annuity, will trap the married couple into a single income throughout the rest of their lives. I do not think anybody else has raised this matter. I certainly have not heard it raised in this chamber. Yet this legislation traps a husband and wife into a single income for the rest of their lives and they are taxed accordingly. That is unfair and is inconsistent, in any event, with the Government's taxation attitude to the ordinary pension. As you would know, Mr Chairman, and as the Committee would understand, so far as the married couple is concerned, the pension is split; a pension is paid to the husband and a pension is paid to the wife. Under those circumstances, of course, the money is treated as a split income for the purposes of taxation.

Despite the rhetoric we hear from the so-called radical feminists in the Australian Labor Party, this legislation will trap the married couple for the rest of their lives into a single income situation. I wonder whether the Government has really thought that problem through to its conclusion. Perhaps it ought to reconsider the matter and ensure that the wife is able to have conferred upon her some direct entitlement, as was the case under the previous lump sum provisions.