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Wednesday, 3 June 1987
Page: 3859


Mr BLUNT(10.55) —by leave-I move:

(6) Clause 8, page 6, lines 39 and 40, omit subclause (1), substitute the following subclause:

``(1) Standards applicable to the operation of approved deposit funds shall be such as are prescribed by this Act or any other Act.''.

(7) Clause 8, page 6, line 41, omit ``may'', substitute ``shall''.

This clause is a further example of this Government's intention to lay down by regulation the rules affecting people's retirement. The Government does not have the courage to bring into this Parliament a statement of its policy to be fully debated by both Houses and then incorporated in legislation. This clause contains a number of provisions and relates to approved deposit funds. Previously we took exception to this approach applying to superannuation funds. Approved deposit funds are used to provide a home for superannuation payments that are received prior to a worker's final retirement, and that involves substantial sums of money. Often a person will work for one employer for 10 or 15 years and then change jobs. He will go to another employer and join another superannuation scheme. For reasons of convenience, it is sometimes appropriate to take the superannuation lump sum payment-and under this Government there is a tax on superannuation lump sums-and put it into what is known as an approved deposit fund. As I said, that involves fairly substantial amounts of money accumulated over a period of working years.

This Government proposes by regulation to change the rules, standards and guidelines for those funds. Clause 8 (2) provides:

The standards that may be prescribed include, but are not limited to, standards relating to the following matters:

There are then listed eight very significant points, but the standards are not limited just to those points. The first point relates to the kinds of amounts which may be deposited with approved deposit funds, which is whether you can put in your money in the first place. How can you plan for your retirement if you are not sure whether you can take a superannuation payout and put it into an approved fund? The next points relate to the preservation of amounts deposited with approved deposit funds, the payment out of approved deposit funds of amounts deposited and the earnings on such amounts. There is nothing more crucial than the payment out of a fund. Once you put in your money you should be confident that you can get it out and you should have some confidence that you will get the interest on that money which has been deposited for some time. The Government is not prepared to tell us what rules will apply to that. The next point relates to the portability of amounts deposited with approved deposit funds and whether at some point you want to move from one fund manager to another fund manager or from one type of fund to another. Once again, we do not know what rules will apply. Fundamental to the safety of an investment is the kind of investments which will be approved for these funds and whether they can go into government bonds or some fly by night type of investment. No rules are specified.

The final points deal with the financial reports that will go to the people who own the money in these funds; the disclosure of information to depositors; and a number of other things related to trust deeds of approved deposit funds. As members on this side have said before, we believe that this is indicative of the Government's lack of competence in the superannuation area. The Government does not have a coherent retirement incomes policy. We have seen that in the Department of Social Security with its piecemeal approach to welfare and, in particular, aged pensions. We are seeing it again here. We have seen an example of it having to do something very quickly to try to contain, but keep on side, the Australian Council of Trade Unions. So we had a series of Press releases from the Treasurer (Mr Keating). In one Press release he said that there would be negotiation in the work place and that that was industrial reality.

As my colleague the honourable member for Mackellar (Mr Carlton) said, that is just an invitation to the unions to use their muscle on the building sites and in the work places. They will squeeze from individual employers, one by one, the concessions that they need for superannuation. It will give trade unions, which have a declining membership, another source of income that is tax free because they do not pay tax on income. Not only do they not pay tax on the subscriptions of their members, but they do not pay it on the additional income that they earn from the commission or administration charges for the superannuation arrangements.

If this Government were really competent, if it knew what it was doing, it would bring to the House legislation that laid down, chapter and verse, the rules for superannuation and approved deposit funds. We are talking about the future of the money that people are saving. They are giving up their current living standards to provide for their future living standards when they retire. Those whose money is at stake must know exactly the rules of the game in which they are about to engage. But that is not the case with this Government. It is: `Take us on trust', like so much of what it does. It is: `Trust us, trust me, and we will do the right thing by you'. After four years of that, the Australian people have had enough and on 11 July they will get rid of this Government. It is about time that we got down to firm policies and did away with reliance on trust and charisma.

That is why we have moved the amendments requiring this Government to legislate for the operating standards for approved deposit funds, and not simply to rely on regulations. It is just as important as the superannuation question, and it is more significant for many people because it affects their retirement planning. Halfway or more through their working lives, when they have accumulated a certain credit in superannuation, for a multitude of reasons they often change jobs. They do not want to retire, so they need a repository for those funds. Surely it is not too much to ask that they have confidence in and know the rules that will apply to the funds in which they are depositing those hard-earned, hard-saved dollars that will be so fundamental not only to their standards of living in retirement, but to the demands that they make on the public sector-the Australian taxpayers of the future-for a supplement for retirement income support.