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Thursday, 31 May 1984
Page: 2202

Senator HARRADINE(10.24) —Just in case that does not apply, I will speak now on the report of the Senate Standing Committee on Finance and Government Operations. I do so having had the report for just a few minutes. My concern with the report is that it has not addressed the problems of the employees who are the ostensible beneficiaries of these schemes. Appendix A on page 18 of the report outlines the operation of these schemes. It indicates:

Funds are established ostensibly for the purpose of providing superannuation benefits for employees including the principal in the business. After taking advantage of the taxation concessions for contributions and the tax-free treatment of the income of the funds, the funds are wound up and the accumulated assets of the funds are paid out, not to the employees, but to the proprietors of the business concerned.

Generally, the employer includes a large group of employees in the fund, however steps are taken so that they will not qualify for a benefit. The report then lists a number of ways by which it is done. That is to say, they employ people who they know will not be in their employment at the time the benefits mature. Another method listed is termination of employees, employment under some pretence shortly before they would otherwise become entitled to substantial superannuation benefits from the fund. I am very concerned about that. If that is the case, the Committee should have examined in all possible ways how those beneficiaries could have received the benefit.

Senator Coates —By 31 May?

Senator HARRADINE —It has to be done. It is not suggested by anybody that the Commonwealth does not have the power. The Commonwealth, under its insurance power, has the power to make those considerations. I believe that the Committee should have examined this question or at least raised it. I certainly raised it initially. The Committee should have examined whether or how the Commonwealth's insurance power could be exercised so that the worker got first bite of the cherry.

Senator Coates —We had the Bill to refer to.

Senator HARRADINE —All right, there is the Bill. It allows the Australian Taxation Office to get its fangs into the money. As I have said here time and again, it gets its fangs into the money of workers too often. As I have also mentioned on a previous occasion in bankruptcy cases it gets its fangs into the workers' money. If there is a possibility for workers who had been diddled and whose employment had been terminated under some pretence shortly before they would otherwise become entitled to a substantial superannuation benefit from the fund to receive compensation, the Committee should have considered how the Commonwealth's insurance power could be used to ensure that justice is done.