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Wednesday, 16 June 2004
Page: 23887

Senator CHERRY (12:37 PM) —I really have to disagree with the minister. I am acutely aware of the High Court decision in Smith and ANL about retrospectivity and closing down defined benefit schemes for employees. But the department of finance officials appearing before the committee inquiring into this bill made it abundantly clear that there is a very low risk of constitutional issues in respect of retrospectivity in this area. I quizzed them about it and they made it quite clear that a politician does not have a contract of employment with the Commonwealth. It is neither a contractual issue nor an employment issue; it is a statutory entitlement issue. Section 51(xxxi) does not apply. People keep talking about retrospectivity. From my point of view, I want to ensure that the issue of retrospectivity is put out of this debate because we are talking about future service. The Democrats acknowledge that we should not take away entitlements that current MPs have accrued, and the amendments we will move, which are somewhat more extensive than those that Senator Brown has moved, seek in some detail to ensure that the entitlements of all existing MPs are frozen as at the date of the next election.

We want to ensure that new service is on a new basis. Senator Minchin referred to the fact that new candidates applying to stand in the next election should know the basis on which superannuation applies. I will be a candidate at the next election and I will know that, if I am successful, I will have a different superannuation arrangement from whoever might be the third National Party person from Queensland standing for the Senate. If a person stands at the next election they will know, if we pass the legislation as it is proposed to be amended by the Democrats today, that that is the basis on which they will be standing for election. If they do not like the package they do not have to stand for election. When we are talking about future service, the whole notion of retrospectivity does not apply—because you are talking about future service. You are talking about prospective operation. You are not talking about a change to employment entitlements—because we are not talking about employment entitlements; we are talking about a statutory entitlement. That statutory entitlement flows from the fact that we are members of parliament and have been elected. If we are not elected we do not have the statutory entitlement.

There is no notion here of a retrospective application of this law or a retrospective application of this particular change in terms of future application. We are trying to make sure that all people stand at the next election on the same basis. That is basically and fundamentally Australian, in my view. If they do not like the package being offered by the parliament today, they do not have to stand. The Democrats are saying—and we certainly hope that we get some sympathy from both sides—that it is absolutely outrageous that the current 226 MPs will line up to quarantine themselves from these changes which the Senate superannuation committee in 1997 unanimously said were overgenerous. It is particularly outrageous that Senator Sherry in his contribution on behalf of the opposition and Senator Minchin in his contribution on behalf of the government have put furphies into the debate and claimed a retrospectivity that is not there. They have raised legal issues which do not exist. They have sought to put a correlation between the public sector scheme and the parliamentary scheme which is not relevant. We are talking about a scheme which quite clearly and definitively is different from the public sector scheme in every respect. We are not employees. We are MPs, and that makes for a very different situation altogether.